Growing manufacturers know how quickly operations can become complex. From balancing production schedules, supply chains, human resources, and finances, there are too many moving parts for spreadsheets alone to handle.
That’s where Enterprise Resource Planning (ERP) systems come in.
ERP solutions are powerful tools that bring all your operations together under one platform to streamline operations, make data more accessible, and give confidence to decision-makers.
But with so many ERP options out there, selecting the right one can feel overwhelming. In this article, we’ll give our expert opinions on how to evaluate ERP for manufacturing and how to navigate the ERP evaluation process to find the perfect fit.
ERP Evaluation Criteria to Help You Get Oriented
When evaluating ERP options, you need to look at a few core criteria, also laid out in our ERP selection criteria checklist. Think of these criteria as the must-have elements that will keep your manufacturing processes smooth and scalable. Here’s what to keep an eye on:
- What are your industry’s requirements? Manufacturing isn’t like other industries. You’ve got specialized needs for production planning, inventory control, quality management, and regulatory compliance depending on what you manufacture. An ERP with manufacturing-focused features from the start will save you time (and budget) on customizations.
- How fast are you expecting to grow? Your business today isn’t what it will be tomorrow. Whether you’re looking to expand product lines or tap into new markets, make sure your ERP system can grow with you without a complete overhaul every few years.
- How technical does a user need to be to use your prospective ERP system? A powerful ERP system doesn’t help much if it’s difficult to use. A user-friendly interface keeps your team engaged, reduces training time, and lowers the chances of human error. Test drive the interface with different teams to see if it’s intuitive for everyone, not just your most technical staff.
- Can your prospective ERP system integrate with or replace your existing systems? Think about all the systems you’re currently using, from your CRM to supply chain management tools and even IIoT platforms. The right ERP should integrate seamlessly with existing software (or replace it) to create a cohesive environment that brings all your data to a central hub for reporting and analysis.
- Does your ERP provider have a positive reputation? Your ERP provider will be a close partner throughout this journey. Look into their reputation, their experience with manufacturers, and the level of ongoing support they offer. A vendor who understands manufacturing challenges can offer solutions that actually work for your needs.
How to Evaluate an ERP System in 4 Steps
Now that you understand what you’re looking for, let’s jump into a step-by-step approach to evaluate an ERP solution. Evaluating an ERP system is more than a checklist exercise. It’s an in-depth process involving demos, consultations, and real-world testing.
Here’s how to make the ERP evaluation phase as thorough, speedy, and successful as possible.
1. Request Demos and Proof of Concept (PoC)
Once you’ve narrowed down your list of potential ERP solutions, request product demos. Most vendors will offer customized demonstrations that show how the system handles your specific requirements. Also seek out reviews, testimonials, and case studies. A proof of concept (PoC) is even more beneficial, allowing you to test the ERP in your environment with real data so you have an accurate view of how it will perform in practice.
2. Identify Stakeholders and Get Their Buy-in
Implementing an ERP solution impacts all departments, from production and inventory to finance and customer service. Engaging leadership from each area helps your implementation team understand everyone’s needs. Being open to listening and receiving feedback will increase buy-in and smoother adoption once the ERP is implemented.
3. Evaluate ERP Reporting and Analytics Capabilities
We know manufacturers rely on accurate, real-time data to make smarter, more-informed decisions. Look at sample reports for each ERP system’s reporting and analytics tools to determine how they allow you to report and customize insights Dashboards, customized reports, and predictive analytics are essential tools that will help you make better decisions and stay ahead of the competition.
4. Determine Customization and Configuration Needs and Options
While some customization may be necessary, extensive customization can lead to longer implementation times and higher costs. During ERP evaluation, look for systems that already have the configuration options you need to reduce the need for custom code. This balance will provide flexibility without making the ERP overly complex or challenging to upgrade.
ERP Evaluation Checklist for Manufacturers
An ERP evaluation checklist can help you keep your priorities in line as you assess different options, keeping the selection process focused on what truly matters.
Here are the most important steps to include in your checklist:
- Define Business Objectives: First, clarify what you want from your ERP. Do you need more accurate demand forecasting? Better control over inventory? Stronger financial oversight? Setting clear objectives early on helps you evaluate ERP systems based on how well they can deliver.
- Pinpoint Essential Features and Modules: ERP systems offer a range of modules, including finance, production planning, inventory, quality control, supply chain management, and more. Identify which features are must-haves for your business to avoid paying for extras that won’t add value.
- Evaluate Total Cost of Ownership (TCO): Beyond the upfront cost, include other potential expenses in your evaluation, like training, customization, and long-term maintenance. Total cost of ownership offers a clearer picture of how an ERP solution fits your budget over the long haul.
- Check the Implementation Process and Timeline: Every ERP solution has a different implementation timeframe, often affected by factors like system complexity and the level of customization required. Get an estimate from vendors on the expected timeline so you can plan around it and keep disruptions to a minimum.
- Plan for Data Migration and Security: Migrating data into a new ERP can be challenging, especially if you handle sensitive information. Look for solutions that offer comprehensive data migration support and ensure they meet your data security standards.
Watch Out for Common ERP Evaluation Pitfalls
Even with the best checklist and criteria, some common pitfalls can derail ERP evaluations. Here’s what to avoid to keep your ERP journey smooth and successful:
The first pitfall is implementing a new ERP solution without a thought to change management. Rolling out an ERP can be a big change for your team. Not only do they have to learn a new system, it impacts their workflows, too. Without a plan to manage this change, employees may become frustrated and resistant. Carve out ample time for training and make sure everyone knows how the ERP will improve their day-to-day work.
Another common pitfall we see is overlooking mobile and IIoT compatibility. These days, remote access and IIoT data are essential for real-time insights (unless your industry restricts it, of course). We recommend staying on the lookout for ERP systems that support mobile access and integration with IIoT platforms, so you can check on operations anytime, anywhere.
Finally, many manufacturers find their business growing and want to act quickly to address their current needs without an eye to the future. ERP systems should be long-term solutions, so be sure to plan for the future, even when calculating your ERP ROI. Be sure to consider how the system will fit your business as it grows and changes over the next decade, at least. Prioritizing flexibility and scalability now can save you time and budget down the road.
The Power of Partnering with an ERP Consultant Like Godlan
The ERP evaluation process is detailed, with plenty of nuances that can impact the success of your implementation. That’s where partnering with an experienced ERP consultant can make all the difference. A consultant who understands the manufacturing industry will offer insights you might not have considered, helping you select, implement, and optimize your ERP solution.
At Godlan, we specialize in helping medium-sized manufacturers find ERP solutions tailored to their unique needs. With over 40 years of experience in manufacturing and deep knowledge of ERP systems built specifically for the industry, our team is ready to support you every step of the way—from initial evaluation to seamless implementation. To learn more about how we can help, schedule a consultation today.
