When you consider enterprise resource planning, what comes to mind? Ask your colleagues what features and functions they expect ERP to support and you will likely hear everything from traditional back-office capabilities like accounting and finance to full integration with customer and supplier enterprises. The reality is that you can bundle core financials with nearly any set of functional capabilities and call it ERP. The ERP providers’ challenge is giving customers a relevant set of “core” capabilities with the option to move deeper into specific functional areas, as needs develop. For example, ERP provides basic human resource management capabilities but the customer has the option of integrating with a human capital management solution that delivers everything from talent management to learning management. Here are some things to consider when selecting your next ERP system.
Define your initial requirements along with the triggers that will require you to consider additional capabilities. Begin by asking each functional leader what they need to be able to do today. Then consider the company strategy and phase in additional needs based on specific triggers like sales growth (when we hit 500 customers, we will need a hosted CRM solution), locations (when we move into Asia, we will need advanced planning and compliance management), and headcount (when we hit 3,000 employees we will need a complete HCM solution). This approach will give your team an outlet for exploring additional capabilities without exploding your list of initial requirements.
Use vendor demonstrations as a means of exploration while nailing down current requirements. Too often, vendors are “boxed in” when providing product demonstrations. This is intended to simplify comparisons but it can also lead a selection committee to minimize the value of other factors like industry specific functionality, extensibility, integration or usability. Carefully define the scope of your ERP project based on the current needs of the company. This will allow vendors to be more detailed in their proposals. However, vendors should also be allowed time to showcase the completeness of their strategy, portfolio of solutions and associated roadmaps. This will allow your team to fully consider each vendor’s potential as a strategic partner.
Align teams early on and augment when necessary. Make sure a clear and concise charter for the project is documented and supported by the full internal team, including C-level officers. Align with corporate decision-makers early and involve a cross –section of teams in the evaluation committee. Consider the assistance of selection consultants to shore up the competencies of internal times. This expertise can prove invaluable in the early stages of your selection process.
Get specialized treatment. Select an ERP solution that fits the specific needs of your vertical industry. Choosing a solution which already contains functionality to address industry-specific requirements, terminology, and regulations will help reduce the need for costly modifications.
Be open to change. Avoid customizations at all costs. They cause your ERP to be difficult to upgrade and support. Consider instead that you can adopt standard processes and change your internal business practices. By adopting the best practice processes of the ERP, you will take advantage of experience and the efficiency that comes with an integrated solution.
User experience reigns supreme. When choosing an ERP, be sure to consider the ease of use and the overall user experience in your selection criteria. A solution that is highly intuitive speeds the implementation process and reduces the need for initial and on-going training.
Utilize on-demand training methods. As you make your ERP selection and plan the implementation phase, allow for adequate training of personnel, but also explore the vendor’s on-demand training and support capabilities. Also, make sure that each new release will be accompanied by training and development so users are brought up to speed on the new functionality and its benefits.
Set realistic expectations. Do not try to rush through or skip necessary steps of a phased implementation. This can happen when the implementation is owned by people who were not involved in the selection process. The selection team members must be involved in implementation if the value they planned for is to be realized.
Communicate, collaborate and document. Be sure to keep track of decisions concerning your project’s scope, your expectations, and concrete deliverables. Collaborate with your ERP vendor on successful implementation strategies, taking advantage of lessons learned from previous successful implementations. Although no two ERP projects are exactly the same, you can often leverage tactics that have been proven to work along with vendor specific implementation toolsets.
Consider TCO and growth. Make sure your vendor has the team in place that can help you examine the total cost of ownership of proposed solutions. ERP selection should involve executive level conversations weighing such factors as infrastructural investments, current support costs, business agility and growth.
Move beyond functionality. Capabilities like mobility and cloud promise many new ways for employees to engage with business applications and each other according to their own schedules. This brings in to play additional evaluation topics including data security, network requirements and upgrade policies to name a few.
Define flexible. Newer solutions are supported by flexible, user defined workflows, screen configurations, analytics and reporting tools that require no involvement from IT resources.
Whether developing a product for a highly demanding market, adding high-value services or specializing in made-to-order quality products, a flexible ERP solution allows organizations to focus on the details that matter most to customers. As you seek new revenue sources and ways to attract new customers you’ll appreciate the ability to focus on these important differentiating aspects — speed, quality, innovation and service. Select an ERP that will support your current needs while providing a platform for growth.
Larry Korak is the Industry & Solution Strategy Director at Infor.