An Enterprise Resource Planning (ERP) system touches many different parts of the business such as R&D, Finance, Supply Chain, Sales & Marketing and HR so choosing the right one is very important. Most ERP solutions will cover 80% of what businesses need, but what about the unique requirements of each company? With so many ERP vendors on the market, how do you know which vendor will be the right fit for your organization? Sometimes, it is just knowing where to start. We have compiled 8 key questions we highly recommend you ask a potential ERP vendor right from the start to set you on the right path.
Is the user interface available in French? (Quebec specific)
This is very important because, as per Quebec law, employees can ask to be able to work with a French interface and employers have to honour that request (source). By asking this question first, you will avoid spending time on solutions that cannot support this compliance requirement. Having a system that is available in French will keep employees happy and abide by Quebec law.
What is the architecture of the software you are proposing?
1 – Pure SaaS, Hosted or On-premises?
Software as a Service (SaaS) is a way of licensing software that appeared in recent years as an alternative to the upfront purchase of licenses. It always implies a Cloud based solution as you do not have to implement any in-house systems to support SaaS implementations. All back-end infrastructure is managed by the vendor, and you interact with a web-based app. This option is good for organizations who desire a lower initial cost of acquisition but beware the fact that it may cost more in the long run due to recurring fees and that costs do not affect capital investments and operational budgets in the same way.
A hosted option means you rent storage and computing power in a data centre to run your chosen software solution and host most of your data instead of purchasing the required hardware. This is a good option if the solution chosen does not offer SaaS capabilities, but their software is still the one that best aligns with your needs. As with SaaS implementations, it is the lower upfront costs make it interesting for organizations that have minimal capital available to invest in their IT infrastructure but may cost more in the long-term. The on-premises solution is the most labour intensive because you will be responsible for setting up the entire infrastructure to support the software solution. Despite higher upfront costs, organizations will choose this to minimize long-term costs or because they have more control over the customization available in this type of situation. However, do not forget to evaluate the security requirements as you will be responsible for protecting your data from potential cyber-attacks.
2 – Multi-tenant or Single-tenant SaaS?
Multi-tenant solution are uniform solutions where everyone has the same equivalent user interface but separate user data. Think about Netflix: both you and your friend access the same application, but your viewing recommendations are different. This is a multi-tenant solution; every user interacts with the same application but has unique data. Single tenant SaaS solutions are customized for your company to perform exactly the way you want them to, but they come as a price since they cannot be reused and sold to another client. You will generally have more control over the upgrade schedule with a single tenant solution than with a multi-tenant one since you are the only ones using that instance.
3 – Several modules or a single platform?
You should ask this question for two reasons: licensing costs and integration costs. If the proposed solution is composed of several modules, ask the vendor to provide estimated integration costs for the project (if any, as the integrations may be “out of the box”). Also ask them if the modules can be “turned on or off” from a licensing perspective as you may not need to pay for it until you need that specific module.
Does your solution include financials (GL, AP, AR)?
General Ledger (GL), Accounts Payable (AP) and Accounts Receivable (AR) are all basic financial functionalities that are needed to manage the finances of a company, and they should be included in even the most basic ERP software solution. Some solutions are being marketed as ERPs but without financials they should not be considered a complete solution. Purchasing such a software means you will need to add license costs for a financial software as well as integration costs between the two.
1 – Does the solution provide E-commerce?
If you have or are looking to implement B2B or B2C e-commerce, you will want to know what the vendor offers in this area. A tight integration between the ERP and the e-commerce will facilitate things like pricing, inventory management and financial reconciliation. Do they provide a portal? Do they integrate with payment providers and if so, which ones?
2 – What other functionality does your ERP offer (CRM, budgeting, HR)?
This question is useful to find out if you are purchasing something that can support future growth and potentially replace other systems that you already possess, all while minimizing integration costs.
What is your software’s roadmap?
Asking the vendor about their roadmap will allow you to judge if they are continuing to invest in their software. Ask them what functionality is planned to be delivered in the next releases. It’s also important to ask them until what year they will definitely support the software. Some solutions are being slowly phased out and they may have already announced support will stop a few years from now.
Does your solution support multi-company?
A multi-company solution is required when you have two or more companies that need their books separate but easily accessible to each other due to the volume of intercompany transactions. It helps control duplicates and reduce cases of multiple entries. If you suspect your company will be needing multi-company functionality in the future, it’s best to know if the solution supports it from the start. The same applies for multi-currency.
Do you provide open APIs? Please provide a list.
Open APIs are a way for the software to communicate with external sources in a secure manner. The more APIs they have the better the chances of your data being consistent between systems in the future.
What clients, similar to us, are using your solution? Can you provide references?
Vendors will often share the names of clients, but it is important to ask which modules or solutions those clients are using. Even better, ask to talk to one of the references directly.
What does the partner network look like and how does it work?
Some ERPs are sold directly by the company that produces them and some are sold through reseller networks and integrators. Often the quality of the implementation will depend on the skills and experience of the integrator. Even if you chose the best solution, choosing the wrong integrator may result in projects costs getting out of control or requirements not understood and therefore not translated properly into the solution. The partner does not necessarily need to be local unless this is an important criterion to you. Choosing the right implementation partner will make all the difference, so find out what your options are on this subject from the start.
Acquiring a new ERP can be a daunting task, and we hope this article has helped you identify some pitfalls to avoid by asking the right questions of your vendor right from the start.