Selection Of ERP Application... Questions to Ask...(6)

Part (6) – Selection Process


1. Create a “Selection Team,” and communicate why (Section 2) a new
accounting/resource planning application is being sought. Identify a “Key
Contact” who will gather information and communicate it among the team
members – most, if not all of who will serve as key decision makers.

2. Have the Key Contact become thoroughly knowledgeable about your
organization’s internal business needs. Create a budget (loose benchmarks
include: total software and implementation costs equate roughly to 0.5% of total
revenue; implementation, customizations, and training usually equate with 1 to
1.5 times software costs, depending on the size and type of organization, and the
scope of the implementation.)

3. Have the Key Contact become knowledgeable about potential software solutions
(applications) and their abilities to meet the needs identified in Section 3. (Do
this by reviewing web sites of both the software vendors and local resellers. Also
order information from local resellers – those with whom you will be working.)

4. Create a matrix that identifies how each application will solve the most critical
business needs.

5. Eliminate those applications that obviously won’t meet your needs. (Done by the
Selection Team or Key Contact.)

6. Invite representatives of the remaining applications (2-4) to present their solutions
to the Selection Team. (Provide as much detail as possible beforehand so they
can model transactions and business processes during their demonstrations. This
will offer a clearer picture and expedite decision-making.)

7. Demonstration: Evaluate potential solutions first- hand based on the criteria set out
in Sections 3, 4, and 5. Also evaluate the resellers you may be working with dayto-
day – ultimately they may be the distinguishing factor on determining success.
(see Attachment 1) Additionally, have them communicate their implementation
process –methodology. Therein you will find points of distinction from other
resellers. It will also provide an idea of how they intend to manage risk,
communicate, and achieve success. Finally, consider the questions asked. Are
they sincere and insightful, or is much of their time spent on selling themselves?


8. Not Recommended: evaluating software on your own. While this is tempting,
engaging in this activity may result in selecting the software most preferred by the
Key Contact, or the software that is most intuitive or familiar. These qualities do
not equate with the best solution for the organization. With accounting and
enterprise applications the total solution must remain the focus, and at this stage,
only the reseller can effectively communicate this to your organization. If they
cannot, then another firm must be considered.

9. Determine the top 1 or 2 providers. Invite them to submit a proposal with time
frames, cost estimates, and resources (people) they will devo te to the project.
(Don’t fall for a bait and switch – selling a highly qualified professional and
having them substituted with one that is less qualified. Know up- front who will
be working with your company.) Check the Reseller’s references in your
industry.

10. Have the Selection Team evaluate the proposals. If necessary, clarify, negotiate,
and modify. Make a decision involving all key decision makers. Identify a start
date.

Selection Of ERP Application... Questions to Ask...(5)

Part (5) – Performance Measurement/ROI (Return On Investment)


1. What metrics have been created to indicate a successful implementation?
2. Similarly, how will the return on investment be measured?
3. What is success, and what do you feel are the critical success factors to achieve it?

Selection Of ERP Application... Questions to Ask...(4)

Part (4) – The Infrastructure


1. What network platform are we running?
2. Is remote access important?
3. Is web-based ordering important?
4. Is EDI (electronic data interface) important?

Selection Of ERP Application... Questions to Ask...(3)

Part (3) – What to think of/Consider When Selecting a New ERP Application


1. Does your company have what you think are unique business processes or
accounting procedures likely requiring customization/modifications? If so, in what areas do
they reside?
2. Do you want a new application to support existing business processes or do you
want to do business in a new way?
3. What technology is the prospective application built on? Is it enduring, and
compatible with other applications?

4. What are the specific needs, if any, in the following areas:
1) Accounting (General)
2) Accounts Payable
3) Accounts Receivable
4) Administration (HR, Payroll, Facilities, etc.)
5) Auditing
6) Bill of Materials
7) Budgeting & Planning
8) Cash Management
9) Customer Service
10) Executive/Management Information
11) Fixed Asset Management
12) Foreign Currencies
13) Fund Accounting
14) General Ledger
15) Information Systems
16) Inventory Control
17) Job Costing
18) Material Resource Planning
19) Order Entry
20) Payroll
21) Point of Sale
22) Project Management
23) Purchasing

24) Receiving
25) Reporting/Report Writer
26) Returns
27) Sales
28) Shipping
29) Tax Preparation
30) Time & Expense Billing
31) Warehouse Management
32) Work Orders
33) Other
34) Manufacturing
35) Quality Management
36) Maintenance

Selection Of ERP Application... Questions to Ask...(2)

Part (2) – Initial Business requirements Assessment


1. Why is a new accounting or enterprise application being sought?
2. What critical issues are not being addressed in the current system that you’d like
addressed in the new system?
3. What is the name and version number of the application your company is running
currently?
4. How long has your company been running this application?

