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5 Main aspects to evaluate before implementing an ERP system for your Distribution company!

Platned

29/07/2021

To begin, it’s important to remember that most ERP software systems are designed and developed using industry standard practices in order to implement them faster with less customizations. Obviously, implementing a proper ERP system will bring in disciplined procedures to the company, but sometimes the standards are difficult to adopt across different industries.

However, selecting an ERP system should be done carefully with properly evaluating many factors while considering current business processes, workflows, employee work structure and so on. Lack of due diligence during the evaluation stage may lead to an inadequate ERP solution. This won’t just translate into a loss of precious resources, time, and costs, but also cause frustrations, restrictions in the company’s growth and operational capabilities for years to come.

Simply, you need to make sure that your long term investment on an ERP system pays off your investment and enable you to reach out to your long term and short term goals.

Here are 5 main areas that you need to evaluate before implementing an ERP system for your distribution company;

1. Productivity: You need to evaluate how far your chosen ERP system increase your overall productivity. Here are some evaluation criteria that you have to consider to identify if a particular system will contribute to increase productivity of your company.

  • Accessible anytime, anywhere and from any device.
  • Ability to work in any language or currency.
  • Easy to learn and adopt with less complex interface.
  • Automation of business processes with simplifying approval process and notifications.
  • Single database to store documents that is accessible by any key personnel.
  • Comprehensive reports.

2. Functionality: Another aspect that you need to evaluate in your ERP selection decision is functionality that it delivers. You can evaluate functionality with below criteria in a broad perspective.

  • Capability in handling multi-company, international companies, multi-site, multi-warehouse including consolidation, reconciliations etc.
  • Financial management capabilities.
  • Quote-to-cash capability.
  • Sales order and PO management Cost accounting capabilities functionalities.
  • Warehouse and inventory management related functionalities
  • Integrated BI with industry-specific analytics.
  • CRM.

3. Technology: from the technological capabilities aspect, it is vital to evaluate your ERP in terms of;

  • Availability of all functionalities on cloud platform.
  • Responsiveness across different devices and screens.
  • Ability to export data for reporting, transfers and backups.
  • Switch data hosting method.
  • Flexible and customizable.

4. Value – an ERP should add value to your company with;

  • Multiple deployment options.
  • Flexible licensing options.
  • Reduced cost of ownership.
  • Scalability.
  • Vendor charges.

5. Risk: a fully-fledged ERP need to have the capacity to minimize risks faced by your company.

  • Predicting monthly cost.
  • Quick deployment.
  • Utilizing resources of cloud hosting leaders.
  • Vendor’s industry knowledge and customer reference on previous projects on same or similar industry verticals.
  • backup & disaster recovery.
  • Security.
  • Simpler integration.

These evaluation criteria will guide you to choose the best ERP that well suits your distribution industry-specific requirements. So, do not hurry to conclude your decision in selecting an ERP system since it’s a long term investment which will directly impact your company performance.

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