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Business people working at the officeThe ERP software selection process isn’t without its share of pitfalls and ambiguities. Few of these challenges are intentionally caused by ERP vendors and their sales reps, but a number of oversights and lack of attention to detail early in the software evaluation cycle often come back to haunt organizations – especially as they get into the ERP implementation process.

One of the first major milestones in any ERP implementation is the receipt of the ERP software proposal.  This typically outlines anticipated scopes, costs, timelines, resources and other critical components of procuring the software. It may or may not also include potential services, integration efforts, customization services, hosting services and other items suggested to implement software. This is why it is important to understand exactly what is in proposals that you may receive.

Below are a few ways to navigate a key challenge of ERP software proposals “murkiness:”

  1. Understand the exact scope of the proposed software solution. Getting to the bottom of what exact software is being proposed can be more challenging than it sounds. Constant updates to software versions, multiple variations of available modules and disconnects between the demo and proposal cycle can all create ambiguities that are difficult to manage. For example, sales teams will often demo one version of a product, but the proposal team will assume a different version of the software – all without necessarily knowing or telling you the difference. We’ve seen a number of ERP expert witness engagements boil down to this one simple (and important) breakdown early in an implementation failure.
  1. Define and understand key proposal assumptions, such as your roles and responsibilities in the project. Keep in mind that software vendors are trying to sell you on their solution, which includes outlining the ways that costs, timelines and risks will be minimized if you select their solution. It is not necessarily in their best short-term interest to be overly realistic in the sales cycle, so it is your job to make sure you understand what is driving their implementation cost and time assumptions. For example, how much work are they planning to shift to your team versus taking on themselves? Understanding these assumptions will ensure that you are fully aware of what is driving the details of the proposal.
  1. Ensure that you are comparing apples to apples. Comparing one proposal to another can be a nightmare – even for our team, who does this for a living every day. Each proposal looks different, has different assumptions, different scopes of functionality and other variables that vary from vendor to vendor, so it is vital to decipher and normalize accordingly so you are comparing apples to apples in your evaluation efforts. For example, one vendor might include their advanced demand planning and budgeting modules, while others may have excluded these modules, but included others. Others may have assumed that you are going to do all the data conversion work yourself, while others may assume that you’re not. Each discrepancy like these has the potential to create a huge amount of “noise” in your evaluation process.
  1. Trace the proposal back to you business requirements. At the end of the day, nothing in the ERP software proposal matters if it doesn’t meet your various business requirements and objectives. The last thing you may want to do is review your business requirements after reading a 100-200+ page proposal, but it is a critical step in the process if you want to do it right. That is the only way to ensure that your proposals and corresponding expectations will ultimately meet the business needs that you and your team have set forth early in the process. This discipline and focus is something that should start when reviewing proposals and continue all the way through implementation.
  1. Look for items missing from the proposal. Most ERP vendors are good at one thing: installing, configuring and customizing software. They aren’t typically good at the people and process-side of the equation, which is ultimately what will make your project succeed or fail. When reviewing ERP proposals, look for these missing critical success factors, which you know you will need to address in some fashion in order to be successful. For example, business process reengineering, organizational change management and the true “program management” style of ERP project management are among the things most commonly missing from ERP sales proposals.

Evaluating a series of ERP vendor proposals is never going to be easy. However, understanding the nuances and complexities will enable you and your team to ensure that you not only find the right software for your organization, but that you also implement it in a way that will meet your needs and expectations.

Learn more about how to make your project successful the first time around by downloading our Expert’s Guide to ERP Success.

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