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A common question I receive when conducting ERP evaluations for clients is how many vendors should be evaluated during the assessment and selection process and how should they conduct the ERP evaluation process? If you count all the general and industry-specific packages, there are hundreds to choose from, so the process can be very overwhelming at times.

One of our recent posts posed the question of whether or not the vendor you choose really matters. While this was a rhetorical question, the fact of the matter is that it is an important decision that will have a significant long-term impact on your business.

To simplify the ERP evaluation process without overlooking a package that may be a strong fit with your organization, we typically recommend a multiple-phase process to evaluating vendors. This process assumes that you have already identified your to-be business processes and business requirements, which are both critical to an effective ERP assessment.

Steps for Successful ERP Evaluations

  1. Define the potential industry-specific and general ERP packages. Based on your business requirements and budgetary needs, you can probably eliminate most vendors. We typically recommend arriving at a group of no more than 6-8 “long-list” vendors that you will assess.
  2. Once the “long-list” has been identified, identify the key requirements that a package must have in order to make the short-list. These “deal-breakers” should help you arrive at 3-4 “short-listed” vendors. This stage of the evaluation process can typically be completed by discussing business requirements with each of the long-list vendors and viewing an overview demo of the product.
  3. Conduct a more detailed assessment and analysis of the short-listed vendors. You should identify and prioritize all of the detailed business requirements that your organization needs of a potential ERP package. From these requirements, it is helpful to create demo scripts to ensure that each vendor is demonstrating their product as it relates to your business processes. Otherwise, vendors like to focus just on their strengths and not necessarily on how their software fits with your business.
  4. During the short-list and demo evaluation, involve key users and ask them to complete evaluations for each of the vendors. These evaluations should be quantitative assessments of how well the vendors’ products address the key business requirements and demo scripts.
  5. In parallel with the functional assessments, assess the technical capabilities of the short-listed vendors. This should include items such as scalability, ability to integrate with legacy systems, how open the architecture is, etc. These technical factors may or may not weigh as heavily as your functional business requirements.
  6. Make a decision based on the input from the vendor evaluations and technical assessments. It’s not as easy as it sounds, but you will want to gather the input you’ve received from the various assessments and prioritize the vendors’ strengths and weaknesses. Depending on the level of agreement or disagreement on your team, it may require more of a quantitative ranking and weighting to evaluate how well each of the packages meets your business requirements.

While this process may seem overwhelming and more extensive than you had planned, it is a good way to consider a comprehensive set of options without taking an eternity to arrive at a decision. Often times, it takes the help of an outside ERP consulting firm to guide the process and provide expert insight. However, given the magnitude of ERP evaluation’s final decision, it is worthwhile to make the ERP software selection that is right for your organization.