ERP Software Selection Best Practices: What are your 3 tips for selecting an ERP software?

Most important, understand your own needs and match them against potential vendors' offerings. Every ERP vendor has some particular sweet spots where they are strongest -- for example, vendors can aim their products at large companies (or small), process manufacturing (or discrete), regional businesses (or global), and so on.

If you don't get the right product "fit", you may end up trying to shoehorn a round peg into a square hole, which can lead to disaster.

Beyond the software itself, find service providers that understand your specific business. Ask the integrator about directly relevant industry experience. This is even more important if your business or industry has specific requirements that are unique. You don't want to pay the consultants for on the job training; better to find the right folks from the beginning.

1. Make sure that you know, in detail, what business problems you're trying to solve through the use of ERP. This takes a multi-departmental approach.

2. Identify some early adopters in your end-user group and involve them in the process.

3. If a possible vendor shows you his product before trying to learn your business processes, process flow, and challenges, run, do not walk, to the next vendor on the list.

In my opinion, the best "best practice" is to make sure that whatever tools and methodologies you're using for research, evaluation and selection are adapted to your specific needs.

Which means that the first important step is to clearly understand the needs of your company (you would be surprised to see how many people don't know or decide to ignore this)

Our 3 Tips For Selecting ERP Software For Small and Midsize Businesses Include:
1. PICK THE "WHO" and the "WHEN": Secure management support and select a product champion. Major technology changes always start at the top of an organization -- CEO's and company Presidents should have blessed this project before you begin.

Name a project champion. This individual will head the selection and evaluation project.

Name additional project team members, and determine who will make the final decision. The final decision maker is the individual authorized to make a purchase.

Establish a rough idea of budget and decide the fiscal year in which the investment will be made.

Decide when you want to go "live" on your existing software, and working backwards determine when you'll need to make a final software decision. You can use the following timelines as a minimum guide:

Allow 2 months for selection, evaluation and final decision.
Allow 2 weeks for establishing financing.
Allow 2-3 months for software installation, process reviews, implementation and pilot.
Allow 2 weeks for final configuration and training.

Conduct an analysis with all major department heads to understand their basic business processes, and gather all major functionality required. Document as you go, as this will be helpful when working with a software partner.

Determine priority of requirements and functionality, and have a rough idea of what needs to be in phase 1, and what can be put into a phase 2, 3, etc.

2. PICK THE "WHAT": Prepare a list of eligible, qualified software and partners. Contact these partners and be prepared to answer basic questions about your business, your current technology infrastructure and your future requirements. Most will conduct an onsite discovery call to learn more about your business.

Establish the right audience for a product demonstration, including major department heads and senior management.

Discuss implementation strategy and issues.

Determine software requirements, user definitions and estimated cost.

Determine hardware requirements, user definitions and estimated cost.

Prepare an apples to apples comparison of all software prices, implementation strategies and partners. Establish ROI.

Trim the list of qualified providers to your final 2, or final choice and perform reference checks.

Schedule final evaluation meeting with partner(s) and final decision maker to ensure you agree on a solution and direction.

3. PICK THE "HOW": Final Decision and Implementation

Make a final decision on software and partner.

Work with partner to obtain a final proposal including project scope and obtain the end user license agreement.

Schedule an implementation kick-off meeting.

1. Find an internal or external expert who has worked with atleast 2 different ERPs and has also spent time in a functional role. Someone who has been on both the sides of your fence and does not have any vested interest in any vendor's solution.

2. Build a list of your needs / expectations first completely internally and then with the help of this "expert". Try to segregate this into
- Critical : things needed in the first round of implementation
- Nice to have : things which can be build later
- Exclusion list : things which should not be attempted (though they are needed)
The third part is as important as the first one as it helps up in drawing boundaries and setting right expectations

3. Be ready for a long and challenging journey - commit enough resources both financially and managerial time. It is not a website development project and will make or break your business.

1. Functionality
2. Price
3. Time of implementation
4. History of bad support
5. Complications on upgrades

1. Understand and document your processes and needs. Know and highlight the difference between which processes can be accomplished with an industry standard approach, and those that are unique and potentially differentiate you from your competition, or at least will require you to find vendors that can support that unique need. This list of unique differentiating needs is what should drive the formation of your "short list" of potential vendors.

2. Understand your organization's system maturity and the experience base of your users. It does not make sense to buy top shelf, sophisticated ERP software that will functionally work if your users do not understand what they are doing. Form a focus group of users that is representative of your organization and involve them in the process. Think of the CMM model and apply it to your organization and use of sophisticated software systems.

3. Focus vendor demonstrations and solicitation of reference clients on those that are using the features that are on your list of unique differentiators. Visit reference sites and see the system in operation, especially as it pertains to the use of the key differentiating features.

A successful ERP selection project means finding a system that fits a company’s business (and not vice-versa). When selecting ERP, a business should focus on three keys: people, systems evaluation and contracts negations.

1) Involve the right people. Management and key departmental users should be active participants. They’re in the best position to evaluate whether a system can support key business processes. Also, if your company doesn’t have an internal IT industry analyst and lawyer on staff, it should think about hiring an independent selection consultant that fits the bill.

