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Top 7 tips for getting an ERP Software Selection on Track

You’re looking to find out how to get an ERP Software Selection back on track. This means that you probably have an evaluation that is going poorly and you are being led by the ERP software vendors, right? The ERP Software Selection process can be a struggle, but they don’t really have to be. If the ERP Software Selection follows a clear process, then things will run smoother. The trick is to not let the software vendors drive ERP Software Selection process.

Key ERP Software Selection Tips

1. Get Senior Management on board now
2. Be sure you have clear goals
3. Define your both your technical requirements and business requirements
4. Have a neutral third party manage the process.
5. Eliminate vendors early, and without regrets
6. Be sure you are working with the right software providers
7. Reassess your internal team

One of the top things you can do to ensure success of any Enterprise Software Selection project is to ensure that senior management is on-board with the project and that they fully support the goals of the project. If top-line management is not supportive of the project, there will be departmental and division contentions during the implementation. Often these arise during the selection process. Usually it is the case of one department competing for the same resources as another department. This often will show up on conflicting requirements for the system. Senior management must be the tie-breaker and define the future path the system should take.

If the project does not have clear goals, it is bound to flounder. Goals should not be general such as replace our system by next January. The goals should have significant business impact. A goal like “Reducing inventory by 25% while increasing sales throughput by 15% one year after implementation” is a clear goal that benefits the business and lays a stake in the ground that the system must achieve. You may find that the system can help you exceed that goal, but if you do not measure in a clear goal such as this, how will you know you have succeeded? The pain and inconvenience of an implementation will create a lot of problems within the company, but a clear goal is a great focus agent to get past the disagreements and personality conflicts.

ERP Software Selection Requirements

Often a company will define a set of requirements for a system and these requirements will have no impact on the decision of the system. Requirements need to be business driven and be tied to the factors that make your company successful. Look at the following two requirements and see which one makes it easier to help in a selection:

1. System must have serial and lot tracking.
2. System must be able to report on all shipments by a particular lot with traceability back to the original batch or incoming receiving document.

These two statements are essentially asking for the same thing, but when it comes time to solve a problem, the second requirement will distinguish of the system can solve the problem. Define your requirements around business processes, not about system features.

Maximizing Business Performance through Software Packages: Best Practices for Justification, Selection, and Implementation

Additionally, most systems nowadays can handle most of the key things you need. They all do General Ledger, Accounts Receivable, Inventory, etc. The question is, what are their strengths and what are their weaknesses. Defining specific business process requirements around the things that you do frequently is the best way to ensure that you get a system that matches your needs.
Many times when companies get in trouble with an ERP Software Selection, it is because they tried to manage it on their own. Often the IT manager or even the Controller will get the task of defining requirements and shepherding the system selection and all the vendors, value-added-resellers, and reference clients. Since they already have a key role in the company, it often a daunting task to get them to manage the selection process and do their day job. Because of this, it is often advisable to get a third party consultant involved to manage the process. The key thing about this consultant is that they should not have any financial ties to any vendors. They need to be non-biased and have experience in many ERP Software Selection projects.

Why does this help? There are a few reasons, but the key reason is that they can supplement your time and handle all of the details around gathering requirements, building scripts, arranging demos, and being the one to have to tell the vendors “no” at the end. Further, they usually come with a broader vision of how the end result can be achieved. They also make a living out of doing these selections and they know the pitfalls and can help you avoid many of the vendor “tricks” that are often played to ensure that the salesperson wins the sale. If your selection is already off track, bringing in a consultant can often help realign the various team members and refocus the selection.

As you move into the ERP Software Selection process, it is important that you eliminate as many potential candidate software systems early on, so you are not wasting your time and efforts looking at a broad range of systems. Ideally, you start with a long list of 10 and whittle that down to the top two or three. Get the software vendors that are clearly not matching your requirements out of the running as soon as possible. Use resources to help you define the best fit for your company. Many times, the vendor will bow out if they see they are not a clear fit to your requirements. But with each elimination, document why they were eliminated, so that at the end, when someone asks, “What happened to XYZ software, I thought they were a good fit”, you will have the answer as to why they are no longer being considered.

Once you have chosen the two or three candidate software systems, you want to make sure that you are working with the right provider. Software is sold either direct or through indirect channel partners. The channel partners, or value-added-resellers (VARs) each come with their own specialties. You need to find out are you dealing with a VAR or with the Software company itself. If you are dealing with a VAR, you need to make sure that they are the best VAR to help you implement the software. Do your research early, because the last thing you want to do is to change VARs late in the process. This causes all sorts of problems, most of all it delays the selection by weeks or months.

When dealing with VARs, talk to the Software Developer (see our directory of ERP software vendors here) and get their take on the VARs strengths and weaknesses and see if there may be another company you can speak with. Interview the two implementers (VARs) and see which company is a best fit to work with your company. Often it comes down to personality, one group was too arrogant, one group just didn’t get us, or even that VAR’s sales rep had a horrible personality. Find the fit because if you select their ERP software, you will be living with these people for 6-9 months or more. You want to make sure that you can work through the implementation with them as well as later rely on them for ongoing support.

If you are dealing with the software company direct, the same questions apply, but in a sense of is this the software to get married to? You need to be sure that not only the software works for you, but also that the people and company are a good fit to work with your company.

Lastly, take a good, hard look at your team. Do you have functional members from each department? Do they each bring a wealth of experience about their area? Often the hardest thing about the ERP Software Selection process is getting the best people in your company and pulling them out of their jobs to take part in the critical task of selecting a new system. They are usually the person most in demand. They need to be the one to help select the system as they know the current system and business processes inside-out.

Often an ERP Software Selection will go badly because the best people can’t give the time to make the process happen. This is why it is so important to have senior management involved and have a clearly stated set of goals for the project. Having a third party to help move things along and to look at your business objectively will aid tremendously in making the ERP selection process easier. Most of all, by putting all seven of these tips together, you will ensure that you have a successful ERP Software Selection process and that you end up with the best software for the success of your company.

ERP Software 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: How to Assess Accounting Software Vendors Viability

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 â€œmanufacturing erpâ€ or â€œdistribution erpâ€ 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 vendorâ€™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.