Checklist - How to prepare for a new ERP system

Getting a new ERP system is a big and important investment. To make sure you get the right solution that fits your business and meets all your needs (both today and tomorrow), it's important to do your homework. That's why we've put together a checklist of the most important points to check off before you decide which solution to invest in. If you follow them, you should have a good basis that leads to a system that increases efficiency, reduces costs, boosts productivity and makes it easier and more fun to work. It always pays to think first.

Point 1 - Compile a list of requirements

There are many reasons why acquiring a new business system is a wise investment. Automating processes saves time and resources that can be used for better things, streamlining in areas such as warehousing, invoicing, transportation and production leads to cost reductions and quality improvements, analysis tools provide more reliable forecasts that lead to better decisions, smart solutions provide more satisfied customers, etc. The important thing is that you have a good understanding of your business and its unique needs. These are good things to keep in mind when compiling the requirements list.

• Review what business processes you have, and where the bottlenecks are among them. Where can you be most efficient?
• Is there a system already in place? If so, what is the problem with it? Which of your needs can it no longer solve?
• What are your key needs and business challenges? Not just today but what will you face in the future? This is important to keep in mind to find a solution that provides value in the long term.
• Compile your needs and requirements, and then prioritize them.

Point 2 - Set up a working group

Once the requirements list is finalized, the next step is to form a working group that acts as a purchasing team to contact and evaluate different suppliers. Keep this in mind when forming the team:

• Include representatives from all departments so that everyone's needs and views are included in the evaluation. It is important to include users in the selection, after all, they are the ones who will be working in the system.
• Appoint a project leader (for example yourself), a contact person to communicate with suppliers and preferably also a representative of the management so that the decisions your group takes have their support.
• Evaluate whether you need external consultancy services to make good decisions and if so, to what extent.

Point 3 - Compile a system specification

The first task of the working group is to gather information about the current state of your business and how the solution you choose will integrate with your existing systems. This is important for the supplier to be able to develop a solution that really fits your business. Things you should include are, for example

• What hardware and networks are available today.
• How many users will be working in the system and what are the possible needs to be able to scale up the solution in the future.
• Requirements for integration with your existing systems.
• Possible needs for mobile solutions (access to the system via portable devices) and compatibility with other devices such as scanners.
• What type of solution to choose; an installed solution where the supplier implements and you then take over the management, a hosted solution where the supplier also manages the operation after installation or a web-based cloud solution where the system and all data are in the cloud and the supplier manages all operations and updates.

Point 4 - Review the other supplier services

It's not just the system itself you should talk to suppliers about. To find the most suitable supplier, you also need to address things like:

• What training is needed after implementation? How extensive is it and what is included?
• What are the support and maintenance solutions? Are there support contracts and what are they?
• Can the provider offer proactive support in the form of knowledge banks, user forums etc?

Point 5 - Calculate ROI

Now it's time for you to calculate the costs and benefits of your new ERP system. Read our posts on how to calculate ROI, where we thoroughly go through how to get all the essential figures to be able to choose the right solution and get the best possible return.

So ho calculate the ROI of your new business system part 1: calculate the costs

How to calculate the ROI of your new business system part 2: calculating the return

But in short, it is important to think about things like:

• Carefully list all costs and benefits, even those that are not obvious. Also allow for changes during the process and unexpected costs.
• Calculate a timeframe for the return and then forecast the value of each system requirement within that timeframe.
• Calculate and assess the balance between cost and return. Feel free to ask the finance department for help to get an accurate and clear forecast.

Once the ROI calculation is complete, take it to management so that they can approve the budget for the project and you can move forward with selecting the supplier.

Item 6 - List and select suppliers

Now it's time to find the potential suppliers of your new system. Do as much groundwork as possible and read up on them. Go through the suppliers' websites, read their references and customer cases, download guides, white papers and the like. Also, visit communities and forums where users discuss different solutions and learn from their experiences. Look specifically for the solutions used in your particular industry.

Other steps in this process are:

• List potential suppliers based on how their solutions match your requirements and needs.
• Then create an RFP (Request For Proposal) so that the remaining suppliers can develop a suitable solution and offer. Read our post "How to create a request that gives you a completely red business system" where you will learn everything about how to write a good document that helps all parties to reach the best possible solution.
• Make a final list based on the answers you receive to the RFP.

Point 7 - Choose your supplier

So we have finally come to the final point, choosing which solution and supplier is the best for you. The decision you make should take into account three main things: the effectiveness of the ERP system, the economics of the investment and the relationship with the supplier. Here's how to go about finding the solution that really suits your needs.

• Call all the final suppliers so that they can demonstrate their products. Make sure that everyone involved in your business is present at each demonstration. Also ask for references from the suppliers.
• Review all the documentation and the quotes you have received. Take into account the priorities you set in the list of requirements and match them with the offers and responses you have received.
• Choose the solution that fits your requirements now and in the future, provides the most value and comes from a supplier that feels right.

Congratulations! Now all you have to do is agree on the terms of purchase and implementation of the solution, and you can take your business to new heights with the help of your new ERP system.