With literally hundreds of ERP software packages to choose from, selecting the right one for your government institution based on your specific needs can be stressful, to say the least. Throw in the threat of some type of operational disruption occurring at go-live and the selection process itself can add a gray hair or two.
Many of the indicators of a successful ERP implementation are quantitative and in the form of budgetary and timeline measures. If your ERP project runs over budget and/or takes longer than expected to complete, your boss probably won’t be too happy with you. He or she might be asking you the tough questions such as, “Why did this happen?” and “How could we have prevented this?”
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No one ever plans to fail; rather there is just a failure to plan. It doesn’t matter if the purchasing decision is for a new ERP system or for a box of cookies; the idea is the same – one must think before they act. Setting realistic expectations for what you need and planning ahead will reduce the risk of your ERP implementation going over schedule and over budget.
Below are three common reasons that ERP implementations can quickly become out-of-hand and out-of-scope:
1. Poor vendor demonstrations and negotiations. ERP software vendors are very good at showing what their software is good at and very good at not showing what their software is not good at. Without an experienced and technology-agnostic ERP implementation partner who can help manage software demonstrations, the vendors will be showing all the bells and whistles of their software and not necessarily what your government institution specifically needs to see. This oftentimes leads to the selection of ERP software that is not the best fit. The expected benefits that would have been realized are reduced and you are forced to backtrack and spend more time and money to gain additional functionality that should have been included from the beginning.
2. A “cookie cutter approach” was taken during ERP selection. In this approach, the ERP vendor uses an RFP and implementation plan from prior engagements and modifies it to better fit your specific needs. This is a “one-size-fits-all” approach that squeezes your government institution into the vendor’s template. The vendor does not take the time to get to know your agency, understand your operational model, get to know your people and find the right fit for your processes.
3. Choosing the wrong consulting firm. Certain consulting firms claim to be “independent” and “technology-agnostic” yet demonstrate their value proposition by participating in vendor negotiation savings for their clients. These consulting firms have been known to have prior agreements with ERP vendors, allowing them to artificially inflate their initial cost estimates so the consultants can purport larger discounts earned for their clients during the negotiation process.
Below are three tips for selecting the right ERP software:
1. Understand the difference between a want and a need. As with any purchasing decision, the trick is to determine what your government institution really needs and then find what best meets those requirements. What is a ‘must-have’ and what is a ‘nice-to-have?’
2. Establish and document a project schedule before implementation. Beware of optimistic schedules as they will only result in cost and duration overruns further down the road. You do not want your ERP implementation to be over budget because of unspecified costs that were not defined by the vendor.
3. When you’re choosing an ERP vendor you want a partner and not just a provider. Support throughout the full lifecycle of an ERP implementation calls for a long-term relationship and should not be seen as a commodity.
Written by Daniel Rivero de Aguilar, Consultant at Panorama Consulting Solutions.