5. Is your company current on the maintenance agreement?
6. If not, why not? Was it a strategic decision or financial decision?
7. What outside firm assisted with the implementation, and are they still supporting
your company?
8. If you have support, is it local or remote?
9. How many users on the application (the total number of people accessing the
application)?
10. Has there been recent turnover of “power-users” – those who have historically
administered the application, or have been recognized and knowledgeable
authorities on its use?
11. Does your company have an approved budget for a new application and its
implementation? If so, what is the estimated range.
12. Is there a time line to 1) select a new application, and 2) to go- live with it?
13. Has an RFP (Request for Proposal) been created? (This is not a suggestion an
RFP is necessary. In fact, the contrary may be true.) If so, when and by whom?

Selection Of ERP Application... Questions to Ask...(1)

Part (1) – The Company Overview (to be used when speaking with suppliers, vendors, Consultants and Value Added Re sellers (VARs))

1. Type of business/industry/field?
2. Number of years experience in business/business specific field?
3. Annual turnover?
4. Number of employees/technical staff/Operation/other?
5. Number of locations/Branches/Representative Offices?
6. Names and roles of those deciding on the new application?

ERP Systems selection process...3

Main Factors for selection

• Features/functionality best fitting with organization's requirements.
• Architecture best fit with IT strategy/goals
• Vendor's reputation
• Vendor's ability to provide a complete solution 
• Application Price
• Vendor product/vision
• Vendor references generally
• vendor reference in the same organization business field 
• Advice from peers
• Previous experience with vendor
• Part of larger purchasing group that selected product
• Advice from consultant/industry analyst

ERP Systems selection process...2

Other Methods and ways to select the right ERP solution for your organization:

There are a lot of ways and tools to choose the right ERP application which is considered an asset to your organization, so you must plan well for the selection of your coming Asset.

ERP software selection can be a hassle, and one that is often not given the suitable attention. CIOs or other executives in charge of making such major decisions often make decisions based on perception, gut feel, or faulty information. For example, executives often choose ERP software vendors based on what competitors or other large companies have chosen. 


However, information such as this does not necessarily reflect what is appropriate or inappropriate for your specific company. Further, planning for a successful implementation involves more than choosing the right software; it also involves preparation to ensure that ERP enables measurable improvements to your business. 

In choosing an ERP software package and planning for the overall project, executives need to make decisions based on objective and unbiased information rather than gut feel. In particular, organizations should consider the following: 

Why Do you Want to Implement ERP? 


Unfortunately, this question is the toughest to ask once you're already on the ERP bandwagon. In many instances, ERP will not solve your business problems. If your business strategies or key business processes are flawed, even the most advanced ERP system is not going to help. Before making a decision as large as implementing a system that will cost millions and affect your entire company, it's important to have a clear understanding of what you want to accomplish by taking on this challenge. There may be more cost-effective and lower-risk options such as improving processes, redesigning your organizational structure, consolidating your global supply chain, or implementing a performance management system. In these cases, maybe choosing not to implement ERP is the best solution. On the other hand, ERP may be the business tool that enables these improvements. 

What are your Business Requirements? 


If you have decided that ERP is the route you need to take, it is important to begin by looking at your desired operational model and using that as a starting point in determining which software to implement. Executives should define and document key business requirements for any package they may select. This includes not only nice-to-haves, but also requirements that are "deal-breakers" if the software is unable to accommodate. In addition, executives should use ERP business requirements definition as an opportunity to improve current operations, efficiency, and effectiveness. The last thing a company should do is implement software to automate the same flawed business processes. Instead, it should be focused on achieving measurable business value for your organization, and you should choose the software the best enables you to do this. 

What is your Business Case and ROI? 


