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.
Tag: selection shutters and blinds
Top 7 tips for getting an ERP Software Selection on Track
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.
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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
7 Ways to Fail in an ERP Selection
7 Ways to Fail in an ERP Selection
by Chris Shaul
The best way to fail at an Enterprise Resource Planning (ERP) implementation is to choose the wrong software up front. Choosing software without following some basic guidelines is a sure-fire method for disaster. Probably the worst thing that someone has done (that we know of), was to buy their ERP software at a tradeshow, thinking it would be the cheap and easy way to solve their problems. They ended up spending more than they expected in finding ways to force the software into their business all because of a failed ERP selection.
Below are some ways that will set you on the path to fail at your choice. In other words, they are ways that you can insure that you will choose the wrong system for your company.
ERP Selection Failures
1. Choose ERP software without understanding your requirements. First, you should ensure that you are getting the best fit for your company by documenting your requirements. The requirements should cover the strategic, reporting, functional, and technical aspects of what your company requires to run the business. Choosing software without these documented and without using them as a benchmark to compare the software against is a strategy for problems. Do not run an ERP Selection without well defined requirements.
2. Select ERP software without paying attention to business processes. There are certain ways that you run your business. Not all of them are rocket science, but there are certain things that make your company unique and successful. Choosing software without understanding how things flow in your company will create big problems in the implementation when the software processes information contrary to how you run your business.
3. Choose ERP software because your Friend/Neighbor/Relative is using it successfully at their firm. Another nightmare scenario that has actually occurred is that decision makers have purchased software because their ____ (fill in the blank) has used it and it worked great at that company. That company is not your company. On the surface they may seem similar, but just because one company is running well on the ERP system does not mean that yours will. You may have a special process for getting your goods out the door. The software may not support that method. Perhaps there is some information that you must have because of financial, regulatory, or supply chain requirements. The other company may not have that issue. Perhaps you need to track lot numbers and the _____ ‘s company does not. There are too many business issues that can create havoc in an information system, if the system is not carefully matched to the requirements (see #1).
4. Not having the ERP vendor prove that it will support your business processes. ERP vendors have one goal. Sell you software. Do they care if it fits, can successfully operate your business, or even if it will be a huge burden on your staff? Not really. In fact, if you buy software that requires a lot of care and feeding because it is not a good fit, then the vendor is the one who supports it and makes a handsome flow of income off your company. You can find a software that best fits your business with a free ERP Selection consultation from SoftwareAdvice.com. Get the vendor to demonstrate that it meets your requirements and can transact information in a method that is aligned with your business processes.
5. Choosing ERP software because it looks cool. You may laugh at this one, but the user interface is a sexy selling point of many systems. Is a plain old green-screen as nice to work in as a really colorful Windows screen? Probably not, but does the Windows-based system really address your issues? Your goal should be aligning a perspective system with your business needs. If it comes with a cool interface great, if not, can you live with it?
6. Let the ERP vendor tell you what you need to be doing. Related to number 4 above, having the ERP vendor guide you in your selection is a roadmap to hell. You need to guide them. Tell them what you want and expect. Too many times has a single vendor gained the trust and confidence of a decision maker and guided them to a particular system, without any concern for how close a match is it to the business requirements and processes.
7. Take the ERP vendor’s first offer without negotiating. You can generally negotiate with a vendor several times and get a more than fair price. But the key is to follow good negotiation tactics. Don’t forget that most everything is negotiable. The software, the services, the maintenance, the timing, etc. In the ERP industry, the best time to do an ERP selection is at the quarter or year end according to the vendor’s financial calendar.
The key thing to understand is that there is a path that can lead you to success and many routes to failure. Know thyself first. Understand your business and document it. It is not enough to think you know it. Talk to all levels of users and managers. Ensure that everyone’s needs are defined and a priority is placed upon those needs. If you are not sure of how to run an ERP Selection, then get outside help from a consultant who is non-biased towards systems and can guide you. Be careful of assistance from a company that has an SAP practice, or an Oracle practice, etc. They have internal motivation to help you choose their flavor of software.
Most importantly, understand that you need to drive the process. It is your selection and you need to live with the results. As any good project manager will tell you, start with the end in mind. What do you want the system to do for your company now and in seven years from now? Understand this and go forward in your ERP selection.
Chris Shaul is a Senior IT Consultant who is a regular contributor to ERPandMore.com
ERP Selection Help
ERP 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.
