Buying ERP is a common trend with small and medium businesses. However decision makers are often confused as to which ERP they should buy, what is the difference between SAP and ERP, should we build our own ERP, buy branded ERP or local ERP etc.
This topic has many dimensions and is difficult to answer for any particular industry. However you cannot go wrong if you follow these 6 Golden Steps during decision making:
1. Budgeting – ERP or a white elephant?
ERP can become a white elephant or extremely expensive if not budgeted properly. Budget should consider two components – One time buying cost such as hardware, license, implementation etc and another is recurring cost such as customisation, report development, additional licenses etc. One should consider these two costs and not just one time cost. This can help in deciding options such as on-premise server bases ERP vs cloud based ERP etc.
2. SAP vs other ERP
SAP is world’s no 1 ERP product. It is the most popular ERP among all top global and Indian companies with largest functionalities. But in spite of all good things, SAP is not for everyone. Explanation for this is too lengthy to write here. In short, it needs skilled human and financial resources to implement and maintain it. I would strongly recommend to take this decision with the help of SAP professionals.
3. Are branded ERP not for SMEs?
Are Branded low priced ERP available? – the answer is Yes. E.g. SAP has another ERP product SAP B1. This is much more cost effective and a useful SAP product specially designed for SMEs. Similarly Microsoft has an ERP called Navision specifically designed for SMEs.
4. Are Indian ERPs not good enough?
Are local good Indian ERPs available? – Yes. This is the area where one should be really careful. There are many ERPs available and most local ERP products are developed for niche markets such as Manufacturing, Real Estate, Infrastructure etc. Most important part is to check credibility of such ERPs from their existing clients on various parameters – coverage of functionality, tax compliance, post implementation support, customer base, customer testimonial, background of the company, etc. There are good Indian IT companies having ERP products for SMEs such as TCS, Ramco etc.
5. Confused with ERP features?
In recent years ERP has evolved into a feature rich product such as dashboard, workflow approval system, document management system etc. Hence compare all features while deciding ERP. Take help of neutral Subject matter experts who are not selling any ERP.
6. Let’s build our own ERP
Should we create our own ERP?
NO – avoid creating your own ERP if your core business is something else. Creating ERP is a very intense process and can divert your attention from core business. Instead buy time tested ERP and if necessary integrate it with products, such as Microsoft’s SharePoint, to make it really useful.
There is much more than these 6 Golden Steps before making the final choice of the perfect ERP system.
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