How to choose the best ERP for your company

ERP Guide. ERP Management Software Guide

This complete 96-page ERP Guide is designed to meet the needs of Spanish SMEs, which until now have not had a rigorous didactic document that would provide them with an overall view of the process of selecting, buying and implementing ERP management software.

ERP Guide Contents.

1. Who should read this ERP guide?

2. What is an ERP? 
2.1. What is an ERP? 
2.2. What are the origins of the ERP?
2.3. Made-to-measure or packaged ERP?
2.4. General or sector-specific ERP? 
2.5. Functional areas of the ERP
2.6. Advantages and benefits of the ERP
2.7. When to implement an ERP
2.8. How much does it cost to implement an ERP?

3. ERP in Spain
 3.1 Who needs an ERP?
3.2. ERP penetration by sectors
3.3. ERP software available in Spain
3.4. Multinationals or national manufacturers?

4. How to choose the best ERP? 
4.1. Selection process
4.2. How to choose an ERP supplier
4.3. Criteria for selecting an ERP supplier

5. Keys to a successful ERP implementation
 5.1 Keys to a successful ERP implementation
 5.2 ERP implementation process
5.3. How long does it take to implement an ERP?
5.4. Maintenance and extension of the ERP
5.5. The ERP contract

6. Purchase or rental of an ERP? 
6.1. Software as a Service SaaS

7. The 12 golden rules of ERP
7.1 The 12 golden rules of ERP
7.2 Common misunderstandings about ERPs

ERP Guide. Management Software Guide. Objective

The ERP guide ‘How to choose the best ERP for your company’, which was prepared by the IT solutions firm Solmicro, is a useful manual for resolving the doubts and questions that may arise for any company when they are implementing business management software.

Currently, there is a wide range of ERP Management Software in the market, which complicates the decision for businesses when they deciding on the ERP management software that will best adapt to suit their characteristics and requirements. For this reason, the ERP Guide describes, in a total of eight chapters, what is an ERP, its features, functionalities, types, history, the different suppliers in the market today, and the phases to go through in order to select a program and a supplier and to carry out the implementation of this type of software. And all of this is done with the aim that the company obtains the advantages of an ERP.

In preparing this ERP Guide, Solmicro has used several reports, including the research study “The market for ERP among Spanish SMEs”, which was carried out with 500 SMEs in 2007, as well as the understanding gained by the firm from its 15 years of experience during which it has carried out 700 implementations of ERP management software, serving around 14,000 users.

The study carried out among SMEs, who are the main players in the Spanish business sector, reveals that 64% of SMEs have an ERP installed. Furthermore, the 30% of SMEs who do not yet have a system of this type are planning on installing one shortly. In the preparation of this guide we have also taken into account data and studies from the consulting firms Pricewaterhouse, Penteo and Deloitte & Touche, in which SMEs state their priorities when implementing ERP, as well as the benefits to their business and the cost savings that they have achieved with these applications.

[return]

ERP Guide. Management Software Guide. Find out about ERP and the ERPs available in Spain

After a brief introduction, in chapter 2 and 3 the ERP Guide takes the user in a light, informative way through the history of ERP, its origins, the different types available, functionalities, advantages and benefits and when it is necessary to implement it, to later focus on the Spanish market for this management software.

The ERP (Enterprise Resource Planning) programs are management software packages that help to control and improve all the business processes of a company by including all of its departments: finance, purchasing, sales, logistics, marketing, production, quality, human resources, etc. In this way, with just one tool it is possible to achieve an overall view of the business, which provides a better perspective for management and decision-making.

Origins and evolution of ERP. ERP began in the United States at the end of World War II and it was used for administering inventory at the front. Later, industry adopted these systems, which became increasingly sophisticated until, in the 1990s, they were consolidated as ERP, management software for all the business areas in a company. Although at first ERP was a tool that was only within reach of large companies, this ERP management software is now accessible to all types of businesses and it has become widely used among SMEs due to its versatility, the appearance of new suppliers, the integration of a greater number of functions and the possibility to access it over the Internet.

Custom or packaged ERP. When implementing ERP management software, companies must decide if they would prefer a custom implementation, which requires lengthy creation time and is very expensive, or a packaged ERP, which is already existing management software that includes all of the development tools for adapting it to each business, which means a cost saving as well as a saving in effort and implementation time.

In fact, according to the Solmicro study, 68% of small and medium enterprises (of between 10 and 250 employees) who have implemented an ERP chose already existing packages and only 32% chose a custom development.

Moreover, it is necessary to choose between a multinational, supplying management software designed for large companies that is difficult to adapt to the SME, or a local provider, whose programs are more adaptable to small and medium enterprises.

