Last week, I received a call from someone going through the enterprise resource planning (ERP) software selection process and she needed some direction. Being an advocate of all that is great about ERP, I was happy to help.
As we chatted, I realized quickly that the company was going to base their six-figure decision solely on the product.
The controller tasked with this responsibility had really done her homework. She had a very solid understanding of the products in the market. Within the products, she could articulate in some detail the features they liked, the features they did not like and the ones they couldn’t live without. Even though she had done her homework, she admitted she was still concerned about the risk involved and was not prepared to proceed.
Because companies don’t buy ERP software everyday, they typically evaluate it solely as a product when in fact they will usually spend more on services over software by a ratio of two to one.
She was right to be cautious because what she was buying was as much a service as a product. While she had satisfied the product questions in her mind; she still questioned the service, and as a result she could not answer the two most important questions most companies never ask when selecting ERP software.
Question #1 – People
Who are the people assigned to implement and support this software solution?
Today’s market is a fluid one. The people being referenced in the company’s client references may not be the same people being assigned to your project. So it’s imperative to learn as much as possible about the actual team that will bring in your solution, including the resumes for those people.
When you’re researching the team you should ask the following questions:
- How long have they been working with this product? Anything less than one year should raise some concerns as it takes a year to become truly proficient in any one product.
- Do they have any certifications? Often the big publishers require their resellers to have their people attain certifications. This gives some peace of mind that they have product knowledge to a level satisfactory to the publisher.
- How many implementations have they participated in? More is better (but at least 5 for some of the team members).
- What modules or areas of the software have they implemented? Are these the same modules you are implementing?
- What is their background in accounting and/or IT? ERP is a financial system. They should have a good blend of both, with a greater emphasis on finance as most everything in ERP touches the financials.
- How well do they understand your business or industry? If they lack your industry or company expertise it will be more difficult to have them provide any value to your company beyond just installing and training on the software. You are paying a lot of money so get people who can add value by sharing best practices of others also using ERP in your industry.
You are going to live with this solution for years so you want to know the people and the culture of your provider. During the sales process, you will meet sales people and possibly their management. You need to meet the services people also (at least the project manager) and feel good that they will successfully implement and support your solution.
Finally, you need to identify the proper person(s) in your company to bring in the system and they need to feel good about working with this team.
Question #2 – Process
What process will they use to bring this product into your company?
If you are at the stage that you are ready to purchase ERP you are talking about spending six or seven figure budgets. Be sure you understand how this budget will be utilized.
The good news is that almost all ERP solutions can be configured any combination of ways to meet the specific needs of the customer. This makes it a very dynamic product. The risk is that in the absence of strong process many hours and dollars can be spent without a solution that satisfies the requirements of your business.
- How much time will this project require from you and the rest of your team? Most of our clients assign a project lead and the most successful projects are the ones where this person makes the project their primary focus. So, you need to know what time effort that is and if it balances against your other daily responsibilities.
- How do you validate if the data, processes, and overall work flow is correct? As the projects get bigger you need to ensure you have your work flow, with your data, trained specific to the role of the user. For example, a purchaser/buyer in your company should learn how to do purchasing using your specific processes (like PO approvals), using your part numbers specifically on the screen relevant to their role.
- What are the time requirements of third parties such as your accounting firm or outsourced IT company to ensure you have a full budget and the necessary time to bring in the system? I believe strongly that the hammer is just the hammer and whether the house was built right or wrong has little to do with the hammer but everything to do with the person swinging it and the steps they go through to build it.
Every significant ERP product company (SAP, Microsoft, Oracle) has their success stories and reference client and their very forgettable projects and implementations. In both examples the product didn’t change; what did change were the people and the processes used.
As a service, companies should also seek to answer the two questions companies never ask and they will find themselves closer to realizing the true benefit of ERP.
January 19, 2010
