ERP for startups (2) -- which software should my company go for?

A while ago we talked about ERP solutions for companies in early stages in their life-cycle.

The next obvious question was “which software should my company go for❓”.

There’s been an influx of new softwares in the last years. Some of them created from scratch, and some of them evolving from very specific use-cases, until turning into full-blown ERP systems. Particularly the latter ones present key differences between them (Say, one software that was created for project management, but that evolved or acquired new modules until turning into an ERP should be better suited for project managing than another one that evolved from an invoicing module).

So, how do you decide which one to go for?

🎯 First, you need to identify what your needs are and, more importantly, what they might potentially be.

Your needs are a consequence of your industry and your current system. The main areas that an ERP software will have are Accounting, Sales&Purchases, Marketing, Manufacturing, Inventory, HR, and Projects. Some industries can make do with general ERPs, while some others need some very specialised solutions, so choose according to this. You can reach out to other companies in your industry and ask them what they use, and what issues do they have.

⛓ Besides the core functionalities of the ERP software, it is also extremely important to review how easy/accessible it is to connect your ERP software to an external tool.

Does it have an open API? How easy is it to set-up a connection with an external tool? How many different programs connect with the ERP software out-of-the-box? An ERP system will never be as good in specialised tasks as a program created to do that task, so it’s important to acknowledge this and plan for possible integrations.

💰 Another big issue to consider is the cost of the solution.

Most ERP solutions go for a monthly subscription instead of a one-off, upfront payment. Figuring out how the price escalates is key. If the price increases with each user you create in the system, maybe you won’t be able to give users to every employee, and it’d be more cost-efficient in the long run to make an external website that your users will interact with, and that connects to the ERP . Besides these direct costs, unless you have a dedicated team, there’s also the price of hiring a consulting firm to implement/maintain the system. Adding additional modules in the future might also be an additional cost that you should plan for.

It's (usually) not as easy as getting a fixed price that you will be paying monthly, so it’s important to realise where you are, where you want to be, and how will that escalate the cost.

🙋‍♂️ User adoption is also an important thing to consider.

Not just how easy it will be for your employees to use it daily, but how many people and how widespread its use is. This affects you in several ways. First, the more users a software has, the easier it’ll be to find employees to manage it. Besides this, more users means that someone has probably had your potential problems and figured out a solution that you could emulate. On top of this, a “big” ERP software will have more consulters/vendors to choose from.

Somewhat relating to the previous point, is how hands-on you will be able to be with the ERP. There are some solutions that require you to manage everything, like deploying the server you will install the ERP on. Some other solutions just require you to create an account, and you’re ready to go. If you have the manpower to do it yourself, these solutions are usually a bit more cost-effective.

🤸‍♂️ Flexibility is also a big one.

Some ERPs are very strict in how they work, and will not let you go “behind the curtains” and change and modify things, while others are a lot more flexible. There’s pros and cons to both, so it’s not an easy choice. A flexible ERP will let you adapt to changes in your business faster, but might get a bit muddled up as time goes on and you make changes on top of changes.

These are just the main things you should always keep in your mind when choosing, but there’s no easy checklist of things an ERP should do. The only way to figure out which ERP is right for you, is to get out there, keep your options open, and get as much advice from your peers as possible.