Focus on the ERP solutions that target your company’s requirements.
ERP packages are tailored for organizations based on number of users and revenue volume as well as industry, processes utilized and number of sites. Initially qualify ERP candidates based on your organization structure:
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Mid-market solutions tend to have more sophisticated capabilities than small-business packages, and enterprise-grade packages are the most complex. It’s important to choose a solution that will support the various functions of your organization, such as accounting or inventory management.
Consider your current systems – what will it take to get your ERP software working with the rest of your systems, and how willing is the vendor to help you make it happen?
Know the vendor
This does not mean that you must have known the vendor before you started looking for the right software. It means that you should find out as much as you can about them. How successful have they actually been? Find actual quantitative and qualitative data that you can use to compare them to other vendors. Do not rely on the data they give you, because they may only report data that makes them look good.
Formal software demonstration should begin with the short-list of two or three packages. If there are three or more packages under consideration, it is best to reduce the list as early as possible.
Product demonstration
Insist on a thorough demonstration of the ERP solution. Many companies offer online demos of their products, but they don’t go deep enough. Meet with the vendor and get a thorough demonstration that allows you to experience the usability of each module of the solution. Include key associates from various departments to help evaluate how well the solution would potentially support business processes.
For each software solution vendor, plan one or two rounds of demonstrations (4-6 hours each) and one short wrap-up session; this should be enough time to complete the functionality evaluation and tie up loose ends. When going beyond this, the law of diminishing returns quickly sets in, and you are simply trading off issues associated with one package for those of another.
Making a decision for which ERP solution you’ll choose to support your business with should not be rushed. Typically, the ERP evaluation period falls between three to six months, but this can certainly vary based on the complexity of the business as well as the schedules of those involved.
For each software module / vendor, plan one or two rounds of demonstrations (4-6 hours each) and one short wrap-up session.
This should be enough time to complete the functionality evaluation and tie up loose ends. When going beyond this, the law of diminishing returns quickly sets in. In this case, you are simply trading off issues associated with one package for those of another. Typically, none of which has any bearing on the final choice or makes any package better. As a rule, an evaluation that takes more than five or six months is taking too long.
Create an equal forum for all vendors.
For a given round of demonstrations, the meeting place and delivery method (sales team on-site or remote) should be the same for each vendor. This is about leveling the playing field. For example, if one vendor performs a demo on-site and another does the same module remotely, who do you think has the opportunity to leave the best impression? This impression may have little to do with the software. Ensure that the same venue is utilized (on-site or remotely) for all vendors.
When one vendor uses your company’s “sample data” and the other does not, ask why?
All vendors understand that the use of your sample data for a demo makes their software seem “less foreign” and more understandable to the evaluation team. This has nothing to do with software capabilities, but will help your team to quickly understand the ERP functionality being demonstrated. Some vendors do not use your data because it takes too much time and prevents them from executing their well rehearsed “magic show”. Perfect data which is presented by a slick demo person will not help your team truly evaluate the solution and perceive how it will operate in their environment.
Educate the team on how to apply the package scoring method.
Most methods to evaluate software functionality include a scoring system that quantifies the extent the software addresses a particular business need. The team needs to understand how to apply the system to properly disposition what they see within the software and vendor responses to specific questions.
For example, when a vendor responds to one of your requirements with statements such as “minor software change”, “write a report”, “future release” or “I will get back with you” (and they don’t), score the item a zero (or close to it).
All too often, evaluation teams give the vendor more credit than deserved when the software does not address a business need out of the box. If there are work-arounds, your team must understand the nature and extent of these work-arounds in order to properly apply appropriate scoring.
Also, make sure the team understands it is part of their responsibility to seek clarification from the vendor when responses are unclear.
Conduct a team follow-up meeting immediately after each demonstration.
Allow time at the end of each demonstration for the team to discuss what they learned, reconcile differences, score the package, and document follow-up questions. Of course, this segment of the meeting does not include the vendor.
When this is not performed immediately following each demo, the team will be hard-pressed to remember what they saw. In addition, two people attending the same demo can walk away with very different perceptions. The best approach is to address these differences before everyone leaves the meeting.
Independently, each team member records the score for each requirement during the demo. Afterwards, individual scores are discussed and reconciled into a single team score for each requirement. When a consensus score is not possible, it becomes a follow-up item.
Other Things to Consider
Plan for the Future – Choose an ERP solution that can grow with your company. Consider not only the features you need now, but the features you may need six months or a year from now. ERP is a long-term investment. You need a solution that is flexible enough to accommodate evolving business processes and new initiatives in your organization and is scalable enough to include additional users. You should also be able to phase in new ERP functionality as you need it.
When speaking of growth, consider eCommerce, marketing and top-line revenue. Many companies focus so heavily on the bottom line, process improvement and cost savings – they overlook dedicated bandwidth to growth.
Don’t forget upgrades – be sure the ERP system saves customizations as metadata and automatically carries those forward when a new release is available. Upgrading to new versions with added functionally should be painless, don’t settle for less.
Selection bias – it is not unusual that an individual on the selection team will have used a particular package in the past. While that feedback (good or bad) is valuable, be sure to weigh the merits of other systems based on the needs of the company evaluating, and not on the convenience of that individual’s familiarity with the system.
Professional Services – A serious consideration in the selection process is the vendor’s implementation team or “Professional Services Organization”. Find out about their track record, references and project methodology. A significant reason that some ERP implementations have been considered a failure is not for the system, but for poor implementation, lack of internal adoption, or improper selection methods. It is estimated that up to 90% of enterprise system implementations are late or over budget.
When Selecting ERP, Questions to ask:
- How can we make our people more productive?
- How can we improve our company’s competitiveness?
- Does this ERP system offer industry-specific capabilities to support the best practices and regulations of my industry?
- Can this ERP system communicate with all the disparate data sources in my extended supply chain?
- Does it run on a platform that’s compatible with the platforms we’re already using?
- Does this ERP system offer industry-specific capabilities to support the best practices and regulations of my industry?
