What is the best enterprise resource planning (ERP) software and why?
There is no single best ERP system. No single system or for that matter, ERP vendor, can scale to fit all of the needs of different companies competing in different industries, relying on completely different supply chains, pricing and business models.
Consider the facts:
- Between 20% and 35% of all ERP implementations fail, and up to 80% exceed time and budget estimates (1).
- Between 50% and 60% of ERP implementations are compromised from their original goals as companies find implementing the software and changing processes too difficult versus what was originally promised by their vendor (1).
- ERP project success requires a focus on people and process, as well as the software. Ignoring these aspects will cause your project to fail (1).
- Failure of an ERP implementation is defined as not achieving the business goals the systems were acquired and installed to do (1).
The best ERP system for a given business steers clears of these failure points by being precisely aligned to unique business strategy needs. Selecting an ERP system needs to include extensive vetting or evaluation of vendors and what they really can do, not what they say they can.
Trust references in your industry over data sheets; believe the CIOs who bet their careers on a comparable ERP system you are looking at. Be wary of overpromising from vendors and hype.
The five reasons ERP systems fail are:
- Extensive modifications not mentioned or unknown by the vendor before the project began
- Lack of executive management commitment
- Insufficient or inadequate budgeting
- Inadequate change management and training
- Inexperienced project management and project team
The best ERP systems have these attributes:
- Solid, proven expertise in your industry with customer references you can talk to and visit to see how the ERP system is contributing to their business.
- You should be able to find a CIO, Project Leader (VP level typically) who bet theirs and their teams’ jobs on the implementation. You know an ERP system is perfect for your needs when you find a company who did bet jobs on the implementation and won with the system you are looking at.
- Deep expertise not only in your industry but also in the business processes you are looking to automate.
- Professional Services staff that has expertise on rapid deployments and can meet project deadlines.
- Strong change management expertise.
- Expertise with systems integration and the ability to map or value stream map your processes to show how automating them will lead to greater performance and profitability gains.
- Willing to allow for pilots to test out the system and ensure it is functioning correctly in the key process areas of interest.
- Service Level Agreements (SLA) that are real and have commitments to you the customer first, over just protecting the vendor.
- Financial viability of the vendor is strong and they will be able to stay in business for a decade, as the majority of ERP systems are installed a minimum of seven years.
- High level of customer satisfaction in their customer base, and an active community.