Selecting new enterprise software can be a daunting task. Organizations often make decisions based on perception rather than objective and unbiased information. However, if your new ERP system is ever going to enable true digital transformation, your organization needs to prepare for a successful selection process.
Preparing for ERP Selection
Before evaluating potential ERP vendors, your organization should ask the following questions:
1. Why do you want to implement ERP? In many cases, ERP software will not solve your business problems. If your business processes are flawed, even the most advanced enterprise system isn’t going to help. It’s more important to identify your organization’s specific pain points so you can define the appropriate enterprise or IT strategy. If you find that ERP is not the best path forward, there may be more cost-effective and lower-risk options such as improving your processes, redesigning your organizational structure or consolidating your global supply chain. Alternatively, you may find that technology is the best way for your organization to enable business improvements.
2. What is your business case and expected ROI? Your business case should outline the expected benefits and total cost of ownership for each ERP system under consideration. If the expected ROI for several of these systems meets your minimum investment criteria, then it’s time to share your findings with executives. Armed with this powerful tool, you can convince executives that new technology is a wise investment.
3. What are your business requirements? Once executives are on-board, the next step is to define and document your business requirements. This includes “nice-to-have” requirements as well as “deal-breaker” requirements. Requirements gathering is not only an opportunity to improve your operations and increase efficiency, but it will help you select the ERP system that best supports your optimized processes. The last thing you want to do is use software to automate inefficient processes. Of course, this is only a snapshot of the entire planning process. Your organization may not be prepared to enter the ERP selection process without additional planning and guidance. An independent third-party can provide what your organization may be lacking in terms of resources and expertise. Most organizations do not have an objective view of the entire ERP market, nor do they have experience and lessons learned from hundreds of ERP implementations.
Selecting an ERP system is one of the most important decisions your organization will ever make. This decision will have a long-lasting impact on your organization’s employees, customers and profitability. Given the magnitude of such a project, your organization should do everything it can to mitigate risk.