Recently, I have been posting a series of blogs taking a deeper dive into some of the data presented in an infographic that I collaborated with SAP to produce. The infographic titled “So, What’s Stopping You From Using ERP?”, utilized data from my yearly ERP Benchmark survey, and can be used as a quick reference guide for organizations that are considering implementing ERP. In my last blog, I noted some of the reasons that organizations without ERP are citing for not implementing ERP. Today, I wanted to comment on the top selection criteria that organizations that have decided to take the plunge with ERP are using. The following data is taken from my report, To ERP or Not to ERP for SMBs: What Can ERP Do For Me?
So, what should organizations look for when selecting an ERP solution? Aberdeen’s ERP Selection, Implementation, and Training survey of 173 SMBs found that the most important criterion in ERP selection is functionality (Figure 1). If the functionality an organization needs is not available in the selected ERP, then the organization will not see the full range of benefits from using that system. Ease of use is also important: if employees cannot use ERP, they will abandon it or make mistakes. Of course, total cost of ownership is a top concern for SMBs. Lastly, since ERP is designed to be an end to end solution, 34% of respondents stated that it must be an integrated suite, rather than multiple point solutions.
Source: Aberdeen Group, December 2011
You’ll notice that the question of whether or not to choose cloud / Software as a Service (SaaS) or on-premise ERP is not addressed. Data from my SaaS and Cloud ERP Trends, Observations, and Performance 2011 report finds that 41% are seeking the best fit solution, regardless of deployment method. Best fit could mean a variety of things. Can the ERP selected support the processes that are essential to the organization’s business? Does the price point work for the organization? Does the organization want to pay an upfront capital expenditure or pay for ERP as they go (and treat it as an operating expense)? Does the organization lack the IT resources to fully support an on-premise solution? Organizations should consider these other factors first, and not choose their ERP based solely on the deployment method. Still, in the case of ERPs that can be delivered either cloud or on-premise, the option gives SMBs flexibility to choose based on their organizational needs. My next blog in this series will explore the reasons that smaller organizations are choosing cloud ERP.
If you’d like to take part in my 2012 ERP survey and receive access to my research, please click here.