You want to transform your business and you know that you are being held back by your information systems. You firmly believe that you can streamline your processes to build and sustain your competitive advantage You want to build a strong information system foundation because you know that your Business runs on an Enterprise Resource Planning (ERP) System. Taking on these projects is a major strategic business initiative. This is often one of the most challenging projects a company undertakes, and you want to do it right. Therefore, selecting an ERP system is a big deal. First, you must select the right system, and then you need to select the right team to work with.
So where do you start? You may feel overwhelmed at the start as there are 100s of ERP systems to choose from. It would be nice to have someone who has deep experience in this entire journey – from selection to implementation and support. You need unbiased research by vendor-agnostic experts who study your business processes thoroughly, understand the critical business requirements, and then prepare a roadmap for your specific transformational journey.
espi is driven to ensure that you generate high value by leveraging your ERP system!
espi has helped 100s of companies through systems selection, implementation, and optimization projects. We have a solid understanding of the capabilities as we have seen what is “under the hood”. We say that ERP selection is like laying out a runway for a successful launch of your ERP system. We have listed best practices that will prove to be extremely valuable when selecting an ERP system.
Business Case – Define the transformational objectives and desired business benefits. These benefits tie into strategic objectives such as enhancing the customer experience, increasing productivity by streamlining operations and supply chain, improving operational and financial visibility, thereby improving timeliness and quality of management decisions, improving compliance, etc.
This business case documents the business value your organization wants to generate by leveraging ERP system capabilities in the short and long term plus the necessary investments to get there. Strategic and functional leaders must see that the investment and effort in the ERP system are pragmatic and can be justified. The details vary depending on the organization and business processes. You know the challenges you face and what can change once the right processes are in place. These objectives help to measure the success of the implementation once the system has settled in. The total investment plan for ERP projects certainly needs to include software, hardware, and implementation costs – both external and internal. In addition, it must address the cost of business process transformation and change management to ensure the entire organization will be ready-willing-able to drive value through this investment.
Discovery – ERP system serves the needs of all the functions in the organization. Typically, you need to cover all key processes from opportunity-to-cash, plan-to-produce, procure-to-pay, as well as finance and control. Taking a deep dive into all operations to clearly and objectively define business processes and requirements ensure that the current state is clearly understood, current challenges are identified, and transformational opportunities are documented. This discovery needs to cover People and Processes that can leverage the right technology. Focusing on processes ensures robust and scalable future-state processes are designed to meet corporate objectives. The people aspect is most critical and is often missed. A thorough review of all stakeholders is required to build a strong foundation of change management that will ultimately deliver desired business benefits
RFP and Demos – Often times executives fall into the trap of relying on conversations at a trade show or listening to their peers, rather than taking deliberate steps in selecting the RIGHT ERP. Unfortunately, you cannot test drive an ERP system in the real world. So, it is critical to deploy a methodical approach when selecting the RIGHT ERP system. The ERP vendor landscape is complex and dynamic with various vendors offering on-premises as well as cloud solutions. You need to create a shortlist of right-sized vendors that are most likely going to deliver the business benefits. Then you need to clearly communicate your expectations to these vendors. The next step is to list your requirements and send a Request for Proposal (RFP) to the shortlisted vendors. You also need to make sure that the systems integrator representing the vendor aligns with your business philosophy to become a long-term partner. This RFP must include a description of the current state of the business, your vision of the future state of the business, key requirements, and expectations. This helps the vendors respond with useful details about their offerings. This helps in developing an apples-to-apples comparison matrix. After that, naturally, you want to see a demo of the system. For these demos, provide a dataset that your team will be able to understand and relate to. Invite relevant stakeholders to the demos and ask the vendors to show your business processes mapped into their systems.
Contract – Once you are satisfied with the functionality presented during the demo and all stakeholders can see how the new ERP system will benefit the organization, then you enter the final stretch of your selection process. Invite the vendor and/or the systems integrator to present their commercial implementation offer. Make sure you understand the Total Cost of Ownership (TCO) with all the components and modules. Make sure you understand the options as well as the advantages and disadvantages of how and where you will deploy the system. Review the details so that you understand what is covered and what is left for you and your team to take care of. Make sure you understand who is going to do what and that your team has the bandwidth to support critical activities such as the design of the future-state processes, preparation of the master data, training, and education, and testing and training of the end-users. Pay particular attention to the terms of the contract. We have been able to help businesses draft and negotiate contracts that become a win-win for all parties involved.
With this hard work going into the selection, you know that you have selected the right ERP system for your transformational initiative. You also have built a runway for your implementation phase to take off successfully.
If you’d like to speak to an expert when you embark on this journey, reach out to us. Our independent, objective services have helped our customers select the RIGHT ERP systems to deliver their transformational objectives.