8 Steps to help ease your ERP software selection process:
Step 2: What Do I Need?
The Twentieth Century Way
In the twentieth century, it used to be common to hire a consultant, at a pretty hefty fee, to create a Requirements Definition document. This was usually a very thick checklist with some sort of grading mechanism to help narrow down the packages that should be considered. This document was sent to vendors who attempted to respond to it, some more honestly than others. This methodology had many flaws in it and is usually only recommended today by consultants who want to charge large fees for doing something that is only marginally useful.
The Twenty-First Century Way
Nobody knows your organization better than the people in your organization. You can hire a consultant to perform the following but for them to “do it right”, they need to observe and document all of the business processes in your organization. This is expensive and ERP Selector doesn’t recommend it.
Find someone in your organization that has been around for a while and understands how your business operates. They should understand the company philosophies and what makes your company unique compared to your competitors. They should be familiar with all departments within the business including any “special” personalities that need to be accommodated. They should also be able to have frank conversations with the C-level executives. If the C-level executives are not involved, the risk of implementation failure rises exponentially.
Ask each C-level executive the following questions in-person (not just an email). A 15 minute meeting is probably adequate:
- Why do we need a new system? What’s wrong with the old one?
- How is the existing system helping them to perform their functions in the organization? What are they getting out of the existing system? Is that information timely?
- In an ideal world, how could a fully integrated real-time system help them? Many C-level executives don’t have a lot of imagination in this area so you may have to prod them with suggestions. If they have managers reporting to them (which almost all C-level executives do), what could a system tell them to help identify problems before they happened or at least early enough to resolve the problems before they have an impact?
- Will they be willing to personally use an upgraded or new system, or is this system for everybody else? Will they allow information to be pushed to a tablet, phone, or workstation for them? Will they use an Executive Desktop type application? Will they use a CRM system?
- Enterprise Resource Planning (ERP) and Contact Relationship Management (CRM) systems are designed to be used by everyone in the organization. It is no longer appropriate to have data come back to someone else who tells the system that something happened. Will they support this concept in the departments they oversee?
Meet with each department and ask the following. It is best to have a departmental meeting, when possible, rather than just meeting with the department head or just meeting with a select group of people. The department head usually knows how things are supposed to work but it is common for them to not know how things really work:
- How is the existing system helping them to perform their functions in the organization? What are they getting out of the existing system? Is that information timely?
- What information are they entering into the existing system? Are they the initiators of the information? For example, is a sales secretary entering sales orders forwarded from a salesperson or are the salespeople entering their own orders?
- Why do we need a new system? What’s wrong with the old one?
- What’s unusual about the way they do their job? This is probably the most important question and sometimes the hardest to get answered. This is most likely where you will get the information you need to start narrowing down what systems might be chosen.
- Example 1 – Someone calls in and orders 3 widgets. We charge everybody the same price. We always have them in stock. We give everybody unlimited credit. We don’t charge anybody sales tax. We always ship the same way. There aren’t any add-ons that we need to consider. No one has to approve the order prior to shipping.
- Example 2 – Someone calls in and wants to order 3 of something but it’s a joint effort to figure out what they want. Pricing could be different based on 12 different factors. We rarely have in stock so we issue a purchase order to the supplier who drop ships them to the customer (but sometimes we issue a production order to make it). Sometimes we even partial ship it from two different locations. Credit approval is required based on different factors. Approval of the sales manager is sometimes required. Sometimes this customer is subject to sales tax and sometimes not. There are times where the salesperson will hand deliver it (customer is on the way home) rather than normal shipping. The item they want has been replaced by a newer version.
- How would the ideal system work?
The goal is to try to find functionality that is required but may be unusual. Everyday functionality that every package is going to have isn’t helpful. Try to identify the functionality that some packages may not have!