Have you realized you need a new ERP but are unsure of the best practices for moving the project forward? You are not alone. In an industry where 55% to 75% of ERP initiatives fail to meet their original business case goals, few project leads want to risk their reputations (and careers) to spearhead such a risky endeavor without guidance.
The first step is understanding what your goals are. Before going through an ERP selection, you must do the “legwork” to create a roadmap and desired outcomes for the process.
Independent ERP consultants like ERP Advisors Group specialize in bringing a systematic approach to this initial Needs Analysis phase. An experienced consultant can quickly evaluate the current state gaps and growth limiters, while providing a deep understanding of software solutions on the market today and how to build a realistic roadmap and budget. However, if you will be taking a “do it yourself” approach, here are the key steps:
Your business requirements will be the foundation for all enterprise software efforts. The most important first step is to identify and document current business pain points, as well as future goals.
Start by considering your company’s future strategy, and involve leadership in this conversation. What will your company look like in five years? Ten? How does that change the way you should utilize technology? This is an opportunity to improve operations in a way that enables your company to achieve broader business goals, rather than just replacing your software to maintain the status quo.
Next, interview Subject Matter Experts (SMEs) in each department of the business needing attention. These are the individuals using the system every day who feel the pain of inefficient processes and archaic solutions. They will provide valuable insight into where current applications are falling short during this phase of interviews.
Develop a system for tracking pain points and requirements, whether that be in a spreadsheet or a more formal document broken out by department. These needs will serve as a roadmap for the rest of the project.
Once you have gathered initial insights into the obstacles being faced by employees, the next step is to identify whether the pain points or inefficiencies are a result of people, culture, process, or technology. Sometimes, there are underlying issues not associated with your software that are better solved with training or process change.
It is important to differentiate between software-related issues and cultural issues because the last thing you want to do is pursue an ERP project that won’t solve the root of the problem.
Document the needs you identified as crucial during the first two steps. These needs will be leveraged as a checklist for evaluating and creating a shortlist of viable software vendors. If a vendor does not have the basic capabilities to meet the needs of your business, they should be excluded.
You should spend time on Google, ChatGPT, Reddit, and other community message boards to create a list of viable software vendors. This initial research won’t be set in stone, but it will uncover some of the best-fitting options to be considered during your search. Try to stick between 5 and 6 solutions so as not to overwhelm your project team or muddy the waters during selection.
With all key pieces in place, you can start making phone calls to your list of vendors. Your initial call may be with an entry-level salesperson who will act as a “yes man” for the vendor. This is not done with malicious intent, but due to a lack of experience. Therefore, it may take some time to make your way up to the product manager who has in-depth knowledge of the product and can truly answer all your questions.
You are not quite yet out of the research phase. These conversations will help you identify if certain vendors could be good fits for your industry and size. Although you will need to read between the lines, because most vendors will likely give you some version of “yes” to your questions and requests. Download our checklist, “Questions to Ask an ERP Vendor,” for your guide to the initial vendor vetting process.
Now this is where the process becomes more complicated. You have a general idea of where to start, but navigating software demonstrations and vendor sales pitches is anything but easy. In fact, this is where most businesses fail to effectively document demo findings and compare solutions, resulting in the wrong solution being selected and an overall failed project.
That is why so many businesses turn to independent software selection consultants to guide their ERP projects. Unbiased selection advisors, like ERP Advisors Group, have developed clear methodologies for needs assessment and software selection. They will shoulder the responsibility of preparing for and executing the project by applying experience from hundreds of clients over decades. For more information, download “Why Hire an ERP Selection Consultant.”
A Request for Information (RFI) document should provide vendors with an understanding of your business, high-level process flow, the key issues you are looking to solve, and your requirements for the new system.
When developing your RFI, there is a balance to strike between being specific enough that all of your requirements are addressed, while also not being so detailed that you are dictating exactly how the vendors should solve each requirement.
Additionally, an excessively long and tedious RFI can add time to the process and give the vendors headaches. At ERP Advisors Group, we keep it simple at this stage by only asking the vendor to check any boxes of functionality they CANNOT meet. This process helps dwindle the list quicker by process of elimination and makes a future decision much easier.
It often isn’t easy to gather your organization’s key stakeholders, and their time is valuable. Don’t waste it by bringing them to a pointless demo where they don’t get to see the features and functionality that are important to them. And don’t just assume the vendors will know what your team needs to see.
Discuss the demo content with the vendor beforehand. Ensure your most important or unique requirements are kept at the forefront and not overlooked in favor of whatever flashy bells and whistles the vendor wants to show off. Be sure to give the vendor enough time to prepare, as well. For certain demos, the vendor may be able to configure a sandbox environment specifically for the unique functionality you need, and possibly even use your own sample data set to make it as realistic as possible.
Create a system for evaluating vendor demos with a set scale. This empowers your team to document their opinions and compare vendors on an even playing field. Otherwise, participants may blend information together or forget entirely, making it difficult to properly compare products.
Identify what roles need to be filled during the ERP selection to ensure tasks are being completed and the right individuals are providing input on the solution. Significant effort goes into coordinating feedback, scheduling meetings, and ensuring selection-oriented tasks are complete, so it is essential to not only assign roles but also ensure those roles are understood.
The decision to gut your enterprise software and start fresh can be paralyzing, but you can overcome the fear of failure. By doing the work upfront to guide your software selection, you can help ensure you select the right solution now and that will support your business for many years to come. If you need help along the way, schedule a free consultation with one of our independent experts today!