2) List and evaluate the systems. First, you should draft a list of systems that could potentially serve a company like yours. Then, you should short-list the systems that can actually serve a company like yours at the right price-point. Demonstrations are where the vendors put rubber to the road. You should take advantage of this opportunity to have the vendors show you how well their respective systems handle your business’ key processes.

3) Negotiating the contracts. Having an IT-analyst and IT contract-savvy lawyer on the roster is a big benefit. This type of person can help your business negotiate deals that most never achieve. In some cases, well-seasoned negotiators can negotiate concessions of up to 90% of listed, license prices.

Here are four tips to consider when selecting and planning your ERP software solution:

1) Use a Risk-Based Planning Approach for your new ERP Project - Seek the right balance between "How rigorous a procurement process is prudent for your organization?" and "How much work do you want to create for yourselves?" Depending how simple vs. complex your business needs and project risks are, either a top-down (more issues/ exceptions-based) or a bottom-up (more comprehensive) software evaluation and solution provider selection approach will be more appropriate and cost-effective.

2) ERP Projects are Change Management Projects - Not Technology Installs. At their core, ERP projects are fundamentally people-driven change management projects intended to improve cross-functional business processes. Just throwing your users the keys to a new technology product will not spontaneously result in the business improvement desired. Doing so will just result in one more under-utilized system. To be effective, new software implementations need to also include the user engagement and knowledge transfer required such that users understand not only their own role but the roles of others and how what each does affects the others up and down a given process chain. This more comprehensive people, process and technology implementation approach is critical to enabling high user adoption and proficiency, feature utilization and post go-live self-sufficient solution operation.

3) People-Driven Implementation Tasks Are the Highest Cost Driver - Arguably, the required tasks and work effort of implementing any ERP solution successfully are nearly the same for any leading product when deployed by a competent vendor. Indeed, the required work is unavoidable; there are no real short-cuts without increasing project delivery risk. It is also true that the vast majority of this work (50-66%) is made up of people-driven tasks that are entirely independent of the particular ERP product selected. These tasks include project management, requirements analysis, solution design, data migration, user training, UAT, deployment, and general Q&A support throughout the project. You should know that for sales reasons vendors purposely make very different assumptions in their proposals about how much support they will provide for each task. If the provider is silent on a task or has a lower estimate than others, rest assured they are assuming you will do it or do more of it as needed. That can all be fine, but just know what you are signing up for. So, while all vendor implementation approaches should be the same and the actual work effort will end up near the same, you should know they are never bid the same.

4) There is No Such Thing as a Standard ERP Project - While there are similarities and best practices that can be applied, every project differs on both a business and a human level. On the business level, every company's specific needs, stage of growth, and circumstances differ even within the same industry segment (just as their business strategies differ). On a human level, every project sponsor, project manager and key stakeholder's temperament, familiarity with ERP solutions, skill set, aptitude, and expectations differ, along with the organization's collective willingness and capacity to change. Considering all these factors, it highlights the need for well-defined and understood expectations on the implementation approach upfront. It also warrants spending the time needed to review each vendor's implementation approach and assumptions to ensure their "standard" approach really does meet your needs.

Summary - Focusing on how your new ERP will be implemented is as important as what ERP product you choose. Not all vendor implementation proposals are the same. Make sure you know what you are getting and not getting. Become an informed buyer to assess the fit of both product and implementation approach in order to select the right ERP solution for your organization.

Choosing the right partner is crucial for a successful ERP implementaion. To avoid making a mistake, you need to do your homework

1) Check your Solutions partner experience

• Are they well-versed in the unique needs and “pain points” of your industry?
• How many years have they been in business? How large is their client base?
• Can they provide case studies of their engagements?
• Have they worked with systems similar to yours?
• Have they written custom reports in your industry?
• Will they provide references of current clients?

2) Check your Solution Partner’s training and support resources.

Make sure there are at least three consultants on staff, are fully certified and receive product education annually. To control the cost of training new hires, make sure the reseller has at least one resource dedicated to phone and remote support.

3) Check your gut.

To determine your comfort level with potential partners, ask yourself: Do they communicate clearly and effectively? Do they respond to requests quickly and thoroughly? Do they understand the unique demands of your industry? Can they explain and demonstrate technology in language all employees will understand? Are they open, and friendly?

1) Flexibility – choose a system that is easy to integrate and connect with other systems. Also a system that has many ISV/add-on applications available to add functionality you need without expensive customization. Be careful when looking at industry specific niche products. They can seem like a perfect fit for your specific needs, but you can also get trapped in a system that is not flexible.
2) Partner support – choosing the right partner to install and support your system is one of the most important things you can do. What is their track record and experience? Check their current financial stability.
3) Good customer community - Choose a product that lets you part of a community with customer events, forums, user groups and other ways you can communicate and learn from other users.

1) Answer what the company exactly wants to do. Realistic objectives. Define the perfect Process Model according the objectives through a BPM policy (Business Process Management), that first of all, with consultants and people form the company involved in the project..

2) a. Select the team that will select the ERP according to the needs of the step 1.
b. What about the tools? So many to choose in the market and the open source community.
3) Following up the project and create an testing environment to check the errors. Finally get the approval of the final users and directors that everything is going well.-