How to Compare ERP Software

How-to-compare-ERP-softwareEnterprise Resource Planning software (ERP) packages are complex systems that accommodate a variety of business functions such as accounting, inventory, order processing, purchasing, contact management & customer communication. Due to the complex nature of ERP systems, it can be difficult to compare them. The following are several ways you can differentiate between software offerings:

Core Components

This first measure is one of the most obvious but still warrants mention. To be considered true ERP software, the system should be able to accommodate a variety of business processes across the organization. Not all vendors abide by the same definition of ERP as it is technically defined rather loosely:

  1. The systems share a database
  2. The systems share information amongst each other

  3. Information is available in real-time

  4. The system and installation is elaborate

Therefore, it is important to compare the overall components. Does the system have accounting & inventory modules? Customer Relationship Management? Etc.

The People

Many ERP systems are similar in their functionality. Where they tend to differ more greatly is in the people behind the software. Evaluating your experience with the people behind the company is important to get a feel for how you think it will be to work with them. Have they been attentive to your needs? Have they been personal and put your business needs first? Do they understand your industry?

The Price

Another obvious, but dangerous, means of comparison is price. Certainly price is very important in making a decision but always be careful. Low pricing may be attractive but may be the result of low-balling. Higher pricing is usually a safer bet in terms of functionality and conservatism, but you may be paying more than you need to. Instead, the art is finding a balance between the two. A system that has a price that is agreeable to you, can meet your business needs, and is being realistic about costs is the appropriate choice.

Meeting Your Needs (Customization & Software Fit)

Software flexibility is a great way to compare software. Some vendors offer a “canned” piece of software that is rigid and cannot easily be adapted to your specific business. Every business has something unique about them that may require customization so it is important to find a system that is able to adapt to these unique needs.

Company History & Current Standing

Look at a company’s history to determine viability. The longer they have been around the better – keeping in mind that ERP software has only been around since 1990. Also, bigger is not always better as large companies have been known to dump software products fairly frequently, forcing upgrades or software upheavals. Instead, look at the company’s success stories, frequency of updates and be sure they are constantly adding to the system instead of winding it down. And better yet – talk to their customers.

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