Chapter IV: How to Identify Requirements for ERP Software

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How to Identify Requirements for ERP Software

Previously, you learned about what ERP software really is, its benefits for all businesses, as well as its core modules. In this chapter, HashMicro will help you choose an ERP system that suits your business needs.

Before choosing an ERP vendor, you must first understand what your business needs so that you can sort out which ERP features and modules your organization really needs, which ones are not important yet can be useful later, and which ones are nice to have but unnecessary.

Here are some steps that need to be taken in the requirements gathering process.

Determine Your Organization’s Needs

You cannot determine your organization’s needs alone, even if you are the decision maker. There are several things that you must analyze and you must also involve other stakeholders, employees, and even your clients.

Read the related article: What is ERP and Why is It Important for Businesses?

You may need an ERP system to integrate multiple business processes and make them more efficient. Or, you might need the one that can meet the urgent needs of your organization and is scalable enough to keep up with your business growth.

Here are some questions to think about before deciding to implement an ERP system in your organization.

What are the challenges faced by my business?

How to Identify Requirements for ERP Software

First of all, you have to find out what challenges your organization is facing. Analyze your current business conditions by looking at the KPI of each department and comparing organizational objectives with the results achieved.

Find out what business processes take the most time and money, but need to be done quickly.

For example, if you are a retailer, you may have problems managing the stock of goods, allocating budgets for purchases, processing customer payments, or tracking the delivery of customer orders.

Another example, if you run a construction business, you may have difficulty managing project schedules, planning budgets for projects, monitoring employee performance, managing their salaries, or maintaining your contracts with clients.

After gathering general requirements, then identify your business’s pain points in more detail. This will help determine whether you need customization or add a few new features in your ERP system.

What solutions does my business need?

You may still find it difficult to imagine what your organization really needs. However, you can summarize your expectations from the ERP system that you will implement.

For example, currently you have difficulty understanding your customer’s needs. Thus, you might need a system that has complete and accurate reporting tools that allow you to analyze consumer behavior and forecast future demand in the right way.

Another example, you have a manufacturing business and you have several warehouses in different locations. You have difficulty monitoring logistics and shipments at each warehouse. Therefore, you might need an ERP system that provides solutions for managing multiple warehouses.

Who will benefit from the ERP system?

When gathering your business requirements, you must be objective and able to prioritize the needs of your entire team.

Talk to your employees to identify how ERP systems can help drive efficiency in their departments. Ask them about the obstacles they face and find manual processes that take time and prevent them to meet their objectives.

Will my budget cover my requirements?

After listing your requirements for ERP software, you need to make sure that you have enough budget to implement an ERP system that suits your specific needs.

Keep in mind that the more customizations you need in an ERP system, the higher the investment costs you will have to spend.

Therefore, make sure you choose modules that will truly benefit your business development.

Which ERP Implementation Does Your Organization Need?

How to Identify Requirements for ERP Software

In the first chapter, you already learned about the types of ERP deployments that are currently available. Now it’s time to determine which one will be more effective for your business.

If you want to manage your own ERP system and  involve your IT staff to manage the server, then an on-premise ERP system might be the right choice. However, it usually requires high costs and longer implementation times.

If you want a faster implementation time and more affordable investment costs, then a cloud ERP system is the right choice. With this ERP deployment, you don’t need your own server since all your data is stored in the cloud and managed by the ERP vendor.

Or, if your organization needs a combination of both cloud-based and on-premise ERP systems, then you can choose hybrid ERP as an alternative.

Whatever the type of ERP implementation you choose, the decision made must fit the organization

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