As outlined in our global research of 1300 global ERP implementations, enterprise software initiatives often take longer and cost more than expected, while failing to deliver expected business benefits. A common root cause of these challenges is force-fitting an ERP solution that is not a good fit for your organization. This presentation summarizes seven tips to ensure you select the right ERP software for your organization.
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ERP Vendor Selection
ERP Vendor Selection
The ERP Vendor Selection process can be challenging. It can also be frustrating or even humorous in some cases. Weeding through the morass of ERP Software Vendors is a task that hopefully only happens once every seven to ten years. Here are some tips to help make this process less painful.
Key ERP Vendor Selection tips
- Remember that the vendor is there for themselves. They may try to be your buddy, flower you with gifts, take you golfing, or whatever else it takes to close the sale. They want to build a relationship with you, so you will buy based on a feeling of gratitude towards them. If you do nothing else, keep the relationships with these vendors above board and strictly professional. We have seen clients being taken down a rosy path only to end up with that software, despite the fact that it wasn’t the best fit for them. There is a psychology to providing gifts and giving the client value up front. There is an underlying obligation or a feeling that the client owes them back. It is a very successful trick used during an ERP Vendor Selection by the salespeople, so you need to be on the lookout for this.
- Engage a consultant or service to help weed through the numerous potential vendors to get you to your shortlist. Too many times, managers and owners have taken a shot in the dark and found the first names they find on Google, or that those that they saw at a trade show. Do your due-diligence. Find a company who specializes in vendor matching or selection. One such ERP Vendor Selection company is SoftwareAdvice.com. They can provide a suitable fit for your company.
- In the ERP vendor selection process, drive the vendors down your path, not down theirs. If you let the vendor lead the processes, you will only end up at their solution. You need to strongly assert that you are driving the process and then follow this up with action such as pre-defined scripts for them to demonstrate and defined criteria for what they will show you such as references. If you lead the demo, they will either shine or fall apart depending upon how closely they match your business. If they shine, they were both prepared and understand your business. If they fall apart, then they probably are not a good fit. We have had vendors who get very upset at a level playing field. These are the vendors who are focused on themselves, not what you are asking for. If you prepare the vendors ahead of time with the ground rules, the things that they need to show and not show, then they should have no excuse for not tailoring their presentation to your requests.
- Find out what ERP Software others in your industry are using. Sometimes with specialized, niche industries such as process manufacturing, or semi-conductor manufacturing, generalized ERP systems do not handle the unique requirements of that industry. Talk to members of your industry association on what they use. Do the proper research on the ERP Vendors you might be looking at. Do not select software based on the opinion of a friend or what your relative is using at their facility. Doing so will get you in trouble, because likely the software isn’t fit for your industry. Even related industries may require different types of ERP software. Be careful here on taking well meaning advice from those you know.
- When negotiating with your primary candidate during your ERP Vendor Selection, never take the first or even the second offer. In fact, if you time your negotiations to the end of a month, quarter or even more ideal, the fiscal year end for that vendor, you will be able to negotiate great discounts. Every sale counts at the end of the period and often they will make a concession to book the deal in that period. Vendors often have more flexibility in the pricing that you might expect. Large vendors often will dig deep if it means beating out their rivals in a deal. But there is a threshold that they ultimately are unwilling to cross. You will need to trust your instincts that you have pushed them as far as they will go.
- When you are talking to the ERP Software Vendor, find out who will be implementing the software. Often it is a Value Added Reseller (VAR) who will be doing the implementation. This could be different than the VAR involved in your ERP Vendor Selection. If that is the case, shop the VARs and find one that you feel most comfortable with. Just because there is a VAR on the sale of the software, does not necessarily mean they are the best qualified to do the implementation. But if you are to do this, do this early. You probably want to identify the VAR to go forward with as soon as you have a short-list of Software Vendors. If you wait until you made the purchase, it is unfair to the VAR who helped to demonstrate the software and spent all the effort finding out about your business.
If you follow these simple tips during your ERP Vendor Selection, you will be a lot better off and find a solution that is better suited for your business and you will have a easier time implementing as well. Work with the ERP Vendors as a business partner, but keep the relationship professional and hold them to a level playing field. Doing so will only be to your benefit, especially when you choose the best software for your business.
ERP Vendor Selection Tools
There are several tools on the internet that are available to assist you in doing your ERP Vendor Selection. The tool we have found best is the ERP Vendor Selection wizard at SoftwareAdvice.com. It allows you to drill down based on your industry, software preferences, and revenue size to find the right fit for your business. Further, you can get pricing and schedule interviews right there on the same page. Very useful.
To help you in your ERP Vendor Selection, we have a free guide for you “How to Assess Accounting Software Vendors’ Viability” available for instant download. Download it now.
ERP Vendor Selection
Implementing ERP Systems begins with the Selection
Chris Shaul
There are two major parts to implementing an ERP system, the selection and the implementation. The selection of the correct software is key to implementation. Selecting the wrong software can kill an implementation or at least make the project very expensive and overrun the budget. Be careful when selecting a new system. There are basic steps to a system selection.
Systems selection entails first detailing your requirements. You can do this in a spreadsheet that is divided into various worksheets for each business function. Then identify the critical success factors that the system must meet in order to be successful. You will also want to document your basic business flow to get a product or service to the client. This should be from the initial contact to the client paying for the product or service. Once you have this criteria, then you can begin looking at software.
To find the best software, you can use google to search for the vertical market place of software that you belong to. For example, you can use the search “manufacturing erp†or “distribution erp†to find the candidate software systems.
Draw up a long list of about 10 vendors that sound like they have the modules and features that you are looking for. Then start calling these vendors and talk to them. You can even arrange web demonstrations for you to get a look and feel of the software. Of course every vendor will tell you that they are the best and that they can answer every one of your needs. The trick is to have them demonstrate your requirements through a business flow of your own design.
After discussing your needs, you should have a good idea of the capabilities of the vendor. Some you will be impressed by and some you will not want to speak to again. Develop a short list of 2 to 4 vendors. Then develop a scripted demo for them to provide to you. The key is for you to develop the demonstration, not the vendor. They will only show you their best features. You want to see them demonstrate your business process.
Once you have seen the vendor’s demonstration, then you can check references and negotiate pricing. The key things to remember is that you must have your own requirements defined and the vendor must demonstrate your business flow. If they are successful in meeting your requirements and showing you that it can work, then they can be a viable candidate and you can feel somewhat assured that you are going to implement a software that is compatible with your business.
Chris Shaul is a Sr. IT Consultant and specializes about ERP selections and implementations.