This is where many companies fall flat. Even if you complete the first two items discussed above, it is important to understand and document what your total costs will be for each ERP vendor under consideration, as well as your anticipated business benefits. This is important in gaining approval from other executives or your Board of Directors, and it is also helps ensure that you realize the potential benefits of implementing ERP. All costs, including hidden project costs such as internal project resources, data conversion, and lost productivity immediately following go-live, should be included in the business case and ROI calculation for each ERP vendor you evaluate. In addition, benefits should be reasonable and not overly aggressive. Ultimately, your business case should be a tool to manage business costs, benefits, and ROI going forward, not just as a sales tool to justify a decision that's already been made. And if the resulting ROI for a particular ERP vendor does not make sense or meet minimum investment criteria for your company, then it's probably not a good idea to undertake the project. 

Who will Be Your Implementation Partner? 


Have you thoroughly assessed all of your options in evaluating potential external implementation teams? Software companies aren't always the best at implementing their software, and some are more expensive than others. You can often find third-party vendors and consultants that can implement ERP more successfully or at a lower cost. It is also important to look at consulting firms that are capable of helping you manage the non-technical aspects of the project, such as organizational change management, training, and ERP benefits realization. Panorama Consulting Group is an example of such a firm, which is technology neutral and specializes in providing project planning and business consulting for all types of ERP implementations. 

Do You Have Enough Resources to Commit to the Project? 


Even if ERP is perfect for your company and you have chosen the perfect software, things will deteriorate very quickly if you don't have enough employees to dedicate to the project. It doesn't matter if you have assembled the best team of consultants and implementation partners; it's your employees that will ultimately make the project succeed. 

What's the Contingency Plan?


No matter how well-run your project is, you should be prepared for failure. We've all heard of the technical glitches that shut down shipping at Fortune 500 companies for weeks at a time, so it's best to acknowledge that something bad could happen. If the project does fail or if the software is not implemented correctly, what is the backup plan? Will users be able to access legacy systems? Will certain processes be performed manually until the system is up? Dramatic failures are not common, but they do happen on occasion, so companies should be prepared for the "what-ifs." 

ERP Systems selection process...1

Selecting a right ERP system suitable for your organization can be time-consuming and risky — but with the right strategy and tools, you can turn your selection positively. Here are some steps to help you identify the best solution for your company.

1. Choose an ERP selection project manager
The first step for selecting an ERP system is to select a project manager from your organization to manage the selection process. In addition to coordinating the internal needs assessment and vendor evaluation process, the selected project manager will serve as the liaison with vendors.

The project manager will also create a selection team representing every area of the company (finance, sales, manufacturing, human resources, etc.).

If your company decides to hire an ERP consulting firm to manage the selection project, the role of the in-house project manager will shift toward overseeing the firm's work, co-ordinating interviews and meetings with key users and managers, and ensuring that each department's needs are adequately addressed.

2. Assess users' needs
When replacing an old system, it is important to identify features and functions that are desired in the prospective new ERP system that will increase productivity and provide quick and meaningful access to data. It can be very difficult and time consuming to identify desired new  functionality without help from a tool that includes a database of possible features.

3. Develop a customized RFP for your organization

Based on the specific features and priorities assigned by the selection team, you will be able to create a Request for Proposal (RFP).
  

4. Distribute your RFP to the software vendors

This customized RFP can be emailed to the vendors of your choice (you can even include your current vendor for comparative purposes, if you wish).

5. Rank vendor responses
Once all vendor responses have been received, the selection project manager can run numerous analytical reports that will rank the vendors and provide standardized cost comparisons.

6. Plan vendor demos

After vendors are narrowed down to a short list based on their responses to the RFP, you can schedule an on-site demo with the top scoring two or three vendors. Unless you have some input into the vendor demo format, you could become dazzled and confused by the vendors' demonstrations.

7. Schedule site visits

Aside from demos, it is a good idea to visit the sites of non-competitive companies who are using the prospective ERP system. Site visits allow you to see systems implemented in a real world environment with live data and actual users vs. the vendor's marketing staff. Members of your selection team will have the opportunity to speak frankly with their counterparts and gain insights into the benefits and drawbacks of each system.

8. Ask The Competitors

Ask all of the competitors (Vendors applied) about each other, this method will lead to a pool of information been collected and of course some of this information may be fake but others may be accurate and lead to know a lot about each competitor a lot of negative data that might not been known before from the vendor himself.

9. Consider other factors

Your final decision on which ERP company to select will be based on many factors besides functionality. Financial stability, reputation within the industry, and ability to keep up with new technology are among other considerations. Many of these questions can be answered in the RFP and then corroborated by your own research using business publications, trade journals, seminars and communication with others in your industry.