Clients will come to us and ask two questions: what is my ERP system going to cost, and how long is it going to take before we’re live?
The only way to truly answer that question with any specificity is to do an evaluation. The first stage of an ERP initiative is Evaluation and Selection, and companies should plan on three to six months. While that surprises most people, there are many reasons it takes that amount of time.
Companies may begin their research independently, and find high profile ERP names, such as Infor, Epicor or SAP. It’s easy enough to search YouTube, watch some demos, and think “Great! That’s what I want!” Then call up a vendor and ask for a proposal, and figure you’re on the right path. Unfortunately, this is exactly how companies get themselves into trouble.
In this scenario, companies have put the cart before the horse. They have selected a system without knowing if it can actually provide the business and technical functionality that their organization needs. Panorama’s methodology is to first begin with defining the requirements of a system, then searching for a system that can deliver that functionality.
ERP software is a major capital investment – up to 5-8% of a company’s annual revenue. It can take years to implement and is meant to last at least a decade. Therefore, if you make a mistake, this is a very expensive mistake that will have some long term implications.
Panorama’s best practice Evaluation and Selection process includes: defining business and technical requirements, mapping business processes, gauging organizational readiness, vetting a long list down to a short list, managing vendor demonstrations and RFPs, and finally, completing contract negotiations, analyzing all of the data for cost-benefit analysis and delivering a final recommendation. These steps take time, but ensure a wise long term investment.
Making the right decision, and making it for the right reason at the right time is absolutely essential.