When seeking out an enterprise software application to serve as the foundation for running your business, there is no such thing as a stupid question. Finding the right software, and the right provider for your cloud ERP systems is imperative, especially for government contractors.

Government contractors cover a wide range of industry expertise. However, all government contractors have two things in common, a high level of oversight and security concerns. As you begin searching for the best provider with the solution that meets your business’ requirements, your questions and their answers will lead you to the right choice.

Here are 5 key areas to evaluate during the software selection process:

1 – Security and Risk – Defense contractors routinely process, store and transmit sensitive federal information to assist federal agencies in carrying out their core missions and business operations. Cyber-attacks are on the rise, and the federal government wants to be sure that any classified and/or unclassified data is secure. The latest DCAA requirement NIST SP 800-171 is in full force and effect, and it’s important that the vendor you work with understands this and is prepared as well.   Will users be able to access only approved areas and functionality within the software? Does the software help us meet our compliance requirements? Is an audit trail of user activity created? What security protocols are in place to protect data? Is data backup frequent and easily accomplished?  All questions to look into when evaluating solutions.

2 – Functionality Over Price – Investing in an ERP system should be a long-term decision. When you implement an ERP system, you set the groundwork for how your business will operate and setup your teams for success with process automation and efficiency. The quality of the application, and the features and functionality within it, are critical to your success.  Does it offer project accounting?  Is there subcontracts management?  Does it have integrated procurement functionality?  What business intelligence capabilities are available?  There isn’t likely a magic bullet that fits every detail you need, but it’s important to find something that fulfills most of your needs. According to a recent article by Gabriel Gheorghiu in G2Crowd, “As the number of buyers replacing old and legacy systems declines, we expect the importance of functionality in ERP selection to increase to 75% from 48%. Of the 47.5% of buyers who switched ERP for reasons other than price and functionality, we expect that half will focus on features.”

3 – Compliance – Meeting federal government compliance regulations as defined in the Defense Contract Audit Agency’s CAS (Cost Accounting Standards) and FAR (Federal Acquisition Regulation is critical in order to pass DCAA audits and win contracts with the government. Does the software have the capabilities required to properly segregate direct and indirect costs?  Does it perform cost collection by pool and calculation and allocation of indirect costs by provisional, target, and/or actual burden rates?  Does it allow for the identification of unallowable costs?  Does the timesheet system allow employees to charge time against approved projects on a daily basis?  The software package alone cannot guarantee compliance, but it’s important to make sure that it will facilitate the requirements of a DCAA audit.

4 – Implementation – What is the implementation timeline? How long does it take? Who will handle the implementation? What are their qualifications? What is the protocol if implementation runs longer than expected? Who is responsible if there are implementation problems? What training is included in the proposal? What is the timeline for employees to become skilled in using the software? What specific training resources are available? Videos? Webinars? Classroom sessions? Is the documentation complete and user-friendly?  Lots of questions to ask here before heading down a path that has many points of failure but loads of potential for success.

5 – Reputation and References – As Software Advice puts it, “One critical remaining task is to verify that the software company and its product are what they have claimed to be.” What do the customers say about the application? One of the most effective ways to know whether a software solution can get the job done is to ask users directly about their experience.  Some software vendor names may be recognizable in an industry, but it doesn’t necessarily mean they have the best solution.  Technology can shift quickly, and solutions are available now that may not have been 5-10 years ago.  Be sure to connect with references in the industry, with similar requirements to yours.

IT investments have become the largest category of business expenses in the last decade, and enterprise system software, a multi-billion dollar industry, absorbs a large chunk of that IT budget. Cloud ERP solutions allow businesses, especially those with government contracts, to choose the deployment option that fits their specific needs.

Originally published and posted by Jamis.