Choosing the right ERP solution is an important but often daunting task for manufacturers. The right ERP solution can provide significant benefits to the efficiency and effectiveness of business processes.

This survey offers insight into the key criteria manufacturers look at when choosing an ERP system.

Main selection criteria

An Aberdeen survey found that manufacturers pay particular attention to four core criteria when choosing an ERP system:

1. Functionality: This is the most essential criterion for manufacturers. The ERP solution must provide all the necessary functions to effectively support the specific business processes. Functionality ensures that all aspects of manufacturing, from procurement to distribution, run smoothly.
2. Usability: This criterion is almost as important as functionality. An ERP system must be intuitive and easy to use to ensure wide acceptance within the organization. If employees cannot easily use the system, the implementation is likely to fail. User-friendliness contributes to faster adoption and higher productivity by making the system easier to use.
3. Total Costs of Ownership (TCO): While cost is an important consideration, it ranks third. Manufacturers understand that the initial investment in an ERP system can be significant, but they want to ensure that the investment will provide a long-term return. TCO includes not only the acquisition cost, but also the cost of implementation, maintenance and any future upgrades.
4. Integration: The ERP system must be able to integrate seamlessly with existing software and technologies. This is essential to ensure a unified data source that can be used throughout the organization. Integration prevents data silos and ensures that all departments have access to the same, up-to-date information.

Other important criteria

In addition to the four main criteria, the following considerations also play a role in choosing an ERP system:

• Future software costs: Manufacturers want to be sure that costs for software updates and maintenance remain manageable. An ERP system must remain cost-effective even after initial implementation.
• Integrated suite instead of multiple smaller solutions: Manufacturers prefer an all-in-one system rather than different software programs for different functions. An integrated suite ensures consistency and simplicity of use.
• Adaptability: The ERP system must be flexible enough to adapt to changing business needs without requiring large investments. Adaptability is essential for growing companies and ensures that the system can grow with the organization.

Specific industry needs

Aberdeen found that 46% of manufacturers prefer ERP solutions designed specifically for their industry. Industry-specific functionalities can have a significant impact on system efficiency and effectiveness.

For example, the requirements for a food-and-beverage manufacturer are quite different from those for an industrial equipment manufacturer.

Tips from the survey

A successful ERP implementation requires good preparation. The following conclusions about this can be drawn from Aberdeen's research:

1. Develop a clear plan: A well-thought-out plan helps identify specific needs and set clear selection criteria. This plan serves as a road map during the selection and implementation process.
2. Prioritize Functionality and Usability over Cost: While cost is an important factor, manufacturers should ensure that system functionality and usability are top priorities. A slightly higher investment in a well-functioning ERP solution is more beneficial in the long run than cutting back on a less suitable system.
3. Gather input from all levels within the organization: It is crucial to gather input from different departments and levels within the organization. Assembling a cross-functional team ensures that the ERP system meets the needs of all users.
4. Align your ERP with business goals and industry: Choose an ERP system that is specifically designed for the industry and aligned with business goals. It is easier to find the right solution when ERP is seen as a tool to achieve business goals.

For more detailed information and deeper analysis, check out Aberdeen's full report, "The Cost of Doing Nothing: Why You Can't Afford to Sit on an ERP Software Decision."