ERP System Selection Process; How To Select An ERP Software?

ERP selection is a crucial decision for any organization. And to come to this decision, the foremost task is the ERP evaluation. What you need to prepare for is the turbulence, which any new process implementation undergoes, in this case, till the time you are Live on the ERP System.

Companies may sometimes disregard the importance of the ERP System selection process, something which should brace them well to see some ERP implementation pitfalls, at best, no change in productivity, and at worst, a complete implementation failure.

How ERP software works in your experience depends upon how you go about your selection process. Selection of an ERP Software is not as simple as it might seemingly be. ERP evaluation is a rigorous process and managements often have to dedicate precious time and resources during its selection. Making this simpler for you, here are a few of the guidelines which should ideally be followed during the ERP evaluation process.

Establish the need for ERP Software

This is the first step and also a point where a substantial number of organizations falter in ERP evaluation. Here are some of the common reasons that  provoke people to buy an ERP system.

• The competition has it
• The workload will decrease
• Organizational efficiencies will grow
• Infomercials promising a scale of growth and profit
• If I buy an Enterprise Resource Planning software, I must be planning resources, and therefore saving some money
• ERP can better integrate the processes of my organization and get everyone to work together

In fact, these are all the reasons that you should not buy ERP software. If productivity is a problem, then you need to work with core principles first. If you can get all the information you need about the different processes in your organization in a satisfactory period of time, then spending time implanting ERP is surely a waste. This should be your consideration while selecting ERP software:

• Are my organization’s information needs being met in terms of Quality and Time?

Get the Right ERP Software Selection Team

Most companies, when looking to select an ERP system, have the tendency to put an IT Manager in charge of the ERP evaluation. Unfortunately for them, IT Managers are more fascinated by the technology than by its functionality. So if the software doesn’t happen to be the latest buzz word in the tech world, it wouldn’t really appeal to them. The organization needs ERP software which matches or comes close to their functional requirements. Does caring about the Technology help there?

The right team for an ERP Software selection process should ideally be driven by people who can not only arrive at the optimal choice, but also drive ERP implementation effectively through the organization. IT managers should typically be a part of the ERP System Selection in an advisory capacity.

Buy ERP Software you don’t just buy a “Product”

A ‘product’ is normally bought and used as it is. The ERP system can be bought as it is but can never be used in the same manner. It has to go through some workarounds or customizations to suit the user’s needs, verticals or specific company’s requirements.

What this means is that when you do ERP software selection consultant, you don’t just select the Product, you also select the Service provider who will implement and customize the Product for you. A more common term for the Service Provider is an ‘implementation partner’. When you buy an ERP System, the evaluation of the ERP implementation partner is far more significant than that of the product.

What to look for in ERP Software

An ERP Product should either be close to your business or flexible enough to adapt to your business. It is also important to find out how many organizations are using that particular ERP Software. A Product which is close to your business but with lesser Clients is a riskier proposition than a Product which is not that close to your business but has more Clients.

ERP selection process is a long term decision. You have to ensure that the Product which you are buying will stay in the long term. ERP systems with bigger user base typically last longer. It is possible that a Product close to your Business may meet all your requirements, but it can prove to be a disaster of it walks off the market. If buying and implementing an ERP is difficult, the changing over to another ERP can be a herculean task.

Vendors claim that what they have to offer is indeed the best and it is virtually impossible for your team to evaluate a “vast” product like an ERP in a demo which lasts just about an hour or two. One intelligent way to look at a Product is what sort of Analytics it gives. Mostly ERP evaluation teams include Middle or lower Managers in respective functional areas.

What tends to happen in this scenario is that only the operational level information is given any importance. What you need is the top end analytics which can help run your organization. Another way to look at an ERP is how effective is the drill down from a top level information to an item. So, for example, an ERP is a good buy if it allows you to “easily” drill down from a Total Sales figures to country wise, state wise, area wise, invoice wise or item wise.

How to evaluate ERP Implementation Partner

The selection rule for the product also applies to the ERP Implementation Partner.  Look for an experienced partner, preferable one which has been around at least a decade or so. As management, what you need to remember is that ERP Systems are not all about Software. They have more to do with the management. An organization’s management experience spreading across a diverse range of customers and verticals will always come in handy for you. Don’t forget to look for long term stability.

Another parameter for ERP evaluation is to look at the commitment of the ERP Implementation Partner to the ERP business. If ERP Software contributes just about 10 per cent to the overall revenue of the partner, then this is not an advisable option. What you need to look for are people who have ERP as their major line of business and good credentials to back up their expertise.

About the Author

Written by Mr Prakash Gopalani, General Manager of Sales and Marketing at Eastern Software Systems. Author brings together his experience in ERP Sales and Implementations spread over more than a decade in multiple countries. In this article he also brings together an experience of marriage spread over a decade and one wife.