A few weeks ago, I published a blog outlining how to determine the most appropriate ERP vendor short-list for your organization. We have yet to discuss how to narrow this field of several different options down to two or three options most worthy of further analysis. Given that we have hundreds of people attending our ERP Vendor Showdown webinar series this week, we thought it would be a good time to provide some advice on how to best complete this important part of the ERP selection process.
First, it’s important to understand why this process is so important. Aside from the obvious need to narrow the field in order to ultimately make a final ERP vendor decision, there is also the need to structure your analysis and evaluation in a way that provides your project team with a focused, structured and objective approach to arrive at a final consensus. In addition, the evaluation process should lend itself to capturing and examining multiple data points – both inside and outside the organization – to provide a comprehensive analysis of which ERP software is the best fit for you.
Here are a few tips to transition from your short-list to your chosen ERP vendor:
Don’t rush the decision. It can be difficult to find the right balance between quick versus thorough ERP software selection. On one hand, it can be easy to get caught up in analysis paralysis, death by consensus and other pitfalls of a thorough evaluation process. On the other hand, it can be easy to gloss over the details in the name of making a quick and painless decision. We have found that the most successful organizations find the right balance between the two extremes – they don’t rush the decision but they also don’t get overwhelmed and paralyzed by the process.
Consider multiple data sources during your ERP software selection. Pick any data source regarding your ERP vendors under consideration and you’re likely to get different stories regarding which one is the best. For example, our Clash of the Titans report provides a comparison of SAP vs. Oracle vs. Microsoft Dynamics. The report shows that, on average, Oracle has the highest satisfaction rate, while SAP has the fastest return on investment and Microsoft Dynamics is implemented in the shortest timeframe. So which is the best based on these potentially conflicting data points? This is why it is important to evaluate data from multiple sources, including your own internal demo scores, reliable resources such as Panorama’s ERP Report or Clash of the Titans, and advice from independent ERP consultants who have selected and implemented hundreds of ERP systems over the years.
Focus on what’s most important to your organization. The beauty of being the world’s leading independent ERP consulting firm is that we don’t have any preconceived ideas of what the right answer is for our clients. Instead, leverage our industry experience – whether it be in the manufacturing, services, government or healthcare verticals where most of our clients reside – to help define and prioritize business and technical requirements unique to that specific client. It can be tempting to put too much stock in anecdotal examples of what software other organizations have implemented but at the end of the day, what your organization needs is what matters.
Reengineer your business processes before ERP implementation. One of the common failure points of many ERP implementations is that they assume their chosen ERP software will foster business process reengineering through sexy new technologies. While it’s true that software is an enabler of operational improvements, those improvements simply won’t happen unless you define how your processes should look in the future before you select and start implementation. In addition, conducting a fundamental level of business process reengineering prior to your selection decision will ensure that you are making your decision based on future-state needs, rather than simply paving the cow paths of what has worked in the past.
Don’t forget to start planning for implementation now, before your final decision is made. While many organizations want to make a final decision before even thinking about implementation, it is important to note that most ERP failures begin with mismanaged expectations. In other words, organizations that experience ERP failure often sign contracts with their ERP vendors and system integrators without fully understanding the time, budget and resource requirements to make the project successful – leading to cut corners later in the project. Unlike most ERP consultants, we typically advise our clients to develop a thorough implementation plan and budget so they understand exactly what they’re getting themselves into before making contractual commitments. After all, it’s easier to have any “uh-oh” moments early in the project rather than after spending millions of dollars and years of man-hours trying to implement an ERP system that may have been doomed from the start.
Evaluating ERP vendors doesn’t have to be an overly complicated process. With the right methodology, data points and independent guidance, organizations like yours are able to find the right ERP software and position themselves for a successful implementation.