Lessons Learned From an ERP System Selection Project
By Jonathan Gross
Vice President and Corporate Counsel, Pemeco
www.pemeco.com
As we close out 2010, I reflect on an ERP system selection project that we're just now wrapping up in time for the holidays. The client runs a multi-site manufacturing and distribution business. It is a strategic supplier to big-box retailers and leads the market in its product category.
As with many North American companies, our client's business has shifted seismically in the last handful of years. Previously, manufacturing accounted for almost 95% of its business. Now, manufacturing represents a paltry 15% of its business, with distribution accounting for the balance. Given this business shift, our client questioned whether its existing ERP software had the bandwidth to support its distribution-focussed operations.
That's where we came in. We were hired to help our client find the right-fit software. For six months, we managed a due diligence project on prospective ERP software applications. Here are four key takeaways:
Map the business processes. By documenting its business processes, our client was able to see how future ERP software would fit into its business. This, in turn, allowed our client to develop software requirements based on its actual business process needs.
Give the vendors plenty of RFP response time. We managed the selection project according to an aggressive time-line. As a result of the short response period, certain vendors elected not to respond. They were incapable of allocating sales resources within the mandated time-frame. If clients have the flexibility, we recommend giving vendors at least one month to respond to an RFP.
Involve the key users in the vendor demonstrations. Our client did an excellent job in this respect. It made sure key users from all functional departments were involved. The key users scripted key business scenarios that the vendors were required to demonstrate. They also provided meaningful feedback on the demonstrations, from functionality and usability perspectives.
Use a seasoned IT contracts negotiator. Our client is leveraging our IT analyst and lawyer in its contract negotiations. We are helping the client achieve key monetary concessions. Equally important, we are helping our client negotiate the non-monetary conditions that affect its rights and obligations.
Your REQs (Relevant Experiences and Questions)
We've only listed a few of the key components to a systems selection project. What's important to your project?
- People?
- Evaluation Scorecards?
- Demonstrations?
- Vendor responsiveness?
- Reference checks?
