Topic: General Posts

Subject: Best Practices for ERP Selection
Allen Bishop
Member: 2003
Submitted on 06-21-12 9:28 am
I may soon be involved with selecting an ERP system for a small manufacturing company. I'm looking for some guidance for best practices in the selection process. Rather than comment on preferred systems or those that are not adequate, can anyone provide guidance on the selection process itself?

I've previously been involved in ERP selection processes that were not complete. Much subjective opinion, individual preferences or response to a compelling demo seemed to be the drivers. I'm looking for a solid methodology to select the best ERP available given the needs of the business.

You help is much appreciated.

Allen Bishop
Houston Chapter
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Al Cogossi
Member: 2001
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 11-20-12 3:52 pm.

Always do your homework as cited in the previous posts. I would add that you do not let the 'tail wag the dog" by that I mean the accounting and financials are plain vanilla across most industries and are easily customized to meet your needs. The manufacturing side of the busines is where it all happens and the software must meet the needs of your users and processes. Otherwise....

Al Cogossi
[email protected]
Rob Caso
Member: 2001
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 11-29-12 11:23 am.
Allen - just a couple comments on the ERP selection and a few OT comments on implementation. I have been involved with large scale SAP and other integrated pkgs as well as conversion from out of date systems to newer small packages. I am a finance/CFO guy and not a computer geek, so I will speak from a practicality standpoint. I have read the comments you have rec'd so far and they are very good and won't repeat these.

First, I have never seen a "bad" software demo from a vendor. I almost would not waste your time with these. When it comes to accounting and finance, if you seen one, you've seen them all. if you do decide to go through with these as a matter of due diligence, only seek them from the "short list" vendors.

Second, the accounting and finance ERP side plays second fiddle to the needs of the business. Get the software that supports the business - usually it will contain a decent A&F function. A&F should never be the driver.

Third, use the "total project" concept in evaluating cost. Too often people only focus on their favorites or the known/obvious costs. In the Pharma industry in which I work, integrated software implementation has far reaching effects on legal, regulatory and other costly areas the effects upon which are oftentimes evaluated too late and throws the whole thing out of budget. More good ones are training, process documentation, post implementation fix ups, SOX etc....

Fourth, never listen to anyone that says your IT/personnel/costs will go down after the implementation. In 30 yrs, I have never witnessed this.

Fifth, a good project manager is key and it has to be someone who is no BS.

My one off topic accounting and finance recommendation is to never, ever, ever under any circumstances attempt to transfer detail accounting information over to the new system. Transfer balance information only. You will have many who will insist that this must be done - do not do this under any circumstance....

Rob Caso
Member: 2001
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 11-29-12 11:31 am.
One more important one that I forgot....

Never attempt to alter canned software, esp SAP. The history books are littered with co's that have attempted to do this, failed and wound up dumping a multi-million dollar in process install. Use the software as is and agree to change your business to fit the software - all of mgt must agree to this otherwise you will have a mess. Most pkgs have the so called "best practices" built in so you will be changing the way you currently do things to more than likely a best practice. If you try to change source code, wo unto thee.....don't do it.
Jon Ferguson
Member: 2010
Posts: 2

Subject: Re:Best Practices for ERP Selection

Submitted on 12-05-12 11:34 am.
Great topic. We are currently undergoing an ERP system evaluation and are in the final stages. As the Controller of a mid-sized ($50+ million) wholesale distirbution business I've taken the lead on this project. I've been a part of a few ERP systems selection and implementation projects in the past and have had management responsiblity over one of these before. There has been good advice given, all aparently based on experience. I'll outline for you here the approach I have taken:

