ERP Software and Accounting Software Best Practices
Enterprise resource planning software application best practices are normally categorized by market demographics, software module and business objective. For simplicity, we've used this web page to highlight several best practices as they are aligned to a typical ERP software life cycle and system evolution. We'll be appending this best practices web page periodically in order to continuously expand the list.
ERP Software Selection Best Practices
- In your ERP software system review, always assemble a Request For Proposal (RFP) document as part of the software selection project. Many times there is a temptation to bypass this effort and investment, however, the RFP process is extraordinary valuable in identifying, categorizing and prioritizing the company's most critical business systems requirements.
- Rely on the RFP process to down select two or three software manufacturers for on-site software demonstrations. If RFP scoring determines that two ERP software systems are far and above the rest of the group, limit your demonstrations to just those two. If the RFP scoring shows a close three horse race, then increase to three ERP software demonstrations. Don't be tempted to incur more than three application software demos as it will likely overwhelm attendees and cause more confusion than help.
- When it comes to software demonstrations, absolutely do not permit generic presentations. Give each software manufacturer a sequential and detailed demonstration script well in advance so that the manufacturer can fully demonstrate the software capabilities which are most important to your organization. Some evaluators also limit powerpoint presentations to 10 minutes in order to reduce coverage on the software company's CEO and permit more focus and time of the application software.
- After the preferred ERP software or accounting software system is determined, be sure to append that manufacturers RFP response document, as well as any other document that were relied upon in selecting the designated vendor, to the manufacturers software license agreement. Many times this request will be initially met with resistance, however, if pressed most manufactures will ultimately agree (after all, if they don't stand behind their RFP responses, how can you believe in them?)
- If you are considering a software-as-a-service (SaaS) ERP system or hosted accounting software solution, request a historical schedule showing all unplanned AND planned system downtime incurred over the last three years. You may want to also ask enough probing questions to determine whether the SaaS ERP provider clouds downtime under the guise of maintenance.
- Also, if you are looking to subscribe to a hosted ERP solution, request an information security briefing by the manufacturers security team in order to discover and validate the data privacy and security protection mechanisms and safeguards for your critical data. It may be a worthwhile effort to actually visit the hosting company's data center.
- Lastly, with software-as-a-service ERP systems or hosted accounting systems, be certain to get the SLA (Service Level Agreement) in advance. Make sure the SLA is not watered down or impaired with "planned maintenance" exclusions and that there are financial credits or penalties for failing to achieve the guaranteed uptime. Unfortunately, it can be a real struggle to acquire a meaningful SLA with certain SaaS ERP manufacturers. However, several SaaS companies such as Oracle, SAP and Aplicor routinely provide SLA coverage free of maintenance exclusions.
ERP Implementation Best Practices
- Unless you are experienced with ERP implementations, lean toward a multiple phased implementation plan instead of the big bang approach. While the big bang method can decrease the total implementation period, it also increases risk.
- An ERP software implementation period is often an ideal time to reengineer business processes and implement business process improvements.
- Be certain to perform a data sampling analysis of your legacy data very early in the implementation project. Most organizations are not fully aware of their poor data quality until they reach the data conversion step. This late recognition can put the entire project behind at an early phase.
- Recognize that user adoption is a common application software implementation obstacle and implement a structured change management program (CMP) early in the planning phase.
- Don't over-customize the ERP application or accounting software. Modifying the manufacturer's commercial information system brings significant risk to the implementation project. If software customization is necessary, determine whether it can be deferred until after an initial go-live of the unmodified software solution.
- Don't under-estimate or under-budget the user training program. This is a common mistake that exacerbates user adoption challenges. Users need more than a single classroom training course before going live with a new enterprise resource planning application.
ERP Software Operational Best Practices
- Recognize that ERP systems and accounting software applications are a continuous journey and not a destination. For sustained success, business applications require continuous process improvement and constant learning. Although the effort is significant, the payback in terms of increased efficiencies and a greater contribution to the company's most strategic objectives more than offset the effort and costs.
- Monitor, measure and trend application software utilization. Be sure to take immediate action if utilization unexpectedly decreases (as this could be an early red flag indicating a user adoption issue). Prompt discovery can lead to a timely remedy.
- Create a user training curriculum and program for new-hires. Also be sure to offer self study guides and help manuals for users to incur advanced learning at their desire and at their own pace.
- Schedule departmental, line of business, geographic or other group training classes after each ERP system version upgrade. These classes should focus on new system capabilities and can usually be completed in a day.