Budgeting and Shortlisting Business Software Options – How to Choose Business Software part 2

As the cloud computing market continues to mature new options are available to businesses who, only a few years ago, were priced out of the enterprise resource planning market.  Smaller organizations and start-ups are no longer relegated to use QuickBooks as the default accounting solution. But now there are so many software options available in the cloud that shortlisting business software choices is hard enough, let alone narrowing it down to a single solution.

With that in mind, we created a blog series on how to choose business software to share some of the important steps that decision makers should take before settling on an ERP solution.  In our first installment we talked about matching business software to business needs, and today we are going to discuss budgeting and shortlisting business management software options.

Budgeting

The independent consultants at Lumenia Consulting identify 3 critical factors to consider when budgeting for business software like ERP: Technical budget, people budget and data budget.

Technical cost of the software is an important first item to check off your list. You will need to factor everything from licensing fees, new hardware and new operating systems to maintenance, support and hosting fees.  Your people budget should factor in educating and training training your staff, change management, project management and ongoing support from your reseller.  Your data budget will include the entire migration process from extraction to cleansing to entry into the new system.

“One of the criteria used for measuring ERP project implementation success is budget versus actual,” said Usula Browne at lumeniaconsulting.com.  “Achieving this goal starts before the project does, with the creation of a thorough and realistic budget.”

Here are ten steps to complete your ERP budget from a whitepaper by Collegiate Project Services.

1. Clearly define the budget scope and continuously communicate.
2. Define the cost components of the ERP implementation.
3. Identify primary software costs.
4. Identify third-party software needs.
5. Identify possible non-ERP related software needs.
6. Identify the costs of consultants.
7. Plan for an implementation “War Room.”
8. Plan for hardware equipment storage needs.
9. Do not underestimate miscellaneous costs.
10. Define your budget’s critical success factors.

Shortlisting Business Software Options

Once you have a working budget you should be able to eliminate a good chunk of potential vendors fairly quickly based on price tag alone. But you still need to narrow your focus to a very short list.

Infographic: Is cloud the right model for you?

Richard Barker at ERPfocus.com lists his top four considerations for creating your ERP shortlist.  He recommends you start with and informal list based on what you already know about ERP software options.  Then identify the people in your company that will be key players in the implementation process, and get their feedback before compiling your official first list.

Now that you have a long list, it is time to create an objective scoring document that lists your key requirements for the software and vendor.  Bring in your organizational leadership to determine the value of each requirement.  This will make it easier to compare products and partners based on a relatively unbiased score.  Step four is meeting the vendors.

Checkout the previous blog mentioned above on matching business software to business needs to learn more about evaluating your requirements.

At this point your short list should be down to your semi-finalists.  Now it’s time to separate the wheat from the chaff with the following questions.  Which packages best match your technical requirements?  Which are most flexible and scalable?  Does the software integrate with your third party systems like sales tax automation and manufacturing?  Does the reseller have a local site near you and experience in your industry?  Does the software have a reliable reputation in your industry?  These questions should help you narrow your shortlist down to three to five finalists.

Once you have your finalists it’s time to start trying out the software.  Best of breed software resellers will have on demand free trials of software.  This brings us to the topic for our next installment where we will talk about getting the most out of ERP software trials.

The ability to access a variety of free trial software in the cloud, including Microsoft Dynamics AX and other 3rd party solutions like manufacturing is an invaluable part of the software selection process..

About goERPcloud

goERPcloud is the first on-demand Microsoft Dynamics Cloud Marketplace that allows you to test drive different flavors of Microsoft Dynamics AX, GP, NAV and CRM with preconfigured 3rd party applications.  goERPcloud boasts a robust ecosystem of Microsoft Dynamics Partners, helping businesses find the cloud-based software solutions that best fit their current and future business needs.  Since 2000 RoseASP.com, the power behind goERPcloud, has provided hosted Microsoft Dynamics ERP and CRM applications to businesses around the world. For more information about goERPcloud, visit www.goERPcloud.com.

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