How to Select ERP System for Wholesale & Retail businesses?
You are travelling in the scorching sun, desperately looking for a shade. After being on the road for a long time, you finally find one. Feels great, isn’t it? In the coldest of nights one winter, you are home and badly want to turn on the heater. But bam! There’s a power outage. You wait, and wait patiently, and when the electricity supply finally resumes, you quickly turn on the switch so that the heater can start working. Feel relieved?
What did the shade and the turning on of the switch do here? What does the monsoon rain bring for a farmer? What does reaching home and hitting the bed at night after an arduous day do to you? What does meditation do to a restless mind? The answer to all these questions is- they all bring a calming effect.
An enterprise resource planning (ERP) system has a similar effect on the businesses. Under its calming influence, businesses effectively deal with their challenges and thrive. This holds true for businesses across industries- especially wholesale & retail. The pace at which the retail industry works, and at which its trends change, can be maddening for the retailers.
The restive consumers demanding immediate access to the latest trends, greater flexibility in how they shop and pay, product innovation and quality, etc. only make things worse. That’s where an ERP system steps in for the retailers with its calming effect.
For the uninitiated, here’s what an ERP is, and what it can do for businesses. The scope of an ERP system is vast as it is designed for a wide range of industries with completely diverse needs. Hence, when we talk about selecting an ERP for wholesale and retail business, it should be particularly kept in mind that the solutions that are being considered are built for the industry and its needs. However, it is mostly easier said than done, as finding the perfect retail ERP software is often a daunting task with the retailers being spoiled for choice. So, to help the wholesale & retail businesses select the right ERP solution for their business, this blog acts as a step-by-step guide. Read on:
1. Analyze your requirements: First and foremost, you as a wholesale & retail business, need to analyze and clearly define your requirements for the prospective retail ERP software. For some, it could be the inventory management module. For some others, it could either be the customer relationship management (CRM) module, employee management, sales & analytics, loyalty & discount management, planning, pricing, integration with e-commerce, Point-of-Sale (POS), warehouse, returns & exchange management, vendor & purchase module, or simply all of them. Proper identification of your requirements will allow you to create the right shortlist of the vendors whose offerings focus on your needs. Hold internal meetings, document the requirements, and keep them on the table when you sit down to shortlist the potential vendors.
2. Create the vendor shortlist: As said before, finding the right ERP software for retail industry can be a taxing process. And that process begins from here, by shortlisting the right vendors. Once you have defined your requirements, all you now need is to screen the options in front of you against those requirements. Additionally, you can use different criteria to narrow down the shortlist to four to five vendors. Some such criteria factors can be features, functionalities, modules, ease-of-use, cost, etc.
3. Assemble the internal ERP project team: Forming the right ERP implementation project team is the next logical step. The ideal team composition should include one member from the senior management as the head of the project, a project manager to look after the entire project, an IT manager to act as the bridge between the organization and the ERP vendor, and representatives from different departments who can test the system. The members should be picked on their expertise to create scenarios, foresee future problems, ability to solve those problems, and take along everyone. By creating such a team, the organization not only can see through the ERP implementation project successfully, but can also effectively deal with change management issues.
4. Don’t judge a book by its cover: Don’t assume that just because a particular retail ERP software comes from the stable of a reputed ERP vendor, it is ought to be good, or has all the features that a retail business needs. See for yourself, and then decide. Ask for multiple demos if required, and make sure the vendor thoroughly covers all the retail ERP software modules, gives demo on actual working system with the same hardware configuration as yours, and same internet connection. Make notes while taking the demos.
5. Ask questions, and plenty of them: Ask as many questions you can to the vendor, and don’t leave any room for doubt. Questions related to the feature-set, online & offline accessibility, support to multichannel retail, types of hardware the system supports, total cost of ownership (TCO), vendors plan regarding data management, backup and recovery, approach towards security, etc. should be particularly asked. The more precise the vendor is with his answers, the clearer you become with respect to your choice.
6. Evaluate your choices: Based on the feedback from the demo sessions, evaluate your choices. Ask all the vendors who made the demonstrations to give at least two to three industry references. Evaluate them thoroughly on their industry & project management expertise, functional knowledge, past record on delivering the implementation on time and within the budget, etc., and then make the final choice.
7. Testing: Testing the system is one of the most important steps in selecting the right ERP software for retail industry. For determining the efficacy of the system, both static as well as dynamic data should be used during each test cycle. This will give an idea whether or not both permanent as well as changing information gets migrated to the system adequately. The internal project team should design scenarios, and test different ways of doing a particular task. The findings should be duly documented and queries, if any, should be raised with the vendor.
8. Training: Before the retail management ERP goes live, the organization should ensure that the internal project team is well-versed with it, because only then can the user team impart training to their respective departments’ employees so that they can do their jobs efficiently. Make sure the employees are not forced to rush-through the training. The more time they get for training, the better their chances of adapting to the system smoothly and using it optimally.
9. Support & services: Post-implementation support & services such as upgrades, training, IT support, technical support, knowledge support etc. are important factors while selecting the ERP software for retail industry. Make sure you don’t miss out on it while finalizing your retail ERP software.
10. Metrics to measure success: It is important to have a mechanism in place that monitors and compares how the business has fared post-implementation as against before the ERP implementation. The retail business should adopt the practices to measure the success of the ERP. Some ways of doing it can be measuring it on numbers, i.e. the revenue, key indicators such as production & delivery times, and other intangible parameters such as customer experience, brand reputation, and employee engagement.
Final thoughts: The key to a wholesale & retail business’ future success lies in how well the retail ERP software selection process is planned and in the choices that are made during the process. After reading the step-by-step process for selecting the retail management ERP in this blog, there should not be any doubt left in your mind with respect to the entire selection process.
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