General or sector-specific ERP. Moreover, it is necessary to study whether it is more advantageous to use a general ERP, which is one that is developed to adapt to any type of company, or sector-specific management software, which is designed specifically for a particular sector by specialised consultants and programmers and will thus better adapt to the demands of this market.

Advantages. Decision-making is made easier, which enables a better response to clients, increases productivity, contributes to the ordered growth of the business, offers security in access to information and creates a significant saving of around 35% of human resources and inventory costs and around 20% of information technology costs.

Timing and budget. Every company must decide when is the right time to make this decision, but there is no doubt that it is best to start as soon as possible. Generally, the investment is divided into three parts: management software (making up 45% of the cost), consulting services, implementation and training (45%) and the technical infrastructure (10%), to which the cost of maintenance, updates, etc. must be added. A standard implementation could cost around 40,000 euros.

ERP in Spain. In our country, two thirds of SMEs now have ERP management software. The highest penetration rate of these systems is in SMEs with between 50 and 250 employees, with 69% of these firms using ERP. By sectors, the Industrial sector leads the ranking (83% of industrial SMEs with more than 50 employees use ERP), followed by Trade (78%) and the Food sector (75%). However, solutions suitable for all types of business are available.

ERP software available in Spain. In Spain there are more than 150 suppliers and the leading 14 account for only 51% of the market. For the most well-known firms among SMEs that already have ERP, the multinationals SAP, Microsoft and Oracle are the leaders. However, Spanish suppliers such as Solmicro, Aqua and RPS are gaining ground.

[return]

ERP Guide. Management Software Guide. Choose success

Once the different types of ERP and the Spanish market have been analysed, in chapter 4 the ERP Guide provides the client with guidelines to follow for the selection of Management Software of this type and in chapter 5 it covers the guidelines for its successful implementation. Then it proposes a new solution for SMEs: the rental of an ERP.

Selection process. The process of selecting an ERP has five stages: the creation of a selection committee in the company, the gathering of information, the evaluation of solutions, the study of proposals and estimates, and finally, the decision making.

Selecting a supplier. It is important to carefully select the supplier with whom we will be working because they will become an important ally for our business. To ensure a good choice, the ERP Guide has a checklist of criteria that our future supplier should meet, which includes questions about background, the service offered, the form of carrying out the implementation, and the guarantees of continuity and of functional improvements.

Choose an ERP. The features that companies most value in an ERP, according to the Solmicro study, in order of importance, are functionality, ease of implementation, modularity, ease of customisation, and compatibility with other applications and systems. A good ERP must be functionally complete, customisable, flexible, specialised, easy to use, and it must be capable of growing with your company, it must be evolving technologically, and it must be secure and reduce costs.

In addition to focusing on the functionality, we should also consider the technological possibilities that the Management Software offers us. It must be completely compatible with the most recently released operating systems and must be usable in different work environments, it must have multilayer technology and must be developed in a .NET environment. It is also important that the supplier provides us with the source code.

The keys to success. Once the product and the appropriate supplier have been chosen it is essential to have the involvement of the whole staff of the SME, to have a fully defined model of the necessary work and management processes, and to set clear, realistic and measurable objectives in order to be able to evaluate the results. These are the first steps to follow to ensure the success of the ERP implementation.

Implementation process.  The implementation phase includes the preparation of an analysis of the requirements and demands of the company, which will be later transferred to the supplier, who will set the timing and conditions of the implementation; the development, the timing of which will depend on the solution chosen and on the applications to adapt and finally, the implementation.

How much time is needed for this process is one of the most common questions that companies ask us. The answer depends, again, on the solution chosen. In the case of a packaged and sector-specific ERP, the implementation can be carried out in a short period. If a general solution has been chosen, it can take between 6 and 8 months to get the new system up and running. But if you have ordered a custom application, the process may even take some years. The implementation periods, as well as the maintenance and update service should be addressed and specified in detail with the supplier.

SaaS: the rental option. The guide (chapter 6) proposes a new alternative: Software as a Service, SaaS. This system enables SMEs to use business management software over the Internet, with a monthly rental fee that includes the licence, maintenance and updates. This is a very advantageous solution for SMEs, because it enables a simplified implementation and reduction in costs for the company.

[return]

ERP Guide. ERP Management Software Guide. The 12 golden rules of the ERP

To sum up, the ERP Guide reminds us of the twelve basic rules of ERP management software, in which companies are urged to professionalise their management, define their objectives, carefully select their supplier, implement a packaged ERP, have a plan for the future, involve the whole team, demand the source code of the software and consider the SaaS option.
Additionally this chapter sets the record straight on some misunderstandings about ERP, such as that it is expensive or complicated, that only large companies can have access to it, or that its implementation is long and costly procedure. 

If you would like the complete
96-page Guide, request it here: