You’ve been pursuing your ERP Selection project methodically, and you are down to the finish line: Your team has finished its preliminary evaluation of multiple software packages. You have narrowed down the vendors in the preliminary search to two preferred solutions. It’s now time to review the two finalists in detail and determine the best one for your company. Here is what you need to do to make the final ERP Selection and lay the groundwork for a successful implementation.
The Final ERP Selection Criteria and Methods
1.Update Your ERP Selection User Requirements Document
Hopefully you created a very detailed user ERP Selection requirements document to communicate to vendors your current state and future state needs for ERP software. The requirements list should have been the basis for how you evaluated each software solution to get to the two finalists your team has identified.
During your initial review of competitive solutions you may have realized that there was some additional capability offered by ERP software that will be valuable to your company but was not included on your original requirements document. Make sure you add them on: Don’t hesitate to add additional requirements based on what you have seen.
2.See Your Own Data Running on the Proposed Solution
When looking at ERP software in a final evaluation, it is best to make sure that you have required the vendor to put your sample data into their system so that what you are seeing looks like your company and not the sample company data that the vendor uses in preliminary demonstrations. You should have a Non-Disclosure Agreement (NDA) in place so that your data is treated confidentially.
3. Involve More Staff in the Final Review
While a small committee has successfully brought the project this far, it is time to get more input from future users of the systems being evaluated. Divide the final demonstration into segments and create a schedule so departments know they will be viewing software at a specific time. For example, customer service staff views each system for one hour to look at CRM, quoting, and order entry capability. Staff can ask questions and develop opinions on each system’s capabilities as it impacts their jobs.
4.Make Sure You Review All Functional Areas of the ERP Software
Adequate time must be allocated to review all important areas of business process needs. If necessary, schedule a follow up Web review of critical areas that were not fully evaluated in the allotted time. This is important so that future problems don’t arise because the team did not take the time to get all questions answered. A classic instance of what not to do: rushing through the accounting portion of the demonstration at the end of the day just to finish the session on time.
5. Sales Representations are Not Descriptive of Reality; Take Them with a Grain of Salt
You should not accept the representations of a likeable salesperson who claims that their software provides functionality that you have not actually seen in detail. Also make sure that what you are seeing is what will be delivered for the price you will be paying. It is not unusual for a demonstration to show a specific capability on the screen that is valid but requires additional cost (e.g. applications or custom changes) to achieve the results viewed. Clarifying these differences will yield a more accurate implementation cost estimate.
6. Critical ERP Software Functionality Must Be Demonstrated and be Referenceable
Your company is likely to have critical functional requirements which may not be met even though the vendor claims that the software provides that capability. The required capability must be at least demonstrated to your team and, preferably, verified by contacting a vendor customer who is using that same capability. Your company must not buy software until all critical functionality is fully verified.
7. Demand Rigorous Implementation Methodologies Presentations
Implementation plans that do not begin with the vendor preparing business process maps or doing a detailed review of your business processes will likely lead to misunderstandings, delays or even outright implementation failure. If you already have maps, the vendor should still review them in detail to verify their accuracy.
Other approaches that begin with detailed discussions of data conversion and overviews of software functionality are not of the caliber that you should be using. Reference checking of implementation consistency between plans and reality is an important phase of your vendor due diligence process.
8.Check ERP Software User References
Some claim references need not be checked because “you only speak to the good ones.” The objective of checking references is to learn why the software is working well for the company. Reference checking includes understanding how the vendor supported their customer through issues that arose during implementation. It means understanding how the vendor has continued to support the customer. It should include a discussion about your particular critical business requirements. You can also discuss the quality and frequency of software upgrades. Especially listen for the level of enthusiasm the customer expresses for the software. No implementation goes without a few challenges and few installations are absolutely perfect.
9. Visit a Company Similar to Yours That is Using the Software
Have the vendor locate a company near you that you can visit to see how the software is impacting that organization. Try to speak with actual users about the full spectrum of capabilities that you anticipate using in your installation. These meetings can reveal important information about how – and if — the software is working to add value to the company where it is installed.
Software users love to talk about they have been able to get things done with their software and will be only too happy to provide you with tips or, as the case may be, red flags.
10.Make the Final ERP Software Decision
Choosing a winning solution is not simple. Pricing may not be that different once all functionality and implementation assistance is properly budgeted. Vendors have significant latitude on pricing of software licenses so a final analysis will likely yield small pricing differentials. Given that likelihood, the capability of the software becomes the key factor in making the final decision.
The way to know that you have made the right decision about software your select is to reach the point where you know very specific reasons you prefer one solution over another. This means that you are as comfortable calling the winning vendor as you are explaining to the losing vendor why they were not selected. These differentiators can include:
- Pricing differences between SaaS and Cloud Hosted solutions when one of the solutions is not offered on a subscription basis.
- Completeness of the functionality offered. One solution was more extensive and offered better future state support of your planned business operations.
- A broad range of staff preferred the “look and feel” of one solution over the other. This reason should go beyond initial appearance to address design and navigation differences.
- The demonstrations of one solution were superior to another. Not just the personalities of those presenting, but the preparation of user data and the ability to answer staff questions effectively. Most vendors know when they have made a good presentation and, conversely, when their solution was not presented as effectively as possible so there is no reason to worry about hurt feelings.
Sometimes losing vendors will tell you that you are making a terrible mistake not choosing their solution. If you have followed the recommendations above you should be able to ignore any negative comments and prepare for implementation of the best possible solution for your business. The easy part is now done!
About the Author
Harry F. Landsburg has been helping companies define current state and future state business processes to select software for almost 30 years. Harry is an inactive CPA, an ISO 9001 Lead Internal Auditor and is Lean Manufacturing Certified by the Delaware Valley Industrial Resource Center in Philadelphia, PA. For more information, Harry can be reached at hlandsburg@DVIRC.org or 215-464-8550 x 230.