How to Find the Best ERP Software for Your Business

Elizabeth Scolari
November 6, 2015

For growing wholesale distribution businesses, finding the right enterprise resource planning (ERP) system can be an incredibly arduous process. ERP vendors offer businesses a software platform to manage a wide variety of business functions, including warehousing, invoicing, payroll, and more, and on a field of varied, customizable options, choosing the right one for your business is no easy task. It doesn’t help that major vendors like Oracle, SAP, Sage, NetSuite, and others each offer a wide variety of ERP solutions to pick from. Making the right decision the first time is critical, however. ERPs often require a large initial investment, and you don’t want to lock yourself into a solution that doesn’t quite fit your needs or can’t be scaled later on if your needs change. Wholesale distributors should consider the following questions when selecting an ERP.

Finding the Best ERP for Your Business: Key Questions

1. What are the upfront and ongoing costs of the solution?

Not only must you think about the initial investment in the solution and the cost of implementation, ERP vendors also generate more sales and revenue by charging annual maintenance fees. After the first year of purchase, you will most likely expect to pay anywhere from 10% to 25% of the cost of the initial license, sometimes for services you don’t even need. Be sure you’re getting a clear understanding of the Total Cost of Ownership (TCO), which can include licensing fees, consulting fees, cost of integration with other systems, etc.

2. What type of support can you expect?

Consider the terms of service the ERP vendor provides when you have to submit an issue.  Many ERP providers use a help desk type of support system. A good ERP vendor’s support staff should be experienced to handle any issues that come in, have the ability to walk someone through an issue over the phone, and always be available during business hours.

3. What modules are included?

Be sure to understand exactly what tools you need, and what the ERP vendor offers––for instance, do their Financial Management modules include accounting, budgeting, cash flow management, and banking tools? Does the solution meet your needs for warehouse and inventory tracking?

4. Are you looking for a cloud or on-premise solution?

When searching for the best ERP solution for your wholesale distribution business, you should also consider if a cloud or on-premise solution is right for you. There are several factors to consider with each type and they each have their own pros and cons. On-premise solutions require a large up-front investment in both the software license and the infrastructure required to host it. You’ll also need an in-house IT staff to maintain the system. Cloud-based ERP solutions involve a lower up-front investment, as the software is hosted by the vendor and paid for in a subscription model. Maintenance and upgrades are also performed by the vendor. It’s possible to customize your on-premise software solution, but those customizations may make upgrades difficult. Cloud-based ERP solutions, on the other hand, are updated in the background so you don’t have to worry about having to reconfigure your system. In summary, your wholesale distribution business can benefit greatly with the right ERP solution.  If you are currently using SMB accounting software like Xero or Quickbooks, an ERP can give you more control and visibility over your operations and transactions. Do you have questions about choosing an ERP? Let us know in the comments below.