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Common ERP Selection Mistakes

Table of ContentsCommon ERP Selection Mistakes 3 - 8

Incomplete or Unused RFP Document 3

Lack of In-Depth Vendor Comparison 4

Vendor Browsing 5

Focus on Total Cost 6Focus on Added Features/Flashiness 7

Underestimation of Time/Energy/Resources 8

ERP Selection Mistakes | 3

Incomplete or Unused RFP Document

PRO TIPIf you really don't need such an in-depth document, consider a Request for Information (RFI) or Request for Quote (RFQ). Both of these will give you beneficial information to assist in your selection.

One of the most effective ways to help better understand both your own business’s needs and the offerings of an ERP vendor is by building a Request for Proposal (RFP) document. This document gives you a chance to dig into the needs of your business, the purpose for implementing a software package, and get to know a vendor on a much more detailed level than simple website information or a conference call. In addition, you’ll be able to compare RFP documents from each vendor to see which one is the best match for your business’s needs.

Specifically, an ERP RFP document must be comprised of the following:

• Company background• Clear timelines• Clear budget• List of accurate criteria for final selection• Short and concise• Focus on needs, not wants• Do as much as you can without a consultant

Lack of In-DepthVendor Comparison

Know the discreet details of each ERP’s product and support services. Many companies simply overlook comparing various vendors because they believe they’ve found the one. Never settle on enterprise software without considering all of your options.

Compare and contrast RFP documents, if utilized, or set up identical conference calls or demos with various software providers. In addition, create a list of questions that can be asked to all vendors in competition for your business. You'll be able to get a better understanding of the right answers and the wrong ones, and narrow down your options much faster than simply looking at one or a few.

ERP Selection Mistakes | 4

PRO TIPOften, ERP vendors say one thing and provide another. If you're not willing to dig into specifics across a variety of vendors, you're likely not ready to make a major implementation decision.

Vendor Browsing

When you’re first looking into implementing an ERP software package for your business, it’s certainly useful to browse through a variety of providers. However, you’ll need to dig much deeper in order to find the software provider that meets your business’s needs.

Vendors aren’t able to say in complete terms exactly what they provide on their website, so it’s important to be inquisitive into beyond simple facts and information about the provider. This can include building an RFP document, setting up a free trial and free demo of the software, and scheduling conference calls with the vendor.

If you are going to rely on vendor browsing, at least initially, do the right research. An important factor to consider is user-generated reviews. Take a look at these to get a better understanding of the positives and negatives of each vendor. And don't go into it thinking you'll find the perfect software vendor -- each will have their negative reviews to weigh.

ERP Selection Mistakes | 5

PRO TIPWhen seeking an ERP solution, always ask for at least 3 references. Have a list of questions ready for each of them, focusing on what went right, what went wrong, and what they'd do differently.

Focus on Total Cost

Understanding the total cost of an ERP software package is essential, but placing its value over other important factors can be deadly.

Often, software from a certain vendor can cost slightly more than competitors for a variety of reasons:

• Higher-quality support services• More features• A more robust software package• Compatibility with other software• Simply a more refined software

Consider other factors beyond cost when looking at an ERP implementation; choosing the wrong vendor due to lower costs can hurt you later on during the onboarding process or afterwards, and you'll end up regretting the decision. Enterprise software is a major investment, and one that's not worth saving a few pennies to get a lower-quality software package. It will not only affect you and your business but the employees that rely on the software to accomplish job

ERP Selection Mistakes | 6

PRO TIPCost should never be what hinders you from looking into an ERP vendor, or even what motivates you. Support, customer service, features. These are all factors that should be weighed first and foremost.

Focus on Added Features/Flashiness

Don’t let vendors distract you with flashy, over-the-top features. It’s often a ploy to get you distracted from the cost or other necessary features that may be missing. While extra “stuff” is great, it’s imperative to look at your business’s wants and needs. Establish the needs, then add the wants if possible.

Ask questions throughout the vendor selection process to avoid getting distracted by any additional, unnecessary features. Below are a few questions to ask:

• What kind of training is required to get our users up to speed?• How long will the implementation take, and what will it entail?• How will your software help us make better business decisions and help generate more revenue?• What additional modules are available that can be added in the future?• Is the software customizable?

Keep digging and learning more about the vendor to find out exactly what they offer for a price; many added features cost extra, so you’ll need to find that out as well.

ERP Selection Mistakes | 7

PRO TIPMake a clear list of ERP software requirements for your business. Anything else that's "extra" should only be considered after a vendor has been found that meets your basic needs.

Underestimation of Time/Energy/Resources

TimeSelecting an ERP vendor should never be a quick process. Expect to give yourself a lot of time to browse over RFP documents, analyze various competitors, and interact personally with both the support team and the software. Never rush into an implementation of this size.

EnergyDoes everyone on your team really have the motivation necessary to pull off an implementation successfully? If not, then you might want to reconsider. Bringing on a major software package such as ERP requires complete buy-in and excitement for the project. Without the necessary energy, your onboarding is likely to be unsuccessful. When looking for a vendor, be sure everyone is on the same page before making a final selection.

ResourcesHave you allotted enough resources to be able to handle the selection process? This can include preparing a selection committee and implementation team which will help keep the process as organized as possible. Establishing resources can also encompass cost, specifically the number of employees that will be focusing less on work production and more on the vendor selection.

ERP Selection Mistakes | 8

PRO TIPEstablish a committee that will handle the process of selecting a new software package. This will help create healthy dialogues and ensure various perspectives are being utilized.