ERP projects are frequently run by project managers with little ERP implementation experience. Many of these project managers refuse to contract with ERP consultants or ERP implementation companies.
As a result, organizations often struggle to implement new enterprise resource planning (ERP) software.
Whatever the specific struggle, it’s clear that project managers could use third-party guidance. However, finding the best ERP consultant is no easy task.
The 2022 ERP Report
This report summarizes our independent research into organizations' selection and implementation decisions and their project results.
7 Tips for Finding the Best ERP Consultant
1. Ensure the ERP Consultant is Technology Agnostic
While you may want a well-known ERP system, like an SAP or Oracle platform, you shouldn’t rule out other systems that meet your business requirements. You’ll never know what you’re missing unless you hire a consultant with the freedom to recommend any system.
An independent ERP consultant has no financial ties to a particular vendor or system. The implementation partner is only interested in the client’s business transformation success.
Preferred partners, on the other hand, are tied to specific vendors. In other words, a preferred partner’s revenue model depends on selling or servicing particular systems.
This is typically the case with any VAR or large consulting company specializing in just a few enterprise systems. These software consultants charge based on how much savings they negotiate on your behalf. This is a rigged approach that is easily gamed by software vendors.
Independence also ensures the implementation plan makes sense for your organization and isn’t built based on what’s going to generate more software sales for your consultants.
For example, we have seen several instances where our clients’ former consultants were trying to accelerate implementation, not because it made sense for the client but because it helped the vendor sell more software licenses. With such competing priorities and clear financial incentives, it is nearly impossible for the consultant to represent your interests over theirs.
An independent consultant should not necessarily recommend that your organization implement ERP software in the first place. In fact, if your organization’s business processes are not optimized, a consultant should not recommend a system until you look at your processes.
Independent ERP consultants don’t make money from software sales, so there’s no conflict of interest when determining whether your business is ready for ERP. They understand that no system, no matter how advanced, automatically fixes inefficient processes.
2. Understand the ERP Consultant’s Methodology
ERP projects consist of a complex web of non-technical challenges that can make or break your project. Therefore, when evaluating ERP consulting firms, you should understand their methodologies and where those methodologies come from.
Many consulting firms use canned methodologies from various business training organizations. These consulting firms haven’t taken the time to leverage their learning into their own methodologies.
Your consultant’s methodologies should holistically focus on people, processes and technology. As more organizations pursue digital transformation rather than traditional ERP implementations, the need for a holistic approach is becoming clearer.
Organizations are now engaging ERP consultants and ERP implementation companies with expertise in areas like change management and business process reengineering, instead of hiring purely technical consultants who are experts in a specific vendor.
However, just because a consultant says they have organizational change management expertise, doesn’t mean you should take their word for it. Some consultants have a very myopic view of change management, and they are more comfortable with activities like software selection.
You should also consider whether the consultant’s methodology is flexible enough to fit your needs. For example, some organizations need a business process management approach that focuses on improving individual processes. Others need a business process management approach that focuses on streamlining end-to-end processes. Panorama has expertise in both approaches.
Does Your Consultant’s Methodology Include These Success Factors?
- Creating a business case to help justify the project
- Obtaining executive and end-user buy-in
- Engaging end-users in software requirements gathering before selection
- Viewing your processes from an outside, unbiased perspective to identify opportunities for improvement
- Helping you ask the right questions to ensure you’re getting the best product fit for your business
- Helping you set a realistic project budget and timeline
- Providing resources to ensure your workforce is ready and able to make changes to their daily routines
3. Look for a Consultant with an Innovative Mindset
An ERP project is a great opportunity for innovation.
Organizations now expect more from their technology and want an innovative consultant with experience beyond selection and implementation. They want a consultant that seeks out great ideas and translates them into positive change. This type of consultant has an open mind and a seasoned eye for innovative ideas that can be translated into supply chain efficiencies and ROI.
Too often, consultants fall back on “best practices” they have witnessed over the years. Just because it has always been done that way, does not necessarily mean it is the best way to accomplish a task.
4. Ensure the ERP Consultant has a Wide Breadth of Industry Experience
A key part of every request for proposal is the section on “prior industry experience.” You might find the consulting firm has experience with organizations similar to yours, or you might find that the firm specializes in only one market, like manufacturing and distribution.
The best consultants have a “chameleon” mentality. That is, they can blend in and adapt to whatever environment in which they are working. They are able to do this because they have hands-on experience tackling the same challenges across a variety of industries.
This mentality enables consultants to suggest best practices from outside your industry that could bring competitive advantage to your business.
5. Determine the Level of Diversity Within the Consultant Team
People with different backgrounds approach problems from different perspectives. However, many consultants bring the same team of resources to every presentation, regardless of cultural fit. Everyone on the team has worked in the same companies and views the world through the same eyes.
Where are the differing opinions and skills necessary to transform your organization? Where is the global understanding needed to improve your competitive advantage?
