Four Critical ERP Selection Steps You Can’t Miss
This blog post was originally written by Tom Miller (ERPfocus), for K3.
When the time comes to select a new ERP system for your organization, a few critical steps must be taken. Taking these steps carefully will open up the chance for a successful selection, and, later implementation of your ERP.
Define your requirements for ERP
Why do you want a new ERP? What benefits do you expect to realize from ERP? These are not simple questions. Sales will have requirements that are different from those of engineering. Requirements from production could be mutually exclusive to a finance requirement. A requirement that seems obvious on the surface could become a detriment upon a closer look. Your requirement list must look forward to the state of your business ten years into the future.
Plan on several sessions to make your list. Get input from all functions and departments. Refine each point until your team agrees upon the requirement as a benefit for the entire organization. Rank your requirement list in order of importance, and then draw lines separating requirements that must be achieved from those that would be nice to have. The ERP you eventually select has to satisfy all the must-haves and as many of the nice-to-haves as possible.
Be certain you have management support
Your top management will approve or deny your request to implement a new ERP. You have management requirements already in the list you prepared. Management decisions often are financial so you must have the return on investment, payback, and other measures of value prepared for their use. Even an excellent ROI will not ensure a management choice to implement ERP. There might be strategic plans or political possibilities that affect a choice today. Receipt of an OK to proceed without true support of management almost ensures failure. Be certain to have management support.
Ensure you have enterprise-wide involvement
You and your business will use this ERP for at least another decade. ERP is an enterprise-wide set of tools so the selection affects everyone. Ideally, all users and outside parties see the new ERP as an improvement from whatever process was previously performed. If even one function sees the change as a step backwards, they can undermine the benefits of the ERP for all.
One benefit of any ERP is the possibility of a single set of data used by all and a common “truth” agreed upon by all. Those who base future decisions on legacy systems or workarounds might come to different choices compared to a decision based on common ERP data.
Have an implementation plan
Begin work on your implementation plan at the beginning of the selection process. Make tentative assignments to your ERP team. Consider whether your ERP should be in the cloud or on-premise. Plan who will perform the tasks those team members cannot perform while involved in ERP work. Identify gaps in skills needed for your ERP project and consider whether to hire employees or consultants to fill those gaps. Understand the tasks needed to complete selection, implementation, training, testing, and otherwise yield a successful ERP and start planning on how your business will undertake those tasks.
You will refine this plan after the eventual choice of ERP and learn what support your ERP provider will supply. Remember, this is your ERP and do not depend completely on your provider to understand your business in the same way you, on the inside, understand it.
These critical selection steps will help ensure your ERP provides the value you need.
About the author
Tom is a columnist for ERP Focus, and has completed many ERP implementations from a long list of popular vendors. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle.