ERP system selection methodology

An ERP system selection methodology is a formal process for selecting an enterprise resource planning (ERP) system. Existing methodologies include:

Irrespective of whether the company is a multi-national, multi-million dollar organization or a small company with single digit million turnover, the goal of system selection is to source a system that can provide functionality for all of the business processes; that will get complete user acceptance; management approval and, most importantly, can provide significant return on investment for the shareholders.

Since the mid-1970s, when there was widespread introduction of computer packages into leading companies to assist in material requirements planning, software companies have striven, and for the most part succeeded, to create packages that assist in all aspects of running a business from manufacturing; supply chain management; human resources; through to financials. This led to the evolution of ERP Systems.

Accordingly, a significant number of packages purporting to be ERP systems have entered into the marketplace since 1990. There are packages at the upper end of the market and a vast quantity of other packages that vendors claim to be ERP Systems. There are also packages that claim to be best of breed for certain processes [such as planning] and sold merely as an add-on to an ERP System. The options are many and this, in reality, creates a problem for the company who has to make a decision.

The complexity of selecting an ERP system is further exacerbated by the fact that some systems are geared for discrete manufacturing environment where a distinct amount of items make up a finished product while others are more suited to process industries such as chemical and food processing where the ingredients are not exact and where there might be re-work and byproducts of a process.

In the last decade, companies have also become interested in enhanced functionality such as customer relationship management and electronic commerce capability.

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