ERP Requirements Gathering: 3 Best Practices
Guest Post by Geoff Whiting, ERP Focus
Read time: 4.5 min.
Choosing an ERP can be an exciting time for any organization, but there’s also plenty of worry when it comes to choosing the right platform and solving the correct problems. If you get it wrong, your ERP could end up being a costly, short-term solution that you outgrow.
So, to plan for scale and choose well, you’ll need to gather an ERP requirements list and put it into context for your business. There are many great tools to help, but long-term success asks you to think about something deeper than a simple list of functionalities. In this list of best practices, we’re going a little further outside the box than you might be used to because there are big-picture aspects of an ERP that can be overlooked.
1. Tie requirements to business goals
What do you want to accomplish with your ERP adoption and selection? What are the uses and needs of the separate groups who will use the ERP have?
Common goals around an ERP selection include automating systems, improving how well your team can respond to customers, supporting real-time data development, and more. Once you’ve created your list of aims, work with that ERP selection team to get everyone on the same page.
Together, you’ll want to determine which goals are most relevant and what process changes or ERP modules are needed to reach those changes. If you’re going to reduce overhead or inventory costs, then you’ll want an ERP that includes warehousing and shipping modules designed to help you analyze your orders and inventory needed to meet those orders.
Have each of your experts or team leaders point to specific ERP functionality that will support their aims. If they can explain the connection to everyone else in a straightforward way, then it’ll be easy to explain it to your entire staff and get them to adopt the change. The more confusing the rationale, the harder it will be to get leadership to pay for the module and staff to use it.
ERP vendors will be eager to provide you with case studies and reports about what their customers have achieved. When you hit a stage where you’re curious if an ERP can help with a certain business goal or improvement, ask vendors. If multiple say “yes” and provide support, it’s a safe bet.
If you want to get some ideas in areas where other companies are looking for improvement, see this report from Software Path that surveyed the top reasons why companies choose their ERPs:
- To increase efficiency (24.7%)
- To reduce outdated legacy technology (24.1%)
- To gain greater functionality (23.6%)
- To consolidate disparate systems (18%)
- To support growth (14.4%)
2. Prioritize ERP requirements around process mapping
Move on from your business goals to looking at the way you accomplish related tasks. If you want to improve HR efficiency with an ERP training module, specifically define your existing training practices. Mapping these processes will show you where an ERP module can integrate and may clarify what kind of support you need.
Detailed process mapping will show you every place where an ERP intersects with customer and employee actions. It’s an excellent exercise to learn specific requirements you have as well as to identify bottlenecks and other pain points that exist in your operations. Identifying these areas of concern can also help you prioritize the gains or changes you identified when tying requirements to business goals.
You’ll be able to take another read through your requirements list and adjust it relative to your pain and articulate the value of each module or tool in precise terms. Get specific here to best solve these issues. For example, let’s say your business processes 8,000 transactions per month. Automating these with the ability to scale up to 12,000 transactions monthly would deliver immediate savings by reducing time and labor, but also allow you to grow significantly without needing any new software or upgrades.
In this stage, you’ll also uncover some requirements of the ERP that are outside of your processes. Perhaps the most common is support for third-party EDIs that will provide a variety of customer, order, and marketing information.
Your existing software and your partners will have some technological requirements for you. Building out the workflow can show you when you’re sending or receiving information with a partner EDI, letting you know which modules require the support. The requirements list you have must fall in line with process maps or else you’ll be paying for a service that you can’t integrate into your operations.
3. Consider your change management plan
The best features of a new ERP are the features that your team will use. Think ahead about which items your organization is demanding now, those you can train your team to use, and where they might be hesitant. If you can plan out how your team will adopt a new feature, then it is a top consideration.
If you’re stuck on how to get staff to use a function, then it might not be right for you. For example, if you’re outsourcing your warehousing or have customer service reps that spend more time in the field than at the office, some standard ERP modules might not be accessible or useful.
You can also look at specialized change management solutions outside of the traditional automation support.
Business process reengineering (BPR) is a change management practice that emerged in the early 1990s, asking you to look at adjusting your workflows instead of running headlong into automation. Instead of trying to automate your existing processes, look at what changes you could make to create an entirely new process when you adopt an ERP.
With HR and accounting systems, could you change how you onboard employees or invoice customers? Could a warehouse tool allow you to change how you pick and pack orders or change your inventory layout to be more efficient?
If you currently have separate systems that your ERP would replace or integrate with, you’ll be able to improve your operational efficiency with the new system and a BPR plan to implement it.
These are just three of the best practices for gathering your ERP requirements list that will help you think about the big picture and keep your company focused on growth and scaling. Plan for scale or else you’ll end up buying a whole new system and disrupt the all-important growth any business needs.
About the Author | Geoff Whiting
Geoff Whiting writes for ERP Focus. He is an experienced journalist, writer, and business development consultant with a focus on enterprise technology, e-commerce, and supply chain development.
ERP Focus provides knowledge and evaluation resources to ERP software professionals. Whether you’re already using ERP or considering your first implementation, our aim is to give you free access to the latest knowledge, research and tools needed to navigate the ERP market.