Enterprise Resource Planning (ERP) is a software application that helps retailers, manufacturers, companies, and C-suite professionals bring automation to operations, and workflows and improve performance (in terms of speed, output, and cost-efficiency). ERP systems handle almost every aspect of a business. For retailers, it offers a complete set of software solutions to handle daily operations from billing to inventory management, for the manufacturers, it offers features to take care of operational activities like production monitoring to supply chain monitoring, and for managers, it is like a helpmate that provides insights, reports, and analytics to ease decision-making.

ERP systems have become a necessity to beat competition, and price dynamics and eliminate the time spent on repetitive activities. It is impractical for a large retail or manufacturing company to keep track of every task smoothly. Deploying modern ERP software is the help that they need. However, as the market is full of ERP solutions and providers that market their products as the best, it is a challenge in itself to select and implement quality ERP software for your business. But don’t worry! As the leading provider of ERP software solutions to manufacturing and retail clients, we can help you understand how the whole ERP selection process works and what you should know before investing.

This article is an ultimate guide for businesses to select the best ERP software by considering key factors that help in reaching the decision.

Most Implemented ERP Software Types: 

Note: Before you make a selection decision or understand the most implemented ERP software types, understand the types of ERP software. Check our article on the same by clicking the given link.

ERP systems bring together all the separate systems of businesses such as CRM, supply chain management, inventory management, warehouse management, POS system, etc. into one and provide complete visibility of the businesses. ERP software is essential in streamlining the operations and processes of organizations. The need for ERP software has increased in India because its market is projected to witness revenue growth and will reach US $ 0.82 billion by 2025 (Source). Also, why will businesses refrain from implementing software that can increase their productivity as reported by 78% of organizations? Businesses using best ERP software can increase productivity and profitability, and reduce production and distribution times.

This growth enhanced the demand for ERP and the focus of businesses on deploying this software to manage all their business operations. Generally, ERP systems have four main types, which are discussed as follows.

Cloud-based ERP

Cloud-based ERP systems run on servers owned by other companies. Businesses can access them online if they pay for the service. This approach has become more common because it needs less cost to start, needs less work to keep ERPs running, and lets businesses use it from anywhere. (yes, you can access ERPs from mobile too). For instance, cloud-based ERP software such as VasyERP can be accessed on mobile phones too.

Here, we would like to discuss a new line of ERP systems that are not only cloud-based but also industry-specific. Industry-specific ERPs are tailored for specific industries. These ERPs meet the unique requirements of particular sectors by providing specialized features and workflows akin to those industries. Industry-specific ERP includes ERP systems for almost every industry such as Garment & Apparel Industry ERP, Steel Manufacturing ERP, FMCG ERP, Footwear ERP, etc. The industry-specific ERPs are built keeping in mind their key functions, compliance requirements, production processes, inventory methods, and insight requirements.

On-premise ERP

On-premise ERP systems run on the computers and servers of a company. This old-school approach gives businesses the highest control over their data and lets them customize as they see fit. However, you will need IT guys to maintain these types of ERPs and yes, they come with an increased price, high investment, and constant upkeep requirements. Businesses often pick on-premise solutions when they have specific worries about data safety, or work in fields with strict compliance –the healthcare industry, defense industry, etc.

Hybrid ERP

Hybrid ERP systems include both on-premise and cloud-based elements, giving companies the option to switch between models or add features to their current systems. This setup provides both on-premise and cloud options. Its adaptability lets businesses move from on-premise to cloud setups, or keep a mix that fits their needs.

Many Indian companies go for hybrid solutions when they want to keep some key functions in-house while tapping into cloud perks for other parts of their business.

Need to Modernize ERP Software (From 1.0 to 2.0)

ERP 1.0 systems have been the core of company operations for years. These systems have given businesses a lot of power to manage processes, shape customer experiences, and ease their burdens. Without ERPs, businesses would be stuck in repetitive tasks that would have left no room for core activities. However, as time changes, requirements do. As we move further into the digital age marked by high-tech upheavals and advanced solutions, we are seeing more and more limits of these old systems.

