What Is an ERP Feasibility Study?
Will ERP help us manage our inventory? Do we have the resources to invest in enterprise software? Is it necessary for business growth? Bottom line: Should we implement ERP?
Your best guesses and hunches aren’t enough to answer these questions. ERP software, after all, is designed to serve as the core of your enterprise processes and data. The last thing you want is to regret your software investment. That’s why it’s important to conduct an ERP feasibility study to determine if a software implementation is the best course of action for your business. This study analyzes whether your organization needs the new software and is capable of executing the project.
Before getting started on your implementation, take a step back to figure out if your company can make the software project a success. Below, we detail the requirements and benefits of performing an ERP feasibility study.
What Does an ERP Feasibility Study Determine?
What’s actually involved in an ERP feasibility study? What does it mean to be equipped for an ERP implementation? ERP readiness involves multiple factors that all need to be taken into account before you start your project:
- Needs Assessment: Before finding out if you can execute a software implementation, you should determine if it’s even necessary. Analyze current business processes and consider company objectives. Are there any inefficiencies or errors holding your enterprise back? Does your organization have the right tools to pursue future business goals? Could an ERP system solve your current pain points and get you set for growth? Research ERP capabilities to see if the software is the best approach to optimizing your business performance.
- Resources Assessment: An ERP implementation entails investment in both time and money. Do you have personnel who can dedicate time to fulfill the functional and technical requirements of your software project? Can you hire a third-party consultant to manage the project? Are your stakeholders and executives willing to fund the implementation? Most importantly, will this work even be worth it? Calculate the potential ROI to determine if your software will drive long-term value.
- Technical Assessment: The next step is figuring out the equipment and technical requirements for completing your ERP implementation. Will you host your software in the cloud or on-premises? Is your project team able to perform necessary testing or development? Will the new software be able to work well with your existing systems and support your workload? Even if you lack internal technical experts, you can work with outside consultants to understand technical needs.
- Company Culture Assessment: The greatest barrier to ERP success is often user adoption. Can you convince users of the value of the software? Can you provide the necessary training and communication to encourage user adoption? How will the software impact processes, skills requirements and your employees’ day-to-day tasks? Figure out how users will respond to the new software and how much time your organization is willing to put into change management.
Once these assessments have been completed and presented to decision makers, your organization will know whether or not to proceed with the ERP implementation.
What Are the Benefits of an ERP Feasibility Study?
An ERP feasibility study isn’t a solo project. Decision makers throughout your organization are involved to make the task manageable and effective. Undergoing a comprehensive, collaborative feasibility study results in the following benefits:
- Make an Informed Decision: The biggest advantage of a feasibility study is that it allows your company to make an informed decision. Rather than make assumptions, your business can prove the value of an ERP solution through an organized methodology and realize what it takes to successfully execute the implementation.
- Mitigate Risk: Diving into a software project without understanding your requirements puts your business at risk of wasting your investment and frustrating end users. By assessing your organization, you can determine whether an ERP solution is necessary to improve processes and how it should fit into your business before rushing into the implementation.
- Gain Comprehensive Feedback: By involving multiple decision makers in the feasibility study, you can reach a conclusion from feedback across the enterprise. People with different areas of expertise can provide their take on the project and how it will affect their departments, so you aren’t leaving out critical points of view and considerations.
- Form Consensus: There’s a good chance that your organization isn’t on the same page about a new software system. Starting an ERP project with a divided business leads to widespread frustration. Through the process of conducting an ERP feasibility study, your company can develop a shared understanding about the software investment and how it could improve your business performance.
When your business works together to determine ERP feasibility, you can make a smart decision that elevates your enterprise.
Once you’ve thoroughly undergone an ERP feasibility study, you can rest assured that you’re on the right path to optimizing your business performance. But it’s not advised to take on this activity without some outside help. When organizations are ingrained in their daily processes, they sometimes struggle to get the full picture of their enterprise and detect areas in dire need of improvement.
Expert consultants provide ERP experience and industry expertise to help companies navigate software decisions. Datix, an Epicor Gold Partner, has enabled a variety of manufacturers and distributors to transform their business with software. Our certified consultants can serve as an extra pair of eyes to guide you throughout not only the ERP feasibility study but every stage of your software journey. From start to finish, we leverage best practices and years of project management to maximize the value of your software.
Considering an ERP implementation? Let Datix work with you to select the right solution and methodology to fuel business growth!