There are a number of factors that influence the purchasing decisions of Enterprise Resource Planning (ERP) software buyers. Software Advice, an independent research firm that analyses ERP solutions, recently released a comprehensive report to analyze the requirements of US buyers and better understand their decision-making process, in order to help guide other buyers in the market for an ERP solution.

Since purchasing and implementing ERP software can be an intensive process, the experiences and thoughts of others can help support those companies that are not sure where to begin.

It comes as no revelation that company growth is a big factor in implementing a new system, but there were some other interesting findings we thought we would share.

  • 66% of the prospective buyers surveyed do not currently have an ERP system in place, and 44% rely on a mishmash of disparate systems to execute ERP processes
  • 59% cite data integration as the top reason for purchasing new ERP software
  • Among buyers currently using ERP systems, 24% cite lack of support and 19% cite cost as their primary reasons for wanting to switch to a new system
  • 27% of buyers who do not currently use an ERP system cite company growth as their reason for wanting to implement one

It also seems true that a lot of companies are nervous about the work it takes to implement a new ERP system, and the possible of failure, which has been known to cripple even large corporations.

However such occurrences are rarely a failure of the system itself, but of unrealistic timelines, budgets or lack of testing and design by the buyer or vendor so it’s important to manage expectations up front and ensure the division of responsibility is clear from the outset.

It is equally important to ensure you implement a system that does not end up being too costly or complex for your needs. Cloud options and ‘Software-as-a-Service’ (SaaS) contracts are also expected to become increasingly prevalent trends, and such subscription pricing models have no doubt made ERP software more accessible than ever to smaller businesses.

Given the life cycle of an ERP system often 10 years or more it is wise for buyers to consider a system that can scale with company growth, even if a bigger initial investment is required, and weigh up the benefits and drawbacks of different pricing models.

The report’s ERP researcher, offered the following advice:

“There are more affordable offerings than ever for companies seeking to implement a new ERP system. While it might be more difficult for companies to see a clear return on investment in the short term, it’s important that they understand that implementing a scalable ERP system early on will save them many headaches down the road as their business grows.

“It’s also critical for companies to understand how much a properly implemented ERP system can cut down on inefficient processes, such as duplicate data entry between disparate applications. It’s those sort of things that might be difficult for businesses to quantify, until they realize just how much time and money would have gone down the drain had they continued with their old processes as they grew.”