Three questions to ask potential distribution ERP vendors
You are a distributor and it is time to upgrade your old ERP system or, perhaps, get your first one. What should you be asking potential vendors?
1. How will it pay for itself?
A distribution ERP is an investment that has to provide a substantial return to make sense. You probably already have a sense of where your returns will come from and might have even prepared a formal ROI study for your executive management before even talking to a potential vendor. Ask the question anyway. There is a chance the vendor has seen other businesses earn some return in a way you have not thought of. Use their experience to your advantage.
Recommended reading: make sure you get the right product for your organization with our step-by-step guide to comparing distribution ERP software.
This question is also one that allows you to gain insight into the vendor’s background and experience. You want to hear stories and examples from your niche in distribution that demonstrate the vendor understands the business you are in and has even worked with some of your industry peers.
2. How can I use this distribution ERP for e-commerce?
Some distributors are primarily in the order fulfillment business. Others are completely B2B, business to business. Either way, eCommerce is important to distributors and you want to get insightful replies that lead you toward new, profitable markets. Fulfillment centers likely are already using some e-commerce system and probably several from different partners. How can you integrate all of these systems into your ERP?
Integration can be very expensive and this question can make the cost of your ERP jump dramatically from the suggested retail price you saw on the sticker. On the other hand, if the distribution ERP this vendor provides already uses web services to connect to other systems and they have experience with integration, the development is already complete and the process can be less costly and much faster. Regardless of what you distribute, you will want to be able to offer eCommerce when your customers ask for it.
3. How quickly can your software react to change?
Distribution businesses react to change every day – it is a fluid kind of business. Your distribution ERP vendor probably has already replied favorably to questions about how the ERP will work with your business as it is today. Now you want to know about how it will change as your business changes.
Think of some changes that might be on your horizon and maybe some blue-sky examples too. You want the adaptation to be simple. It might be using a field you don’t need to use today. It might be changing a setup parameter or two. You might find you need to buy another ERP module, which usually is simple. What you don’t want to hear is that change will mean some costly customization, or even that the ERP you are considering cannot work with a new kind of distribution.
There are many guides to questions for generic ERP vendors and these are a few examples more specific to distribution. Use them as examples and try to frame questions of your own that fit your business.
Featured white papers
Next generation IT: finding the right ERP landscape for global trade and logistics
The changing face of global trade and how it can effect your ERP requirements
Global supply chain management: ERP vs best-of-breed SCM
The pros and cons of an ERP-integrated SCM versus best-of-breed software
Three new technologies your distribution ERP must adapt to
Supply chains are rapidly evolving, so make sure your distribution ERP can adapt to these develop...