In the competitive markets of India you cannot be parochial; you have to understand the modern ways, the current market condition, and the needs of the customers for people to buy what you are selling. ERP is helping many SME’s in India and around the world in increasing their profit and make the best use of resources. ERP will change your way of manufacturing, finance, sales as well as CRM so it is necessary to evaluate ERP before implementing it. So how to evaluate a good ERP? There several factors to evaluate a good ERP but before starting to evaluate an ERP, first requirements that are needed have to be defined.
A proper analysis has to be done to define the requirements of the organization so as to avoid any unnecessary or redundant solution. Various factors which are used to define the requirements are:-
(i) their organization’s existing technological environment
(ii) the functional requirements
(iii) the technical requirements
(iv) the organizational (business, procedural, and policy) requirements
(v) the different user areas and functions
(vi) existing processes in the areas that were to be affected by the new software
After properly analyzing this factors and perfectly defining the requirements should any further steps be taken.
Evaluation of ERP:
We are giving money. What are we getting in return? This is what comes to mind whenever we buy anything, now in case of ERP to understand what you are paying for , proper evaluation have to be done. T o evaluate if an ERP is good or bad you have to look into several constituents, they are
1.) Improvement over current systems – What are the improvements ERP will bring to the systems that is already in place? ERP can bring many improvements to the system depending upon the type of ERP and the requirements of the organization. Some of this improvements are:-
(I)Automating Processes-Advanced ERP solutions have many options for streamlining
departmental procedures and reducing reliance on manual processes, saving both time and money.
(II) Enterprise Analytics-A graphical, user-friendly interface with trend analysis and exception
reporting replaces pages of financial information, and a clear, top-level dashboard view is critical to effectively monitor business performance.
(III) Integrated CRM- A traditional CRM operating separately to ERP misses many opportunities provided by an integrated solution. It is now possible to fully integrate CRM in a more dynamic and real-time way to your traditional ERP transactional system delivering the ultimate goal of a single view of the customer.
(IV) Improved Mobility- Mobility is moving into the mainstream. Its growing popularity comes from the ability for workers to use their ERP applications on their mobile devices not just in the office. Warehousing staff no longer have to walk to a workstation to enter data, and drivers on the road can easily maintain records and check schedules.
2.) Customization – processes in the ERP software is more often than not different form the processes of the organization. Now the solution to this is either change the processes of the industry according to ERP software or change ERP software according to industry. This changing of ERP according to needs of organization is called customization. While selecting an ERP, organization have to properly evaluate if the ERP software can be customized according to the industry or not.
3.) User interface- good user interface is also important in evaluation of ERP. A practical, simple user interface prevents common mistakes, speeds up daily activities and ensures new procedures start off right. Problems during implementation. So a simple user interface have many benefits while a complex user interface can lead to several troubles
4.) Is the organization’s existing DBMS compatible with the proposed solution? A DBMS is designed to be used by a small subset of technical people like developers, DB Admins, and Data Architects. Many organizations don’t want to change this database and hence ERP have to be compatible about working with this database.
5.) What is the architecture of the proposed solution: client/server, two-tier, three-tier, or other?
6.) What is the capacity (minimum and maximum) of the proposed solution? As the question suggest capacity is simply the amount of data that can be stored in an ERP database. As different kind of organization produces different amount of data everyday it is necessary to evaluate if the ERP database can handle this amount of data or not.
7.) Scalability of the system -scalablity of the system simply means if the system can scale itself with the future changes i.e. how future proof the system is. New departments can be added to the organization after a period of time, if the ERP system can handle this changes or not should be found out first before taking an ERP system.
8.) Training (in-house or external to the organization; does vendor conduct the training or is outsourced?) Due to different kinds of user interfaces it is difficult to operate ERP without completely knowing how to operate it. This can be properly learned from the provider. it should be properly inquired if providers are willing to give proper training after the implementation or not.
9.) Performance – Before making huge changes in the organization according to the ERP, proper evaluation on the effectiveness or performance of ERP should be done. Measuring the performance of ERP before implementation is difficult as past records will show its performance for different organization however if it will give the same result for your organization can only be known after its implementation. However measurement of performance after implementation is not that complex. Factors in which performance will be measured should be defined first. And then simple comparison between the expected and measured results can be compared to see the efficiency of the ERP.
10.) Security features – security are there in every organization. And when so much data is integrated in a single data security concerns rises. So how can you evaluate the security features of an ERP? Some of the security aspects that are considered in an ERP are:-
• Security policy and administrator: ERP experts have to provide such a way that explicit and well defined security policies can be easily defined and maintained. The security policies will offer the rules for the access of subject to object, and these are the constraints put on the administrators when they are granting/denying permissions to the users.
• User authentication: to verify whether the user is the same person as he claims. Separation of duties: tasks must be classified such that certain tasks can only be performed by certain users or roles.
• Authorization: to verify whether the user has access to the relevant resources. Depending on the authorization rules, the user is granted access. Time restriction: the access is permissible only during certain time.
• Log and trace: the logging and tracing of relevant events has to be done with preventing the log files from breach.
So, can you completely evaluate ERP from these factors?
It will be difficult to answer this question. These are among the most basic factors which more or less cover most of the organization but the value of some factors are more for some organization while they are less for others. Like ERP can be used both in cement and biochemical industries. But a biochemical industry will choose an ERP whose security features are top notch while cement industry may or may not concern itself with the security of ERP. So evaluation of ERP depends on the type of organization as well.