When we speak with companies about their ERP software selection process, many think that ERP is about simply choosing the right software. However, there is much more to an ERP evaluation and selection process than that.
We encourage our clients to go through the ERP selection process with “eyes wide open.” By the time your evaluation and selection is complete, you should have a very good understanding of what you’re about to get yourself into. ERP projects are never pretty; they’re usually more complex and costly than you would like, but it’s better to understand that before your final ERP decision rather than after you’re knee-deep in an implementation.
Four Thing for Keeping Your Eyes Wide Open in Your ERP Evaluation and Selection Project
- Understand the total cost of ownership. A minority of a typical ERP project’s total budget is spent on ERP software licenses. In fact, our research shows that the average is approximately 25%. The other 75% of a typical ERP implementation budget is devoted to implementation services, hardware upgrades, software maintenance, customization, backfilling internal project team resources, etc.
- Understand the real implementation demands. Implementations rarely take as little time as software sales reps will try to convince you. Efforts should be taken to control extended timeframes, but done effectively, an ERP implementation will take time. A detailed implementation plan should be developed prior to the final decision, and this plan should include everything from business process design to configuration to testing, conference room piloting, end-user training, data migration, etc.
- Conduct an organizational readiness assessment. No ERP project succeeds without addressing the people and organizational side of the equation. Conducting an organizational readiness assessment prior to the final ERP decision will help you identify pockets of resistance within your company and determine the organizational change management needs that will be required to make the project successful.
- Negotiate with your selected ERP vendor. It’s funny (sort of) how some companies spend a great deal of time and money analyzing and selecting a system, but then forget to negotiate a fair deal with the vendor. There are several effective ways to negotiate a fair cost and contract terms that will help optimize your overall cost of ownership.
By keeping these four tips in mind during your ERP software selection, you will be well on your way to going into your ERP project with eyes wide open.