choose erp system

ERP Software Selection. How do you Choose?

It’s official, you have decided that a new ERP system must be bought. The next natural question is, “Which one do we choose?”.  Opinions on this subject are as plentiful as people.  Personally, I think the choice does not have to be an agonizing one if you go into the process with the right expectations. It is key that you have a clear understanding of what it is you are trying to buy.

There is no Perfect Choice

NEWS FLASH: there is no perfect ERP system for your company.  It doesn’t exist, there’s no such thing, stop looking for it now.   You will have better like finding a unicorn being ridden by a leprechaun.  Instead, start spending your time trying to find something more realistic than ERP utopia.  Even if you happen to find one you think is perfect today, who cares.  ERP is usually a 7 to 15 year life cycle.  Do you really think that your business will be the same 15 years from now as it is today?  If you do, chances are you will be out of business anyway.  No ERP system on the planet will save you from stagnation.

The reason there is no perfection is based on simply economics.  ERP vendors cannot make a profit by selling you the perfect ERP system.  They make money by creating and selling an ERP system that appeals to the largest number of potential customers.  The ROI in ERP for the vendor comes when they can sell the same system over and over again.  This means that their baseline systems are an amalgamation of features, shoved into a single platform.  Additionally, this means that whatever you buy is equally likely to have a lot of stuff in it that you cannot use.  Don’t be afraid to shut those parts off and keep it simple.

Ideas to Consider

  • Vendor longevity and experience in your sector:  Has the vendor worked in your vertical before? Have they worked with companies of a similar size and scope?.  Who can they give you as a reference?  How many developers work on the product?  Make site visits and talk to their customers.
  • User Community:  What user based support resources exist?  Do local or regional user groups exist?  What online resources can help? What is the average waiting time in the support ticket queue?
  • Training Resources:  Your team needs a lot of repetitive training before go-live.  This should be required. Also, you should be able to track who has participated and to what degree.  Can your prospective vendor offer this?
  • Extensible Platform: Is the system built on standard platforms ? If not, is it built on some dying, obsolete platform where the average developer is 3 years from retirement?  How easy is it to modify the interface, move fields around, or add a user defined field ?  Those are things you will want to be able to do in-house.  This is because there will be a ton of this kind of work needed up front.   Additionally is is not uncommon that ERP reporting “out-of-the-box” is insufficient and not what you are used to.  That being the case, how easy will it be for you to quickly create a ton of custom reports?
  • Ease of use:  Can an average sales person or order puller sit down and figure out how to do their job? Will it require a lot of training to do the simplest of tasks? Is the workflow fairly efficient?  If it takes 5 minutes to enter an order today, but the prospective system takes 12 minutes, prepare to have a mutiny on your hands at go-live.

It’s About People

ERP, at its core, is a repository for business transactions.  First and foremost, all ERP systems need to be good at storing data.  Having said that, if you are an executive or otherwise a decision maker, assume that you will get this (unless you have reason to believe otherwise). Also, as long as it is on a standard database platform, you should not have much trouble extracting data for the purposes of reporting or analytics.  Be patient, the analytics you are looking for are probably not there out of the box, you will have to develop them as you go.  These are not the decisions you should be obsessing over.

Your primary concern should be the cultural assimilation of the system into your company. For cultural success, the first thing you need is buy-in.  For instance, if you are a distributor, the people who should have a lot of influence on your decision should be inside sales / order entry, order pullers, receiving clerks, buyers, and the like.  First, look in your current data, determine the most frequently executed transactions. Next, get the people who input those transactions to give you feedback on your prospective systems.  Finally, listen to that feedback and modify your decision process accordingly

Don’t rely solely on IT and other power users to make the decision or speak on behalf of the average, non-technical user.  If your basic users tell you that field A needs to be moved to location B, listen to them…move the field to location B.  After all, you are wholly dependent on these folks to input the data you so desperately desire. It’s not trivial to them, it is directly related to productivity and morale.

Manage your Risk

ERP change-outs are all about risk mitigation, and the risk is inherently lower when the primary users are bought-in and feel like they have skin in the game.  Fully engaged, people are more likely to give you useful feedback in the opening stages of go-live.  This is key because it is the time when things are chaotic and it seems like the world is crashing around you.  Your goal is to get them to tell you what they need to make it work.  Avoid setting up a situation where everyone sits back and says “See, I told you this wasn’t going to work”.

Golden Rule:  ERP change is about people, not about ERP change.

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