Legacy 1.0 ERPs are now outdated. They no longer provide viable options for modern business workflows. Even retailers prefer smart features that ERP 1.0 (the old generation of ERPs) cannot provide. This means it is the right time to update your ERP. The rise of new ERP systems like VasyERP marks a big step in handling business issues in this digital world.

Here is a look at why modernizing your ERP with ERP 2.0 solutions isn’t just productive, but crucial to compete in the environment:

ERP 2.0 is Quick to Setup and Deploy

ERP 1.0 setups were known to take forever, sometimes dragging on for months or even years. Modern ERP systems or ERP 2.0 minimize downtime and enhance productivity as they use cloud technology. Cloud-based ERP solutions allow quick setup, cutting the time from start to finish. This quick timeline keeps your business running during the switch (new implementation or replacement of old with new ERP).
Furthermore, cloud setup gets rid of the need for big on-site hardware systems that lower upfront costs and IT needs. Clouds can just use basic features and also add more as per the needs and expansion of the business.

ERP 2.0 is More Agile and Flexible than ERP 1.0

The business world has become harder to predict than ever before. The reason is the changing market conditions because of the factors like shifting global economy, new technology, and unexpected events (such as the pandemic, wars, supply chain disruptions, sanctions, import-export bans, tax changes, etc). These changes, particularly the tax or compliance change will require quick implementation. ERP 1.0 systems have slow update processes that cannot keep up with these changes.

Whether companies are switching to a new business plan, moving into a new market, or handling a supply chain problem, a modern ERP gives the tools and adaptability to manage change well.

New ERP options, particularly the cloud ERPs are built to be quickly updated. They offer frameworks and setups that are made for easy uploading of regular updates, security patches, and other feature enhancements.

Take Better and Faster Decisions with ERP 2.0

ERP 1.0 often creates data silos making it hard to see the big picture of a business and get useful insights. ERP 2.0 solutions break down these silos. This helps teams work together and make smarter decisions across the departments. These systems provide smart tools for analysis and develop reports that turn raw data into clear action steps.

Features of ERP 2.0 help people share information and work together across departments. By offering a centralized database and robust analysis tools, ERP 2.0 platforms allow everyone from managers to staff to access data in real-time for analysis. This results in better-informed plans, enhanced productivity, and improved company results.

Bring Digital Transformation with ERP 2.0

Digital onboarding or digital transformation is highly crucial for businesses to beat quick commerce competition, and manufacturers need this to keep them agile. Modern ERP systems help companies use cutting-edge technologies –like connecting with AI and ML to predict trends or ERPs with IoT integrations.

Blockchain technology within new ERP software keeps business deals safe and clear. Modern ERP has better CRM tools to build stronger ties with customers. These new tools also help businesses give their customers better products and services. For example, factories & manufacturing units can fix machines before they break down by implementing ERPs with predictive analytics capabilities.

Key Differentiators of Modern ERP Software

When considering the modernization of ERP, consider the key features described below:

1. Seamless Features & Integrations

Modern ERP solutions provide smooth integration at its core making sure different manufacturing and retail processes work well together. It offers tools to manage production, materials, and vendors helping manufacturers to improve workflows, and handle suppliers. For instance, Bills of Materials keep track of raw materials, while warehouse management helps store and find goods. ERPs also come with seamless integrations like payments, accounting, CRM, third-party platforms, etc.

Features for managing purchases and sales make transactions smoother and improve teamwork with suppliers and customers. The management and procurement ensure raw materials are sourced on time, while sales consolidation brings together data from different channels to analyze.

2. Integrated Cloud Technology

ERP 2.0 uses new cloud technology to give manufacturers a complete ERP package. Cloud systems let businesses check key information from anywhere. It has features like GST accounting, HR management, and finance tools that can be accessed from anywhere and anytime. The integrated cloud system keeps data safe and helps teamwork smoothly. This lets manufacturers go digital-first and keep up in today’s fast-changing market.