You won’t find it in many consulting teams. In contrast, the top ERP consultants use diverse project resources who have been in their clients’ shoes prior to becoming a consultant.
6. Find Consultants who are a Good Cultural Fit
A firm may very well have a “proven methodology” or even claim to be ERP Implementation experts. Their references may check out, and they may have a professional website that says all the right things.
But what about the individual consultants who will be staffing your project? The boots on the ground? The people who will be moving in, setting up shop and working side-by-side with your employees for months at a time? Shouldn’t you know a little more about them and their cultural fit?
In order to uncover landmines that may be hidden behind a firm’s stellar references and long list of qualifications, it’s important to insist on a resume from everyone who will be involved in your project – especially those who will be on site.
Then, Google them, check out their Facebook page, their LinkedIn profile and their Twitter account. Talk to previous clients, not just about the firm but about the consultants who were staffed on the project.
7. Ensure the Consultant has Knowledge of the Selected ERP System
If you’ve already selected an ERP system, it’s important to find an ERP consultant with implementation experience related to your particular system.
While it may seem obvious, choosing a firm that understands the most recent version of your software is critical. For example, there is a big difference between understanding how to implement SAP S/4HANA and having experience implementing SAP Business One, even though they are both part of the SAP portfolio.
Similarly, you’ll want to find a firm that understands systems integrations and how to integrate your system with third-party bolt-ons. For instance, you may be considering a third-party customer relationship management (CRM) system. This should integrate seamlessly with your main ERP system to ensure a positive customer experience.
Client Success Stores
Find out how Panorama’s clients have benefited from our consultants’ ERP implementation and business transformation expertise.
5 Reasons Organizations Don’t Engage ERP Consultants or ERP Implementation Companies
1. Asking for Help Seems Like a Sign of Weakness
You might feel like you’re admitting incompetence, but you’re actually admitting you have limits. No organization has unlimited time and resources.
Acknowledging this fact is a strength. It shows you’re informed about your processes, people and pain points. It also shows you’re willing to change and do what’s right for your employees and your organization as a whole.
If you hide organizational problems, they become much harder to fix.
2. Your Competitors Don’t Seem to be Struggling
There’s nothing worse than feeling like you’re falling behind your competitors. But, are you really? Underneath all their flashy marketing and innovative products likely lie the same underlying operational pains your organization is experiencing.
Again, your feelings of incompetence are unfounded. You’re all in the same boat. The person who calls an ERP consultant first, will quickly outpace the others and achieve operational efficiency, customer satisfaction and revenue growth.
3. You’ll Surrender Control of Your Project
While it’s difficult to trust people, you don’t know with something dear to you, no one said you won’t have any say in the process. In fact, you’ll be in charge of all final decisions, and you’ll have the opportunity to set the tone for all ERP communication.
Consultants make recommendations – you decide whether or not to follow them.
Digital transformations are more likely to succeed with executive sponsorship and buy-in, so the more involved you are, the more business benefits your organization will realize. The right ERP consultants will encourage executive involvement.
4. You’ll Choose the Wrong ERP Consultant
Maybe you’ve had experiences in the past where your consultant put entry-level college grads on your project and allowed you minimal facetime with senior leaders. Maybe you were given a biased recommendation for an enterprise system based on the consultant’s financial ties.
While you don’t want to risk making the same mistake again, you should keep your options open. If you need additional skillsets and resources, the right ERP consultant can provide this while bringing seasoned, industry expertise and unbiased software recommendations.
5. Consultants Will be too Expensive
While consultants aren’t cheap, the cost of a good ERP consultant is always worth the price. In fact, negotiating with your software vendor and ensuring the people and process side of your implementation are adequately addressed will often be enough to justify and pay for consultant costs multiple times over.
6 Reasons to Hire an ERP Consulting Firm
1. Validation of Project Deliverables
Oftentimes, you’re too close to the project to see the big picture, or you’re focused on organizational politics. A third party can provide a fresh perspective and review your ERP project plan to ensure it’s realistic and includes all necessary components.
2. Lessons Learned from Other ERP Projects
3. Specialized Skills
Speaking of change management, you may not have this expertise in-house. If you hire the right experts, they’ll have both technical and business skillsets to address the full lifecycle of your digital transformation.
4. Reduced Strain on Employees
While you do need a dedicated project team, consultants can help you strategically build your team, so you select the right subject matter experts with a strong understanding of their particular functional areas. Then, they’ll help you backfill these resources, so your project team can fully focus on the project.
5. Leverage for Persuading “The Powers That Be”
Sometimes, you have a great idea that will save your organization time and money, but you have no decision-making power. An ERP consultant can help you build a business case that will convince your boss to support the initiative.
6. Cross-functional Problem Solving
ERP consultants can collaborate with process owners across departments to understand pain points and facilitate the definition of future state business processes.
Sometimes, these meetings are one-on-one. Sometimes, they are cross-functional. In both cases, consultants place a high value on stakeholder input from all functional areas. This includes your customers.
