What does ERP Stand for: How to Select an ERP Solution? Part 2 of 4

As ERP software consultants, we know all too well what ERP stands for: it basically means that your company will now have an integrated solution that helps increase efficiency and grow your business.  The first and most important step is knowing how to select an ERP solution that is the best fit for your business.  This is a crtitcal part of any successful ERP implementation.  Most of our company's (The TM Group) business comes from referrals, so in the end what we want most is a happy and referenceable client. We won't knowingly take a customer we don’t think is a good fit for our solutions or mislead them on the total cost of a new system implementation.  Although, I personally know may sales people have and will sell the wrong ERP solution to make a sale.  It is our reputation on the line and if our ERP solutions are not the best fit, then we will recommended to companies that they should look at a competitor's package.  We will review how to find the best ERP consultant in a future piece in this blog series.  In the meantime, check out our previous blog What is ERP: How Much to Spend for an ERP Solution?

Based on the many software selections that I’ve been a part of since the 1990s and talking to companies whose selection and implementations have gone wrong, here are some suggestions of what I suggest companies looking for a new ERP system should do.

What does ERP Stand for: How to Select an ERP Software Solution

• Document business requirements & decision making drivers. Classify what is a must have vs. a nice to have for your reference. This is done best by an ERP software selection committee which includes the key business functional areas.
• Issue Request for Information (RFP) to ERP software vendors which is only a couple pages long. Include key requirements and ask for preliminary pricing to help you narrow down the selection process. If issuing a longer Request for Information, only send it to a vendor short list of 2 or 3 vendors. There are a number of canned RFP tools to help with this process. However, if you use one of these, make sure you tailor it to your specific requirements. For example, if you don’t manufacture anything then remove the manufacturing section of the document.
• Based on responses to the RFP, preliminary pricing, and industry reports (Gartner, Accounting Library, etc…), pick three or four ERP software solutions in your budget range for detailed demos. No script, but provide short list of major requirements that must be shown. I’ve actually seen vendors drop out of the selection process at this stage because they knew they didn’t cover some major requirements well.
• Document all ERP software vendor answers to your questions.
• Look closely at the software publisher. Make sure you are comfortable with their reputation and long term viability. Do they use a partner channel or have a direct implementation staff. Local resources will save on travel expenses, but much work these days can also be done via the web remotely. In my opinion, a blended approach of onsite and offsite consulting is best.
• Two or three references are customary, but please realize that no one is going to intentionally give you a bad reference. You should also ask your peers what they know about your final two or three application choices. LinkedIn groups could also be used for these sorts of informal references.
• Ask to meet the specific consultant(s) that will be assigned to your project and learn their background. Are they employees or contractors?
• Before the demonstration, have the final two or three ERP providers visit and tour your main facility. This allows them to better understand your operations and more importantly, it allows you to get to know their consulting team. Insist that their consultants be involved in this step and it’s not just their sales people and pre-sales demonstration staff. This allows you to get to know the people you would actually be working with during the implementation and see if they are a good cultural fit.
• Start the project with mini-project to do some paid discovery with the final vendor’s consulting staff. This allows you try them out with a minimal investment before starting the full blown project. We usually start with projects a Discovery Phase in which we produce a Business Review Document and/or a Statement of Work. This makes sure that the software provider and the client are on the same page about what is included in the project.

To learn more about our ERP solutions and services, please visit http://www.tmgroupinc.com or contact us at 888-482-2864 for Microsoft Dynamics and www.greenstonepros.com or 248-919-9520 for Sage ERP X3.