Steps for Strategically Selecting The Right ERP System

Step #1 PROJECT KICKOFF

You have the go-ahead to begin your ERP project. Management has given their approval, and now you are beginning to compile the most important internal framework conditions: you settle on the available budget, plan the project timeline, and discuss any other pertinent management provisions.

TIP: Calculate an appropriate process timeline and allow yourself enough buffer time! Allow time for analysis and for setting objectives, and screen vendors and their products methodically. People often underestimate the time needed for ERP implementation—depending on the size of your company, a realistic timeline is between 6 and 18 months.

Step #2 GATHERING REQUIREMENTS

Defining specifications starts with analyzing the status quo and defining your goals—not only in terms of IT (infrastructure, security, mobility, etc.), but also in terms of businesses processes and interfaces. ERP is not purely an IT project; rather, it affects all functions within the company. For this reason, work together with all of your divisions and departments as well as the management team to establish your needs and requirements for an ERP solution within a specification or RFP. How is work currently performed? What's missing and what isn’t working? How do you want to work in the future? Identify current vulnerabilities, list your requirements, and always ask yourself what you want to accomplish with your ERP implementation. Align your specifications with your corporate strategy.

Next, prioritize and weigh your requirements, then establish individual criteria for evaluating vendors. For example, how important are factors such as flexibility, feature depth, scalability, ease of use, cloud architecture, operating costs or training for your company? Do you need specific industry functionality? If so, what?

Step #3 VENDOR RESEARCH

You have now established what your new ERP system should achieve and which software criteria are important to you. But which vendor has the ERP solution that is best suited to your requirements? Your initial research likely produced a list of 5-10 providers. The next goal is to select a short list with a maximum of 2-4 providers to meet with personally. Five things to look for include:

1. Industry Suitability

Is generalized software suitable for your business, or do you need software that's specific to your industry? Industry-specific functions are essential for many manufacturing companies. For automotive suppliers, an appropriate ERP system must master special processes such as “distributed production” or Audi's "string of pearls” scheduling system. Standard ERP systems for production environments don't typically meet these needs.

2. Scalability and Flexibility

Next, think about what your company would need if you were to expand or modify your business processes. In addition to the standard functions of the relevant ERP systems, it's also important to see how easily the platforms can be adapted.

3. Ease of Use and Contextualization

Every team needs access to their own data. You should be able to customize your ERP system so that each user only sees the information that's relevant to him or her. A good ERP solution makes the right data available to the right people at the right time—using an intuitive user interface and, ideally, at a push of a button.

4. Future Proof

How do you spot an ERP partner who will help you future-proof your business? Look for vendors who can help you understand the most important trends in your industry and adapt to them. Ask about their vision for the future of ERP and your industry, and don’t focus too much on current or short-term pain points at the expense of the bigger picture. The best vendors will be ahead of the curve on upcoming trends like Cloud ERP, mobile, BI and Business Process Management tools.

5. Operating Costs

Many medium-size enterprises consider the acquisition costs of IT systems more important than the operating costs., but this is short sighted—operating costs over the system's life are much more significant in the long term. Because of this, you should closely examine factors such as training costs, upgrades and customizations.

Tip: The fundamentals of most ERP systems are fairly similar. However, pay attention to the details that play a role for your company, and also check the roadmaps of various ERP-products. What is the vendor’s vision? How does the ERP solution perform in tests, and which certifications does it have? References—especially within your industry—can also help in the pre-selection process.

Step #4 INTRODUCTION DEMO

Usually done as a phone call, the introductory meeting and first demo is a chance for vendors and clients to get to know each other at a high level and your first look at the ERP systems. Vendors should focus on giving you an overview of the software functionality and usability and how well the software meets your needs.

After this first demo is when many companies narrow their list of ERP vendors to just a few that they want to take a deep dive with.

Tip: The more detail you provide, the more you can customize your workshop, enabling the vendor to provide you with a more meaningful basis for decision making.

Step #5 WORKSHOP

After completing the initial conversation and documenting your data, goals and project vision, the vendor typically prepares a workshop to present individual solutions and processes for your company. The workshop will give you an impression of how the vendor works, if they understand your company, and how their ERP solution can contribute to your company’s future development. Also, ask what staff the vendor will use to complete the project, how the implementation will proceed, and how support is organized. Employees from all major departments and divisions should participate in this workshop. At the end of the workshop, judge the remaining providers again, according to your criteria from step #2.

At Think Tank, you can expect a comprehensive ERP software solution that addresses all aspects of your business processes, or alternatively, we can enhance an existing platform to concentrate on a specific area of your preference!

Contact us to develop custom Enterprise Resource Planning software!