8 Challenges You’ll Face if You Don’t Hire a Consultant
Managing your own implementation can be a tempting idea. However, the concept rarely works and is riddled with potential failure points:
1. Not Fully Understanding Options in the Marketplace
It’s important to consider the full plethora of options in the ERP market. SAP and Oracle built their successes in the 1990s and early 2000s by developing the only software solutions that could scale for larger organizations, but those days are long gone.
There are plenty of other options available to large, complex organizations, including a variety of cloud solutions.
2. Not Understanding ERP Success Factors
Has your team been through an ERP project (or better yet, several projects)? If not, this lack of experience can lead to unrealistic expectations and create a high-risk backdrop for your project.
For example, you may not realize how important business process management or ERP data migration are to a project. Also, you may not understand what level of effort these workstreams entail.
The symptoms of unrealistic expectations often don’t emerge until the project is underway. By this time, you may have wasted time, money and resources developing a project plan that needs to be completely re-written.
3. Taking Your ERP Vendor’s Proposal at Face Value
Software sales reps are hired to sell software, not set realistic expectations. They also don’t have a complete understanding of all the activities required to make your initiative successful in the long-term, so it’s important to take their proposals with a grain of salt.
4. Losing Control of the ERP Demo Process
If you don’t control the ERP demo process, your employees may form opinions based on emotion or sales spin.
It’s important to have a structured and disciplined demo process based on your specific needs and ERP requirements, rather than what a software vendor might want to show you.
It is not unheard of for demos to contain “future-state” features. These future-state applications may not even exist in the current software but are a glimpse of what might exist in the next release.
5. Rushing the Project and Minimizing Costs
Wouldn’t it be great if your project took less time, money and resources than planned? Rarely is this the case. Forcing a timeline can lead to bad decisions later.
For example, if you find that you can’t complete your project within that unrealistic timeframe or budget, you’ll be more inclined to cut change management activities, which are arguably one of the most important ERP implementation success factors.
It may seem counterintuitive, but minimizing time and cost can actually hurt your project and organization more than it can help. Fast and cheap doesn’t necessarily equal doing it right, so be sure you aren’t stepping over dollars to pick up pennies.
We recommend developing a realistic implementation timeline and budget based on the scope and complexity of your project.
6. Failing to Effectively Manage Change
It doesn’t matter if your people are “ready for change” and “tired of that old system.” Change is difficult once you dig into the details.
It’s important to invest resources in transitioning your team to new business processes and technology. In other words, take the time to develop and execute an effective change management plan.
You also should ensure your change management activities all tie back to measurable business benefits, performance metrics and key performance indicators. This is the best way to get executive support and ensure the entire project delivers a positive return on investment.
This is easier said than done. In fact, most organizations view change management through a very different lens than change management experts. For example, they . . .
- Think it describes “touchy feely” activities that don’t deliver measurable business value
- Have no idea what the term means
- Deem it noncritical and ignore it
- Understand it, but don’t realize the direct correlation to ERP success
- Remove it from the project plan with the goal of saving time or money
- Confuse it with end-user training
7. Not Assembling a Strong ERP Project Team
No CIO can single-handedly make a project succeed, even if they have past implementation experience. This is why it’s essential to build an ERP project team of both IT-focused and business-focused people.
A diverse team ensures a strong focus on business process management, and we’re not talking about defining the way employees enter information into the system. We’re talking about defining higher-level process changes, as well as changes to people’s roles and responsibilities.
A strong project team also ensures adequate focus on change management. Project teams are responsible for defining the impact of change on individual employees and communicating those impacts through multiple channels.
8. Not Gaining Executive Support and Buy-in
Your project will not succeed if your executive team isn’t fully on board. Your executive team should not only approve the project budget but also help make key business decisions.
There’s usually someone at the executive or management level who isn’t aligned with all the project goals. For example, some CIOs may be intently focused on the technical side of the project.
While you may not win over everyone, you should be able to convert most. For those you can’t convert, your focus should be on neutralizing their negative impact. You can do this by identifying key stakeholders and implementing a targeted plan to sell them on the importance of change.
Who Will You Hire?
Transforming your people, processes and technology isn’t easy. However, ERP consultants and ERP implementation companies can reduce the risks inherent to large projects by helping you anticipate common pitfalls.
If you wait to hire a consultant until you’ve begun experiencing these pitfalls, the damage is much harder to fix. Too many executives are fired over ERP failures. Don’t be one of those statistics.
Instead, leverage the right help to ensure your project is successful and your career thrives. After all, executives who are willing to admit their limitations can experience the many benefits of third-party guidance, such as objectivity, innovation and specialized expertise.
Will you hire the ERP consulting firm that uses a predictable methodology and recommends a predictable vendor? Or will you hire the consulting firm that thinks outside the box?
Panorama’s team thinks outside the box. We are technology-agnostic and adapt our approach to your unique needs. Schedule a free consultation below to learn more about our flexible and integrated approach.