no one understands your business like you do. You may be one of the few
that has reviewed and evaluated ERP programs extensively before.
package for your business can be an overwhelming task. While many
companies feel that any software will work and their organizations will
simply conform to the functionality of the software, widely-publicized
ERP failures indicate that this isn’t the best solution. Further, since
ERP should be a transformational business initiative providing key
competitive advantages to your company, the decision shouldn’t be taken
lightly or made with incomplete information.
the best fit for your organization? Here are seven steps to help you
choose the right software for your organization:
first and foremost a business initiative, you should first define and
document your current business processes, pain points, and strengths.
This analysis should also include what you think your processes should
look like in the future (your “to-be” state) and the corresponding
business requirements. These processes and requirements should
eventually be used for potential software vendors to demonstrate their
product’s capabilities within the context of your business needs.
Evaluate the technical fit. Although ERP should be a
business rather than a technology initiative, it’s also important to
understand how a potential software solution will align with your
current infrastructure. For example, if you’re a Microsoft shop, you’re
likely to find a better technical fit with ERP software products built
on a .NET platform.
Understand the total cost of ownership. During the
sales cycle, ERP software sales reps are interested in downplaying the
costs and risks associated with purchasing their software. However, it’s
a lot easier to accept potential costs early in the process rather than
after you’re already committed to a particular solution. Be sure to
uncover “hidden costs” associated with ERP, including implementation
costs, hardware upgrades, backfilling your project team resources,
software maintenance, etc.
Develop a realistic implementation plan. While
you’re still in the sales cycle, you should take vendor implementation
duration estimates with a grain of salt. It’s important to develop a
comprehensive project plan that includes not just the activities
required to install the software, but the ones that are required to
ensure that the solution is fully functional, tested, and accepted by
end-users. This plan should be developed prior to your final software
decision so you fully understand the cost and resource commitments
required to make the project a success.
should include everything from business process and workflow design to
data migration, conference room pilot, multiple test iterations, and key
organizational change management activities.
Track the potential business benefits of the new system.
If you don’t measure it, you likely won’t achieve it. ERP projects are
no different. Chances are your organization is looking at ERP as a way
to reduce costs, increase revenue, or scale for growth, and you should
estimate and measure benefits against these metrics if you are going to
realize the full potential of ERP.
Keep your options open. While this may sound more
like dating advice, it’s also relevant to choosing an ERP package.
Contrary to common belief, there are more than just two to three primary
ERP software vendors. Although two to three software vendors constitute
a majority of market share and marketing dollars, there are at least 70
viable ERP software solutions in the market, all with varying degrees
of functionality and strengths.
based on brand name or based on what competitors are doing. Instead,
organizations need to consider the options that are going to best meet
their unique business requirements and sources of competitive advantage.
Look for objective and independent advice. Ask
colleagues, employees, and other contacts what they use or recommend for
a company like yours. Conduct research on the internet or hire an ERP
consultant if necessary. In any case, don’t assume you have all the
answers if you don’t have experience with ERP. Find other sources of
independent ERP advice to validate what you’re hearing from software
much more likely to be one of the ERP success stories rather than one of
the ERP nightmares we’ve all read about.