3. Real-Time Insights & Updates

Real-time insights and updates are a key differentiator of ERP 2.0 solutions like VasyERP. Real-time insights, updates, and alerts play a key role in keeping business operations quick to respond. For instance, modern ERP systems track inventory and give instant insights into stock levels. This helps manage inventory well and stop disruptions. Reports on stock transactions and quality control let companies spot bottlenecks or defects in real time. Reports on sales and dispatch provide current information about customer orders. Reports on suppliers and vendors keep supply chains uninterrupted by showing real-time details on buying and how well vendors perform.

4. End-to-end Visibility of Complete Business Operations

Visibility plays a key role in ERP solutions helping manufacturers and retailers take control of procurement, production, and distribution from start to finish. This means that businesses must be able to see their all data on customers, vendors, production, inventory, sales, accounting, e-commerce, and even logistics in a centralized place.

5. Advanced Capabilities

New ERP systems provide top-notch tools that help businesses use new technology to boost output. Automating processes cuts down on hands-on work, which means fewer mistakes and better efficiency. For instance, barcode generation, smart trolleys, self-checkouts, and image-based billings are advanced capabilities that come with advanced ERP solutions only.

ERP Software Selection Criteria: Step-by-Step Process

How to Select the Best ERP Software for Your Business?

Selecting the right Enterprise Resource Planning software plays a key role in its ultimate benefit realization. Sub-standard or low-quality ERPs can actually cause more harm, and confusion and slow down existing workflows. Therefore, a good amount of time must be spent on evaluating ERPs and requirements before putting money into it.

The 8 major ERP Software selection Criteria are discussed below:

1. Requirements of Business

Analyzing the needs of the company creates the foundation for ERP selection. This requires a full review of current methods, challenges, and aims. The business requirements can be analyzed by taking input from team members across different departments to understand their specific wants. The team effort helps ensure that the selected ERP system matches the day-to-day needs and long-term plans of the company.

2. Functional Needs

Understand the specific features of the ERP system to make sure they meet your business needs. This includes features for finance, HR, supply chain, customer relations, and more. A system with specific features and fulfilling the requirements of the relevant business industry can boost productivity and make operations run smoother. Go for customized ERPs if you need specific features, modules, and add-ons.

3. Integration Abilities

A good ERP system must have the capability to work well with the software and technology your company already uses. This ability is essential to keep data accurate and make workflow better between departments. Check if the ERP fits with your current systems and can adapt to new technology in the future. Also, check if the ERP is flexible enough for future integration needs.

4. Resources and Budget

Finances and resources play a big part in choosing a Best ERP software. You need to set a clear budget that covers not just the upfront cost, but also what you will spend to implement it, train people, keep it running, and adjust it if needed. Also, think about what resources like time and people required for the setup.

5. Future Scalability

As your company grows, your ERP system should grow with it. Understand the ability of the ERP system to handle more transactions, more users, and new features. An ERP system that can scale up ensures it will stay useful as your business needs change over time.

6. ROI and Cost of Ownership

Analyzing the return on investment (ROI) as well as the total cost of ownership (TCO) plays a crucial role in smart decision-making. Companies must estimate the benefits of the ERP system to assess ROI. The key benefits are boosting productivity, reducing mistakes, and improving decision-making abilities. TCO includes all the expenses related to the ERP system throughout its life, including putting it into action, running it, and keeping it maintained.

7. Maintenance and Support

Cloud ERP systems handle updates and problems that facilitate maintenance within a company. This minimizes the burdens of the IT department as they have to handle a few tasks. This makes sure that the system is up to date always with the latest and most efficient features.

8. Security and Compliance

ERP systems have to use features like data encryption, base access, and multi-factor authentication to secure information. It must follow rules of data regulations, data privacy laws, and cyber security features.

Conclusion

To wrap up, modernizing your ERP system is a critical step in staying competitive for retailers and manufacturers. Modern best ERP software like VasyERP offer a robust, flexible, and future-proof solution. These systems address the limitations of traditional ERP systems while providing a platform for innovation and growth. By selecting VasyERP, you are not just selecting an ERP system; you are collaborating with a leader in cloud-based business solutions.

Take a step towards transforming your business operations and bringing agility, and productivity with VasyERP.