Manufacturers are continually warming up to the idea of cloud business applications. In fact, according to Gartner, 47% of manufacturers will have piloted or will be using cloud based applications rather than using on premise solutions. Why? Because there are significant advantages in utilizing cloud technology for manufacturers, such as a lower TCO, faster implementation than premise solutions, 24/7 access, and many more. But recognizing those benefits means selecting the right solution. Below are 10 essential questions to ask when selecting cloud ERP for manufacturers.
What to Ask When Choosing Cloud ERP for Manufacturers
Will it support your processes?
Are you a make-to-order manufacturer, make-to-stock, or mixed-mode manufacturer? First a foremost your ERP solution should meet your processes requirements; something not every system will do. Make sure the system you choose supports your corporate initiatives as well, such as lean manufacturing or quality improvements.
Are modifications simple?
As it’s been said many times, no single ERP system in existence can meet every need of every business. While the solution you are looking at may have been designed for your industry and manufacturing type, there will surely be some things missing. Be sure your system has modern technology and the flexibility to allow for customization without complex tools or expensive changes to the source code. Look for a solution that has tools built in that users can access to modify the system. It is important to remember that some cloud ERP systems still run on older technology and may not offer these critical elements.
Related reading: 4 Factors That Impact Manufacturing ERP Selection
Does the system support global or mobile users?
One of the most common reasons to choose cloud ERP is to unify your entire company, regardless of geography. Be sure your mobile sales team, global supply chain, and local users are all supported.
Does the system meet the needs of the whole company?
Some cloud ERP systems will only benefit certain parts of your organization; look for a comprehensive solution that addresses the needs of your entire organization to reduce and eliminate separate applications. With a common database you will have control and visibility across the organization.
Does the solution have reporting and performance management tools?
A major purpose of ERP is to help you simplify the process of turning your raw ERP data into actionable information. Consider your needs for operational reporting, KPI tracking, performance analysis, and other tools to support real-time decision making and strategic planning.
Related reading: ERP Project Planning: Don’t Make These Two Common Mistakes
Does the vendor offer pricing protection?
Keeping costs to a minimum is another benefits cloud ERP, but the price can creep up if there is no protection in place. Be sure to ask about this important factor to ensure the price won’t dramatically increase when you renew your subscription.
Will the software be up and running when you need it?
If the vendor is hosting and managing the system for you, making sure they are hosting it properly is critical. You will want to ask them about where the system is hosted; is it a credible data center or is it out of a closet in their office? you will want to ask about security and privacy policies, compliance, and their service level commitment. System redundancies and data backup is another critical topic to cover; you will want it backed up and stored online in multiple locations and redundancies built in.
Related reading: What’s Trending in ERP for Midmarket Manufacturing Companies?
Do you have deployment options?
Many manufacturers find they only want certain aspects of their business in the cloud, or maybe you might want to bring things back on premise later on; you never know what’s going to happen 5-10 years from now. Make sure you have the freedom to choose cloud or premise with the option to change it when necessary. This means making sure you have the option between multi-tenancy, where the vendor is pretty much in charge of system related decisions, and single-tenancy, where you have more administrative control over things like upgrade schedules, security settings, etc.
What happens if you dump your vendor?
Some vendors will make it impossible for you to get your data back, store it in a way that makes it difficult to get back, or charge you termination fees. That’s why it’s always important ask about termination policies, data ownership, and associated costs so you know what to expect if you decide not to renew.
What is the vendor’s history?
Any company you enter into business with should be someone you can trust. Transparency is hugely important in the relationship with your ERP vendor and ERP partner. Make sure you know how long they have been around, how many customers they have, if they are profitable, etc.