1) Secured top management/ownerships support for the project
2) Identified the need/reasons for making a change and prepared a list of requirements
3) Reqeusted a budget from ownership, but ownership declined to provide asking that I simply bring to the table for thier consideration what I viewed to be the best solutions availabe to meet requirements at a reasonable cost.
4) Identified potential solutions (limited initial list to 10), considered both integrated ERP Solutions and a Best of Breed solution. I used the following resources to identify potential solutions:
- Industry periodicals
- Leads from trade-shows, webinars, employees, customers/vendors/competitors, friends/family
- Info-Tech Research Group - Vendor Landscape: mid-market ERP Report (found online)
- Google search for "Top ERP Systems for Wholesale Distributors" - lots of good information and comparisons available on-line to help identifie functionalty of softawe and help you narrow down list
5) Prepared a New ERP System Review, Selection & Implementation Plan and presented to ownership. The plan contained the following:
- Explanation of selection process of the 10 solutions selected and a willingness to expand list based on anyone else they wanted me to consider (they requested that 3 more be added ato the list)
- Recommended software evaluation selection criteria which consisted of the following four criteria:
1) Software functionality - can it meet our current and future requirements
2) Support - is there good support for installing adn maintaining software, including development
3) Stability, long-term viability of the company (strong business partner)
4) Cost - installation & recurring
- List of System Requirements and asked that they confirm and adjust as needed, which they did
- Propoased ERP System Evalaution Grids to be the basis for comparing alternative solutions and narrowing down the field of solutions to the top 3. Three grids prepared: Summary Grid, Functionality Grid & Vendor Support/Stability Grid.
- Request for Proposal (RFP) to be prepared and sent out to identified solution providers with information received back to be put in comparison grids
- Meeting to reveiw comparison grids and rank solutions, selecting the top 3 for further consideration
- Scripted software demos from top 3
- Customer reference calls from top 3
- Meeting to make final selection
- Timetable for completing the above and target date to start implementation
6) Secured agreement on the Review, Evaluation & Implementation Plan
7) Sent out RFP's to 13 solution providers, got responses from 10 and of those 10, 2 eliminated themselves from consideration stating that they couldn't meet our requirements after initial discussions with them regarding thier RFP response. Note: RFP included background informatin on our company, our requirements, selection criteria, the fact that we intended to select 3 to further evaluate and next step if selected and a timetable for making our decision.
8) Ranked solutions and selected top 3
9) Selected evaluation team of 5 which included key users
10) Formally responded to all that submitted RFP's that we'd narrowed the list to 3
11) Sent scripted demos to selected 3 and scheduled and conducted on-site demos (secured confidentiality agreements before doing so, this allowed us to have them use our customers, vendors and items in preparing thier deomos and reduced the time to prepare and send the information for the demo).
12) Secured customer references to contact
13) Asked for best proposal/quote (asked for initial estimated cost in RFP, so provided opportutinty to adjust following demo and further scoping sessions)

So far the process has worked out well and we are on-track to finish customer reference call and secure best quotes and make a decision by mid-December.

I'd be happy to provide any further information regarding the above process, including documents prepared and used if it would prove to be helpful. I've noted my e-mail address below

Jon Ferguson
[email protected]
Bruce Lynn
Member: 1998
Posts: 68

Subject: Re:Best Practices for ERP Selection

Submitted on 12-05-12 12:07 pm.

how long / how many man hours did the process require including finding vendors, preparing and reviewing all RFP responses, demos, etc. ?

I suspect it was a fairly lengthy period??
Hung Do
Member: 2012
Posts: 9

Subject: Re:Best Practices for ERP Selection

Submitted on 01-04-13 7:00 am.
When selecting an ERP system, don't forget to consider its reporting and Business Intelligence (BI) companion. That is where the value is. ERPs are nothing more than data warehouse. They are transactional data collection. To fully realize the ROI of the investment, you can't neglect the reporting and the BI component.

Jay Osper
Member: 2008
Posts: 1

Subject: Re:Best Practices for ERP Selection

Submitted on 01-13-13 12:12 pm.
Having gone through two SAP and one Oracle implementation I can tell you that Jon & Rob's commentary is spot on.

One thing to consider is having the software company provide you with other companies that have implemented their product and arrange a user group meeting. Strange as it sounds I have found that as long as you're not direct competitors but similar industries other companies will offer input/guidance to their implementation and their overall satisfaction.

Demo's are demo's, like taking a new car for a test drive, everything looks, smells and runs like new. You need to see what it looks like post implementation.
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