In this article, we will outline the entire ERP selection process, laying to rest unnecessary complications, antiquated data, and general misconceptions about these projects. It helps to break ERP Selection into 4 parts: understanding what an ERP is, what your real needs are, what vendors are really offering, and what it will take to implement a new ERP system.
Look across the whole business, at all the business processes, resources, and data; develop a plan for integrating and organizing all of that, and you have an ERP. Since 2000, these systems have also started to signify not only the operational aspects of the business, but also Sales and Marketing systems, like Salesforce, Pardot, and many others.
Why Is ERP a philosophical approach, not just a piece of software?
ERP in the most classical sense used to be one single system you bought. In the early 2000s, companies would buy Oracle, SAP, or JDEdwards and roll out that single business suite across the whole company. That’s not the way ERP is today. Although you can still approach these same companies for a business suite, you should also be aware of other potentially more valuable ways to design holistic business software.
Best-of-Breed
Best-of-breed applications today increase the value of mixing and matching vendors. You might buy a Customer Relationship Management (CRM) system like Salesforce for sales teams and a Human Capital Management system like Ultimate for employee lifecycle; you might buy Demandware for your eCommerce solution etc. There are so many of these systems out there driving real innovations within their particular specialization, that the best-of-breed approach to the ERP market has a lot of merit.
Hybrid
One step between best-of-breed and a single ERP is the hybrid model. In this scenario, you pair one main application like a good Financials-based ERP with one or two applications with rich functionality that users in that business area will appreciate. Best-of-breed solutions can really increase the automation of manual tasks while satisfying end users with the functionality they need.
ERP is essentially a foundation of software that accommodates the flow of data through your business processes.
In considering your ERP project, look at ERP as a philosophical approach.
Taking an objective approach to ERP allows you to be quite specific about the problems your organization faces in managing the business environment and achieving its strategy. The first action step to take is to understand the problems that software can alleviate.
This interviewing process should leave you two things. First, you will have an understanding of exactly the kind of tools your users need to overcome pain points and you will also start to build user buy-in. This ensures that when you do roll out the new solution, you have enlisted user buy-in and input which will lead to acceptance.
Most companies think that product demos convey exactly what vendors are offering, but this is not the case. Here’s how you can make 100% sure you walk away with a real understanding — not of what the product does, but what it will do for you.
Start by Telling the Vendor Your Requirements
You have a list of pain points, user buy-in, and a specific understanding of what the software will need to do to alleviate those pain points. Now, transcribe that work into bullet points, and show it to vendors. You want to ensure they hit each bullet point in their demos.
Make Sure Subject Matter Experts (SMEs) Attend Product Demos
SMEs are the best-equipped to understand whether the product will actually meet their needs or not. Provide them a scorecard with the requirements so that they can provide quantitative feedback on each capability. Give the scorecard to the vendors too.
Understand the How: Vendor Services
Vendors are not only offering software; they are offering services to put the software in place to match your business process. You need to understand their implementation fully before you can sign a deal with them. Understand:
Hold an Executive Sponsor Meeting and Review the Vendor’s Development Roadmap
Ideally, you want a key person from the software vendor to discuss the future development roadmap with executives. This is a critical meeting because it accomplishes a number of key objectives simultaneously.
Understand the Vendor Contract before You Sign
This topic might sound a bit deeper than the rest — because it is. There are so many components to these contracts to understand: discounts, renewal caps, payment terms, terms and conditions. You really need to know your way around these documents. Check out our guide to contract negotiations.
Select an implementation vendor that you would bet your job on — because you are.
Make Sure the Implementation Partner Offers Exactly What You Need
Ensure the tasks and budgets and statement of work, everything that is included in the ERP implementation contract will be exactly what you need.
Look at Internal Resource Requirements
The other side of training is internal. How will your employees train on the new software? Do they have the free time allotted for change? Who will manage the process? These last two pieces of advice work together as you understand your organization’s role in adoption.
Vendors know their applications, their solutions, and the problems they solve.
Be sure you know exactly what you need before approaching them, and you will impress your needs on them, not vice versa.
We hope these articles have helped you clarify and demystify the ERP Selection Process. If you are interested in speaking with an ERP Selection Consultant call us if you have any questions. We want to make sure you are heading in the right direction.