ERP Tool Evaluation
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This document outlines a comprehensive approach for evaluating ERP software, detailing the steps to identify necessary modules, define functional and technical requirements, and assess available products. It emphasizes the importance of customizing criteria based on specific business needs and provides examples of evaluation metrics including cost and requirement fulfillment scores. The aim is to enable businesses to find the most suitable ERP tools by systematically comparing functionalities and costs of different options.
ERP Tool Evaluation
- 1. Evaluation of ERP Software How to evaluate the perfect ERP tool for your business… http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 2. Requirements • Steps – Identify modules required – Detail the requirement for each module – Identify the products to be evaluated – Collect inputs – Compile the results http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 3. Identify Modules • Each EBS product has large number of modules. As a 1st step, company needs to be clear on what it is trying to achieve with the Product: – CRM – Pricing – Project Management – HRMS – Timesheets – Payroll – Payables etc… http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 4. Identify requirements from each module Detailing out various criteria to evaluate a tool based on various module wise requirements. The list of modules and the desired functionality is indicative and each business must build on these as per their requirements. The requirements can be further bifurcated into: 1. Functional Requirements 2. Technical Requirements http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 5. Functional Requirements for each module • Timesheet – Set up Calendar with holidays – Integrate with the HR and PM module – Ability to setup rules and customize as per various offices • Minimum 8 hour rule in one office vs 9 hour in another – Flexible approval workflow. – ……to be added with more criteria basis your business requirements • HRMS – Ability to change employee information with an effective date – Ability to have different category employees (Full time, Contractors, Third Party) – Ability to allocate employees to projects from different companies – Ability to maintain a single employee code irrespective of inter company transfers of employees – ……to be added with more criteria basis your business requirements • GL – Drill down from General Ledger to Sub-ledgers. – Multi-company, business unit capabilities – Budgeting tool with effective dates with capability to report variance on actual and budgeted – Ability for uploading journals from Excel / other PC files – Ability to perform automatic currency conversions – ……to be added with more criteria basis your business requirements http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 6. • Payables – Ability to create multiple vendors with contractual information such as effective date, valid through date, vendor name and address, etc. – Ability to integrate with Projects module – Ability to handle Multiple bank processing – Ability to put vendors, vouchers on hold as needed – Ability to inquire invoices by vendor – ……to be added with more criteria basis your business requirements • Projects – Ability to allocate employees entered through the HR module – Ability to allocate a resource on multiple projects with varying bill rates. – Ability to define percentage allocation for each employee allocation – Ability to define start and end date of each employee allocation to a project – ……to be added with more criteria basis your business requirements • ……to be added with more modules basis your business requirements http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 7. Technical Requirements for each module – Can all application modules of the solution run on the same server? – Are the software applications Object Oriented or Object Based? – Does your software solution support deployment to multiple tiers? – Can end users configure their own screens? – What is the estimated time for a user to accomplish backup(s)? – ……add more items to this list basis your requirements. http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 8. Identify Products • There are multiple ERP tools available in the market. Examples being Oracle Applications, SAP, PeopleSoft, JD Edwards etc. While some has the desired functionality inbuilt in them, some needs to be customized. Need to evaluate each tool on these parameters as well. – Software License Cost for users – Add-on 3rd party software cost – Customization Cost – Implementation Cost – Maintenance Cost http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal
- 9. Collect Inputs for each Module Assign scores to each feature – say 0 for No and 1 for Yes This table is indicative. You need to specify each module and criteria along with each tool to be evaluated http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal Available Available as Add on Customization Available Available as Add on Customization Available Available as Add on Customization Functional Timesheets - Integrate with the HR and PM modules 1 0 0 0 1 0 … … … Functional HRMS - Ability to change the employee information with an effective date 0 1 0 1 0 0 … … … Functional GL - Drill down from General Ledger to Sub Ledgers 0 0 0 0 0 1 … … … Technical Can end users configure their own screens? 1 0 0 0 1 0 … … … 2 1 0 1 2 1 … … … Requirement Type Criteria Sub Total Total ERP1 ERP2 ERPn… 3 4 …
- 10. Collect Inputs for each Product Plot cost against each head. This table is indicative. You need to specify other costs and criteria as well in this table. http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal Description ERP1 ERP2 ERPn… Software License Cost for 10 users 120000 80000 … Add-on 3rd party software cost 0 3000 … Total software Cost 120000 83000 … Customization Cost 65000 80000 … Implementation Cost 200000 2000 … Maintenance Cost 25000 15000 … Total Cost 410000 180000 …
- 11. Compile Results http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal Plot below inputs from the both the tables into one matrix and decide which tool better suit your needs and is cost-effective for you. – Requirement Fulfillment Score – Cost
- 12. http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal In the indicative example above, clearly ERP2 tool is better than ERP1 tool because of higher requirements fulfillment score and lesser cost. Evaluation Parameters ERP1 ERP2 ERPn… RequirementsFulfillment Score 3 4 … Overall Cost (in US Dollars) 410,000 180,000 …
- 13. Thank you! Divesh Singhal http://www.slideshare.net/DiveshSinghal1 https://in.linkedin.com/in/diveshsinghal Image Credits: www.erpselection.co.uk www.pssiusa.wordpress.com www.selecterp.co.uk www.softwarethinktank.com www.erpfocus.com www.litcom.ca www.ultraconsultants.com Further Reading: https://en.wikipedia.org/wiki /ERP_system_selection_meth odology http://www.compudata.com/ 6-selection-criteria-for- choosing-an-erp-system/ http://www.unit4.com/us/res ources/erp-software- selection-tips