The Logical Steps of a Successful ERP Selection… and why it often takes so long
As experienced suppliers of ERP solutions, we understand the importance of a thorough selection procedure. Our senior salesmen, Jan, Johan and Joris, have more than 80 years of experience in the ERP and IT world and have learned that a careful approach is essential. Together in this article they discuss the logical steps that companies must take for a successful ERP selection.
Preparation and Strategic Planning
The first step involves the preparation and strategic planning for selecting an ERP system. This involves laying a solid foundation for the entire process and is often wrongfully overlooked or underestimated. It starts with an in-depth exploration of the company’s goals and needs. The focus is on formulating a clear vision, involving relevant stakeholders, drawing up a realistic budget, putting together the right team and establishing selection criteria. This lays the foundation for successful selection of an ERP system, which will ultimately contribute to improved efficiency, cost savings and increased productivity for the organization.
Step 2, is a pivotal phase where we deeply explore the organization’s operations. This involves scrutinizing existing processes, engaging stakeholders to understand their challenges, and pinpointing areas where an ERP system can enhance efficiency. By grasping the organization’s specific goals and shortcomings, this step sets the foundation for choosing the right ERP solution. It’s about fostering dialogue, gaining insights, and ensuring that our eventual selection aligns perfectly with the organization’s needs, aiming for a fruitful partnership rather than just being a supplier. Ultimately, this phase acts as a crucial link between strategic planning and the actual selection of an ERP solution, facilitating an effective implementation.
In Step 3a, the focus is on conducting thorough research on potential ERP system suppliers. The goal is to strategically narrow down the selection to a few suppliers to enable deeper evaluation. This approach emphasizes close collaboration with these selected suppliers to assess not just technical capabilities but also their willingness to align with the organization’s vision.
RFI and RFP
Step 3b involves creating Request for Information (RFI) and Request for Proposal (RFP) documents after choosing the limited number of suppliers. The RFI delves into understanding suppliers’ backgrounds and experiences, while the RFP asks for detailed proposals on how each supplier plans to address the organization’s needs. This process is iterative and collaborative between the organization and suppliers, aiming to align strategic and operational aspects for the best fit.
Both steps emphasize collaboration, strategic alignment, and in-depth evaluation to ensure the selected supplier becomes more than just a vendor but a strategic partner aligned with the organization’s goals.
Demos and Evaluation
In Step 4, after gathering RFI and RFP documents, the focus shifts to bringing theoretical concepts to life by inviting selected suppliers to present demos of their ERP systems. These demos aim to assess practicality, user experience, and system adaptability to meet customer needs. The emphasis is on a “look-and-feel” experience, exploring specific features or processes to gauge effectiveness and ease of use. Interaction during demos allows for in-depth discussions, addressing technical, cultural, and operational aspects. Following the demos, thorough evaluations are conducted jointly with customers, weighing technical functionalities, scalability, supplier cooperation, and alignment with long-term organizational goals. This phase refines options, guiding the informed decision-making process for selecting the ERP solution that best aligns with the client’s vision and objectives.
Step 5 involves evaluating the financial aspects of ERP systems. This includes assessing not just initial costs, but also long-term expenses like ownership costs, licensing, implementation, and ongoing support. It’s crucial to create a realistic budget and consider scalability as the organization grows. This step ensures a comprehensive understanding of costs and benefits to make an informed decision aligned with the client’s financial goals.
Additionally, for solutions like NetSuite, which are true Cloud systems, the automatic upgrades and updates reduce the need for manual intervention, freeing up the IT department for strategic initiatives, potentially leading to long-term cost savings and operational efficiencies.
Step 6 involves making the final choice for an ERP system based on thorough analysis, considering technical aspects, practicality, finances, and strategic alignment. This decision requires consensus among all stakeholders for smooth implementation. As a supplier, the role is to provide support, information, and guidance to ensure an informed decision aligned with the client’s vision. This step is pivotal, setting the groundwork for the project’s direction by translating the client’s goals into a concrete ERP solution choice based on collective expertise and effort.
Prepare for implementation by optimizing existing processes. Fine-tune workflows for a smoother transition.
How long does such a process take:
The average turnaround time of an ERP selection process in weeks can vary greatly depending on the complexity of the organization and the project. In general, however, you can make a rough estimate based on the phases I mentioned earlier. Here’s an approximation of the average turnaround time in weeks for each of the key stages:
- Preparation and Strategic Planning (internal): 4-12 weeks
- Needs analysis (internal): 12-24 weeks
- Supplier selection: 8-16 weeks
- Demos and Evaluation: 4-8 weeks
- Financial Evaluation (internal): 4-12 weeks
- Selection decision (internal): 4-8 weeks
- Implementation preparation: 8-12 weeks
This gives a total of 48-92 weeks, which equates to approximately 1 to 2 years for the entire ERP selection process until the actual start of implementation. Please note that this is a general estimate and actual turnaround time can vary greatly depending on the specific circumstances of the organization and project. It is important to be flexible and take the necessary time to make an informed decision that aligns with the needs and objectives of the organization.
Can’t that really be done faster?
Speeding up an ERP selection process is possible, but it is important to proceed with caution and find the right balance between speed and thoroughness. Too hasty an approach can lead to missing important steps and considerations, which can lead to problems in the long run.
The process of selecting and implementing an ERP system involves several crucial steps. Initially, thorough preparation and strategic planning are vital to grasp the organization’s needs, ensuring the chosen system aligns with its goals. Skipping this step could result in a misfit between the ERP system and the company’s requirements. The subsequent phase of needs analysis further solidifies this alignment, preventing issues during implementation. Efficiency in optimizing business processes during preparation is key, though time-consuming; careful planning and resource allocation can expedite this phase without compromising long-term performance. However, for a quicker turnaround, additional resources like more staff or consultants might be necessary. Clear communication and stakeholder engagement remain pivotal, even in accelerated timelines, to ensure project success.