The initial phases of an ERP initiative are filled with excitement and charged with the promise of a better, more efficient tomorrow. This excitement is often reinforced as software vendors unveil slick demonstrations and practiced presentations promising the world to your organization. The software salesman answers questions with promises of flexible functionality and assurances that their product is the perfect fit for your processes. Despite your intuition telling you that you should conduct further due diligence and vet the extraordinary claims of software vendors, the idea that the software in front of you could be the perfect system is an attractive fantasy to buy in to.
This is the point where you should stop, take a step back and perform a reality check on the situation. Are you certain that you have completed an adequate analysis prior to making your software decision? Before you move forward, make sure you ask the following questions:
1. Is the system really a functional fit? If you haven’t conducted in-depth analyses of your processes and produced a list of detailed functional requirements, then chances are you won’t be able to articulate the needs of your organization adequately. Functional requirements are the basis for determining which systems can meet your needs and no ERP software should ever be selected without analysis against requirements.
2. Do you have a robust selection process? Are you being systematic in your selection process or are you operating on “gut feeling”? It is critical to define a selection process with adequate checks and balances to avoid selecting the wrong product. What is a desirable system to one department may be the worst option for another. Be certain to include a cross-functional team of decision makers with a clear understanding of your organization’s functional priorities.
3. Do you have the right Implementer? Even if you determine that a particular system is a good functional fit, the resources used in implementation can make or break your initiative. Implementers should be scrutinized as (if not more) thoroughly than the software itself! When looking at different software implementers, make sure to ask for references and always get in touch with past clients of a given implementer!
4. Are you paying sticker price? Most software vendors will tout their “discount rates” when first showing you price tags. Don’t be fooled! There are always ways to negotiate lower software license fees and acquire advantageous maintenance terms. Are you brining a crack negotiator to the table? If not, do not purchase software until you get one!
5. Are you ready to live with your decision? An ERP implementation is a huge undertaking! Bringing the wrong system or vendor to the table and the resulting failure can be hugely damaging to an organization due to the high financial, time and effort costs associated with ERP projects. Be sure that you have done all that is necessary to make a confident decision before entering contractual obligations with ERP vendors.
If you are not certain about one or more of these questions, then a step back and critical analysis of your software selection process is needed. Remember, it is much less costly to be thorough at the front end than it is to implement the wrong product.
Learn more about how to avoid an ERP disaster by downloading our white paper, Lessons Learned From a Government ERP Failure.
Written by Ian Doubleday, ERP Consultant at Panorama Consulting Solutions.