If your company is in the market for an ERP platform, you have probably heard the horror stories: companies making the wrong ERP selection, struggling with implementing it, and finally giving up trying.
We are here to tell you that it doesn’t have to be that way. In this article we will evaluate the most important reasons to hire an ERP Selection Consultant.
ERP projects are complex
Let’s look at an analogy of building an extra room onto your house. You may have enough understanding and experience with fix-it projects where it seems like you should be able to do such a project. But the average do-it-yourselfer is virtually guaranteed to fail because the scope of such a project is so immense — and they often end up searching for a professional to complete the job.
ERP software is much more complex than a room addition, because you’re trying to automate the complex business processes of an entire organization.
Before we discuss the benefits of hiring an ERP consultant, there are a few scenarios where it does not make sense to hire one:
- When the system or applications you are considering are not very complex, such as entry-level platforms
- When you have an in-house resource who knows what they are doing — but note that this should be someone who has been through the software selection process before
- When you have an exceptionally limited group of software vendors from which to select — where it’s either product A or product B, for instance
In any of these cases, a good ERP selection consultant should tell you, “You don’t need me for this.”
However, the more usual scenario you are confronted with is the need to automate a lot of different complex business processes, and you don’t have people who have been through an ERP selection before.
Coupled with that, the offerings in the software market are genuinely complex to sort through. If this is what you are facing and you do not have an ERP selection consultant on board, you are looking at almost certain failure.
Enterprise software is complex because it's trying to automate many vital aspects of a business:
- Procure to Pay
- Order to Cash
- Record to Report
- Production and Planning
- Resource Planning
Then there is the matter of the Sales Department and getting a lead tracking system set up. You also have to get buy-in from all concerned stakeholders … and you come to a striking realization:
“I can't get this wrong!”
What size of business should consider hiring an ERP selection consultant?
If your business is in the $10 million range, you probably do not need to hire a consultant. But when your business starts getting into the $20 million or higher range, especially $50 million and above, you definitely should hire an ERP selection consultant.
Businesses of this size tend to experience rapid growth — and if they're growing, that means everyone in the organization, especially the managers and executives, are busy. Where they are already working 50 hours a week, you aren’t going to assign an ERP selection project to one of them. The resource constraints in your company will usually drive the need for finding an ERP software selection consultant.
No matter how you look at it, there will always be an investment of time from a company’s internal resources in any ERP selection project. But by letting those people work on the things they have to do, you can outsource everything else.
Do certain industries need an ERP selection consultant more than others?
In our experience, the differences between industries are not as significant as the unique needs and requirements of individual organizations. ERP selection must be approached on a case-by-case basis.
Ultimately, the decision to hire an ERP consultant will come down to a senior executive who knows their people, their capabilities, and their availability. This person may arrive at the conclusion, “You know what? We just can't do this on our own, and I'm willing to hire somebody to help us.”
Our ERP consultants help CFOs and other senior executives understand how their unique requirements fit into off-the-shelf applications for their industry.
I still think I can do it myself. How much experience do I need?
This depends on the type of enterprise software you’re selecting. For example, let’s say you need to pick a general ledger accounting system, and there are only a few people in Accounting. A controller who understands the needs of the business should be able to a decent job of selecting an adequate platform — but realize that in this example, the stakes are relatively low.
The owner of a larger business, on the other hand, has an organization-wide view that extends beyond Accounting. Perhaps the selection person doesn't know that the company is going to acquire another business, or doesn't know that the owner wants to grow the business by a factor of 10. It is up to the owner to evaluate what is coming and see if there is any other kind of information that the selection person might not know.
It will require an average of 10 to 15 hours a week of an internal person’s time to work through the ERP selection process, and they will have to have the experience that comes with involvement in complex software selection processes. They also will have to face the reality that those extra 15 hours will be above and beyond what they are already responsible for on their job — and not everyone will want to sacrifice family dinners or put in extra time in order to take on an additional project.
Such a person will also have to consider the greater good for the organization, without taking sides with one department or another. They will have to be able to decipher what the vendor is telling them and sort through technical jargon to find out what really matters.
If you don’t have someone that can do all these functions, don't give them the selection project. They will inevitably pick the wrong software. Hire a professional ERP selection consultant.