5 Key considerations for manufacturers when selecting a third-party application to use with your ERP system

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From time to time, manufacturers will need to augment or supplement their ERP solution in specific business processes with a third-party application. Gartner has coined a term for it, calling it Composable ERP. Because of this, most ERP vendors will have an Independent Software Vendor (ISV) Program to help provide customers with the selection process.

With these programs provided by the ERP vendor, there can be hundreds of these applications to choose from. Selecting the right Independent Software Provider is no small matter – choose the wrong partner and you may not meet key business imperatives or may end up with expensive shelf ware. Choose the right one, and you will have solutions that enable or enhance your company’s use of its ERP system, unlocking productivity and cost-effective ways of work. These five key considerations can guide your selection process when choosing an ISV.

First, verify whether your ERP vendor has a formal ISV program

If your ERP vendor has a formal program that they administer and maintain, they will have a directory of verified independent third parties.

As a first step, confirm how the vendor program works. Do ISV’s that are listed go through a vetting process or can any solution join? Is there a certification and does the ERP provider give you a level of trust that the ISV application does what it says it will do – but more importantly, that the ISV can deliver the solution? Investigate those applications that are in that program by looking through the directory of ISVs on your ERP vendor’s website to see if any of the listed providers meet your requirements and needs. Finding a verified ISV will likely make your due diligence process simpler and more streamlined.

What functionality do you need from your ISV?

Think critically about what you are looking for from a third-party provider. How closely aligned is not only the application, but the ISV, to your company’s needs? Are you looking for a specific solution to augment your ERP system’, or if you’re cost-conscious, what are your parameters? How much functionality do you really need?

Just as you would have done when selecting your ERP, it’s recommended to develop a Request for Proposal (RFP), or at a minimum, a requirements document about the functionality you need, and what your goals are for this application. It’s important to take the time defining what you need from the application, rather than risk overpaying for something that could become shelf ware.

Make sure that your requirements are not just function-rich, but that they also consider the vendor itself. How long has the vendor been in business, and what is their employee size?  How many customers do they have? Do they have a reseller program or not? Do they have a proper roadmap, are they building out functionality, and are they investing back into the product? It is easy to overlook these requirements, but it’s important to understand their provenance and background and whether this will be a sustainable long-term partnership.

Now, verify the integration work

It is important to verify whether the integration is already in place, and if not, who will be responsible for that process. Keep in mind that many reputable ERP vendors will insist on a certified integration from their ISV in order to be a part of their formal program. This is something you need to know before committing to any ISV.

Look for references and recommendations

References are important, yet many companies overlook them when considering third-party applications. Reach out to the ERP community. Speak to employees, resellers, and other customers who you might know, to get recommendations from them. Even if they’re a part of the program, their recommendation could be valuable and offer insight. Your intended ISV can likely offer references for you, but there is value to connecting with the community of resellers and customers to ask questions about what they’ve used, their experiences, and what they would recommend.

Is your intended ISV part of your ERP vendor’s ecosystem?

Even within an ERP vendor’s ISV program, there are different levels of partnership. How closely aligned is your ISV with your ERP vendor? Do they engage in marketing collaborations and attend marketing events that the ERP vendor hosts, for example customer roadshows? Do they undertake co-selling with the ERP vendor? Being involved in the ERP vendor’s ecosystem hints at whether the ISV will deliver a valuable product that enables or enhances the ERP platform services. Make sure that they’re part of your ERP vendor’s ecosystem and investigate how closely aligned they are with the ERP solution.

By following these steps, you are increasing the likelihood of identifying the ISV that will enable your business to customize and adapt your ERP solution to your business’s exact needs.

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