So many ERP vendors, which one suits my needs?

Enterprise Resource Planning sounds fancy and complicated. Well, fact is, it is really fancy and complicated, not to mention intimidating to some degree.

Imagine doing work with integrating all the processes of a company in one unified system with ERP. This is a daunting task of course. In a common ERP environment, the system data make processed by multiple components of computer hardware and software. And above all that, former stand alone applications such as Manufacturing, Supply Chain, Financials, Customer Relationship Management (CRM), Human Resources, Warehouse Management and Decision Support System are now integrated as modules in most of today's ERP implementations.

And for a company, the plan to acquire an ERP system does not end in translating business rules into one integrated and automated system. The price can give a company a serious thought. Most of today's ERP can reach more than six figures in price. Today's top ERP vendors, SAP, Oracle and Microsoft command ERP prices at such high prices although investing in an ERP really has long term benefits.

Before jumping into purchasing an ERP system from the vendor or you choice (there are many vendors other than SAP, Oracle and Microsoft; in fact there are less priced open source ERP system), it is important to note that different companies install ERP software in different processes. Knowing these implementation approaches may help you save money on your decision on how to implement an ERP system.

The first approach is laying out a grand plan for the ERP system. This means that all modules of an ERP system is installed across the company all at once. This approach was intended to reduce cost of integration but has been outdated already. Many companies today have experienced doing this approach in the past at such high failure rate in implementation.

The second approach is the modular implementation. This is done by installing ERP modules one at a time. For example, one functional department first is the limit of the scope of ERP implementation. Then another department with another module later. This approach is best for a company that has departments which do not share many common processes with other department or company divisions. This is the most commonly used implementation approach today where each department or business unit has its own instance of databases and ERP. This implementation approach reduces installation risks.

The last method is the process oriented ERP implementation. This approach is focused on initial customization of ERP functionality which is closely related to the intended business process. Then the implementation may of course grow to full blown ERP system depending on the trend of the business. Many small to medium size companies use this approach as they have less complex business processes internally and they have a big potential for growth.

So there you have it, if you are considering acquiring an ERP system, you know where you needs fit and you have the three approaches to choose from.