| May-07-2021

How to select an ERP? Eight Points to Consider

You are running a small or medium-sized business and are looking out for a new ERP. Great! But which one to buy? Here are eight key points which will help you select an ERP.

What is ERP Software? ERP or Enterprise Resource Planning software is an integrated business software consisting of a suite of applications designed to integrate and manage different business functions in a single system. These include accounts and finance, human resources, sales, inventory and manufacturing etc.

There are many ERP options available in the market today. So, selecting the right package for your organization can be quite an overwhelming task. Many companies feel that any software will work for them. And that their organization will simply adapt to the functionality of the software purchased and implemented. This thought process is flawed and is an important reason why many ERP implementations fail. A failed ERP implementation doesn’t necessarily mean that the ERP in question, was not up to the mark. A key reason could be that it might not have been the right solution for your organization.

An ERP should be able to transform the business and provide key competitive advantages to the company. Hence this decision should not be taken in haste or based on perception or with incomplete information. So, which ERP solution is going to be the best fit for your organization? In this article, we take a look at a few pointers on how to select an ERP. We are considering businesses primarily engaged in trading or manufacturing activity. However, many points are applicable to others also.

1. Integration of Different Processes

Any company, whether small or large, has various processes such as purchase, sales, inventory management, finance and accounting etc. All of them are interrelated and using multiple software for different departments is a nightmare at times. Having a single integrated system to manage all your processes and departments is of paramount importance. This enables you to get a 360-degree view of the business. More importantly, it boosts synergy and allows your team to work efficiently as they must seek and consume information from a single system. This puts an end to data duplication and consequently saves precious manhours.

2. Accounts and Finance Management

Managing accounts and finance are among the most important features of any ERP software. With their inbuilt automation capabilities, ERP software help companies manage their accounting and finance requirements efficiently and effortlessly. From billing to various accounting processes like accounts receivables and payables, cash flows, forex transactions etc., all can be easily managed. The ERP you choose should be able to handle all your existing processes with the provision to scale up over a period of time as you grow. Your ERP also should be in a position to assist you with accurate and timely information when required. This is a very important point to consider when thinking of how to select an ERP.

3. Purchase and Sales Processing

All ERPs help in improving efficiencies by streamlining your organization’s processes. From initial order management system right up to invoicing and payments and receipts. The correct ERP simplifies the procurement’s process of stock and other supplies with complete tracking capability. Purchase and sales processing is crucial to any business, thus the ERP software being flexible is of paramount importance. Every company has different processes and procedures. Processes may also change over time. Hence flexibility of the ERP to adapt to various scenarios is very important. Flexible ERPs are designed in a way that they mould themselves to the process. This allows you to follow the sales and purchase process in a way you wish to without altering your business model.

4. Effective Inventory Management

For companies involved in trading or manufacturing activities, effective inventory management is key for their success. Better inventory management shows better business results. Like cash flow, inventory management has a very significant impact on your business. Here an ERP plays a key role. Due to its automation in inventory management, an ERP software helps you identify and manage your optimum inventory levels. With inbuilt reporting, you can forecast stock movement and get useful insights on stock trends, item profitability etc. The ERP software you choose should provide timely and accurate information which aids in quick and effective decision making. This is another critical point to consider when thinking of how to select an ERP.

5. Cost Tracking and Analysis

Based on your ERP software, you can decide which department or project is more profitable and where you’re losing money. ERP software keeps track of all the expenses occurring over a period of time. This gives you a single screen view of what is going on in different places. The ERP you choose should be able to handle all your required scenarios and keep your expenditure within budgeted limits. It should also provide reports detailing variance if any.

6. Detailed Reporting

It is very essential that your ERP provides you with insightful business information like profitable products, fast-moving products, ageing of the stock, customer wise profitability etc. With robust reporting, you can take timely decisions on how to optimise costs at the right place. This reporting can take place only if all the relevant data is available in a single system and all departments and processes are well integrated. Generating such reports manually is at best a herculean task if not impossible at times due to the sheer amount of data crunching involved. A good ERP will take all data, analyse it and show it to the relevant user in an easily readable format. This is another important point to consider when thinking of how to select an ERP.

7. Access to Crucial Data Anywhere

In today’s world, companies require that important reports and trends should be available anywhere. The current COVID situation has only increased this need. Why should I have to be in the office all the while if I want to have access to my data? Ledger reports are most useful when you are in front of the relevant party; be it your customer or vendor. You need not wait for someone in the office to mail the reports to you. This to and fro coordination eats up valuable time. Most modern ERPs have powerful capabilities to give the user access to data at any remote location including on mobile without compromising on data security and privacy.

8. Security

Last, but not the least, you have to look at the security offered by the ERP. You don’t want everyone in the organisation to know everything. Why should a salesperson know the cost of production? Also, only a select few should have access to company reports such as balance sheet, profit and loss, trial balance etc. The ERP should have a robust user-level security setup restricting access to only authorized users for sensitive information. Likewise, you might not want to allow purchase department team members to pass sales entries and so on. You should have complete confidence that your data resides within your office premises only and there is no chance of leakage due to third party access.


In the above post, we have seen a few important points on how to select an ERP. You can also check out all the features available in Tally ERP 9 to find out if it fits into your business requirements.

Alternatively, you could contact us in case you require more information, or send us a message via WhatsApp by clicking here.

About the Author

Dilesh Jain – Xplore Systems, 3-star certified Tally Partner & a Tally enthusiast.
Phone: 86555 86333 | Email: | Website :

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