How to select, compare and evaluate the right ERP vendors for your business or client's needs
Searching for ERP vendors that meet the needs of the business
Whether you are sourcing or procuring an ERP system for manufacturing, eCommerce, distribution, or education, finding the right ERP (Enterprise Resource Planning) system can be daunting, especially when multiple stakeholders are involved.
ERP systems help businesses manage an expansive range of business functions such as accounting, invoicing, payroll, warehousing, logistics, human capital management, and other additional industry-specific applications.
With so many ERP options on offer, selecting the right one for your organization can be daunting. Many companies underestimate the necessary process of doing their due diligence in choosing the right ERP system. Organizations often settle for the less than perfect option, working around the system's shortcomings. Well known ERP disasters indicate that this ends up costing more in wasted time and workarounds. When the perfect match is made, ERP should be a positive force for business transformation and give your organization a critical competitive edge.
How to select, compare and evaluate ERP Vendors according to the needs of the business
1. Conduct a process review and analysis.
Before you dive into the ERP evaluation, consider your software selection process. Research and define and document your current business processes, pain points, and strengths. Before you commence the ERP vendor selection process, you need explore your current technology evaluation process.
2. Identify and collaborate with key stakeholders to gather requirements
Identify the key stakeholders who need to contribute the the ERP evaluation requirements. Finding an ERP system that works for the organization requires collaboration with these key players to ensure high user adoption later. Skipping this step may cause you to miss a key requirement or functionality that key departments need. Including these voices in the technology evaluation process will deliver high user adoption of the ERP solution after implementation.
3. Determine the ERP requirement and evaluation criteria
Thinking about your current business processes will help you work out exactly what the organization needs from a new ERP system, how it will fit into the company and what technical and functional requirements are needed to carry out your day-to-day operations of the business.
The idea at this stage is to build a clear picture of how your business currently operates, and how those operations could be improved.
Ensure that all relevant stakeholders collaborate to do this, and that each requirement is well-written and clear. Later you will use these requirements so that potential software vendors can demonstrate their product's capabilities within the context of your business needs. Consider how a potential ERP software solution will work within your company's current infrastructure.
4. Search the market for ERP vendors that meet your selection criteria
The next phase in the software selection process involves actually starting the search for new software. Your key stakeholders should be involved in the search for potential software vendors that might meet your evaluation criteria/requirements. Look for vendors that offer solutions that meet your requirements and that have the ability to solve the company’s identified problems. Even though looking at a long list of vendors and comparing them to your needs is long and tedious, it is necessary to find the right solution for the business needs. You can use a technology evaluation platform like Olive to automate this process, rather than risk human error in spreadsheets, and searching through emails.
5. Compare ERP vendors to your requirements
Through the traditional RPF Process, or by inviting vendors to respond directly to your requirements in Olive you can compare vendor responses to the needs of the business. Often when comparing vendors, you may create a scoring system or scorecard in spreadsheets to quantify how well each vendor measures up to each other and the project requirements. Olive automates this work.
Once they respond you should have a few shortlisted vendors that you can invite to demo. Compare the remaining vendors to your selection criteria to see which best fits the needs of the business.
Be aware of bias during this stage. Software sales reps will always try to bias the decision in their company's favor, so it's essential to be aware of this when reviewing vendors. Hidden costs and risks associated with purchasing their software may arise after the deals are signed. At this point, you must do your due diligence to uncover "hidden costs" associated with ERP systems, including implementation costs, hardware upgrades, backfilling your project team resources, software maintenance, limits to the number of users, etc.
6. Develop an Implementation project rollout plan
Remember that vendors are trying to make a sale, so make sure you dig deep into implementation duration estimates with them. Develop an implementation project rollout plan that includes activities required to install the software, along with necessary actions to ensure that the solution is tested, actually works, and is accepted by end-users. Do this before you choose a vendor, so you understand the resource cost involved for project success. This plan should include everything from business process and workflow design to data migration, multiple test iterations, and critical organizational change management activities.
7. Measure the benefits against the costs of the new ERP system
Your client or organization might be looking for an ERP system to reduce costs, increase revenue, or scale for growth. Measure the benefits against the system's costs so you can understand the full potential of the new ERP system.
Removing Bias from the ERP selection process
Googling the Best ERP system will deliver results based on other companies' needs. There are more than just a few "Best ERP solutions" on the market, and one of the 70+ niche solutions may be much better for your company's requirements. Don't choose based on a brand name or what your competitors have. Consider the options that are going to best meet your unique business requirements and sources of competitive advantage.
Asking colleagues, employees, and other contacts what they use or recommend for a company like yours will deliver a biased result. No matter how confident they are, they cannot know your organization's individual needs or be able to consider and rank those needs against your business objectives. Many will research on the internet or hire an ERP consultant when looking for the best ERP solution. Keep in mind that many vendors pay to participate in some of these well-known software evaluation spaces.
Selecting the right ERP software can be a collaborative and innovative process
Using Olive's collaborative portal and use case libraries, companies can ensure they identify and manage all stakeholder needs, getting broader and deeper than ever before and ensuring everyone has a voice in the decision. This collaboration and agility speed up stakeholder management gets you out of spreadsheets and allows you to drill deep into your specific requirements.
Olive is a software evaluation platform that's efficient and free of bias, revolutionizing the process of buying and selling technology. Because Olive is the only software evaluation platform that does not charge vendors, so you can ensure you will find the best ERP solution for your needs, without bias.
Make the best decision on an ERP system, faster than ever before
Using a tool like Olive takes the best digital transformation practices, shortens the process, and puts it all in one platform. Using Olive, you can be sure that your organization ends up as one of the ERP success stories rather than one of those well known ERP failures.