What are the Key ERP Evaluation Criteria for an SME ?

Company

Technology

Function fit

Support

Cost of ownership

Once the vendors have been identified, the team should go about a process of evaluating these criteria. Here is a definition of each criterion.

Company

Company size (annual revenues and number of employees) becomes very important in your evaluation. Who will make the best partner? Who knows my industry the best and has the most references of companies like mine? Are they committed to serving my industry? Who will be able to keep my company abreast of technology changes for the next20 years? Who will make the best vendor partner?

Technology

We find that most companies have developed a technology strategy favored by top management and IT. You will also find that ERP vendors have their technology strategy. Even though most vendors profess they are open systems, in truth each vendor has their technology “sweet spot”. Understand the technology platform and architecture for each vendor and measure it against your strategy.

Function Fit

Even though there are dozens of vendors that have a good function fit, you will find that there are only about three or four vendors that are the best fit for your business. The key in your evaluation is to quickly find those vendors that best address business best practices for your industry.

ERP Support

ERP vendors have a number of ways to support their client. The larger firms have significant support ecosystems to support their market. Buyers should evaluate all of their support systems including the following:

Consulting organization

Implementation methodology

Education

ERP implementation methodology

Maintenance and phone support

User groups

Partner network

Cost of Ownership

Learn from the customers of the vendors their cost of ownership. We find that at the “end of the day” most software vendors all get to the same price for software. A number of other factors differentiate vendors with cost of ownership. Annual support fees vary, implementation rates and fees vary, and ongoing need for support varies from vendor to vendor. Look to understand and confirm the total cost of ownership over a five year period.

Enterprise Resource Planning (ERP) adoption involves initiating the appropriate business process changes and information technology upgrades to enhance enterprise performance, quality, costs, flexibility and responsiveness. While the number of articles in ERP implementation is substantial, limited attention has been given to the ERP adoption by Small- and Medium-sized Enterprises (SMEs). Motivated by the organisation fit of the ERP concept, we propose a structured methodology for ERP system evaluation and selection which can be easily used by SMEs, as it provides the necessary information for their decision-making process. This article describes the ERP evaluation and selection methodology followed by an industrial Greek company. The proposed methodology consists of a framework built upon six imperatives, which generate a number of ERP objectives materialised through a set of levers. The analysis results in the identification of tailor-made ERP objectives, which, in turn, are used in a multiple criteria model as part of the decision-making process to select, from a list of alternatives, a suitable ERP vendor.

- Verifyable track record of success in the business's vertical with SMEs in the region

- Agreed definition of the success of the implementation (agreed project KPIs)

- Strong local support

- Clear current and future technical framework

ERP Evaluation criterias

1. Presence of all necessary modules which can be customised.

    ex. purchase, accounts,hr,warehouse,QC,QA,production, logistics, marketing, crm

2. cost of implementation and future upgrades (forecasting)

3. Maintenance or support

4. Ease of use / user training

5. success of using similar ERP software by similar organisation

most important- transfer of data from old system to new (basically ease of transformation)