The question of the appropriate ERP solution
Since ERP systems are usually used over a period of 10-15 years and involve high investments, the implementation of such projects is comparable to an open-heart surgery. Therefore, it is of crucial importance to plan such an undertaking thoroughly, prepare it carefully and execute it prudently. If you select software carelessly or hastily, you are already making the first big mistake.
When does an ERP selection consultation make sense?
Particularly in the case of established companies that have grown dynamically over the years, there is often a lack of expertise in the area of ERP and business software. IT departments are not sufficiently set up or are managed in a decentralized way. This often leads to a multitude of smaller, isolated and incompatible solutions. Having worked with familiar systems for many years, employees often develop an aversion to anything new and find it difficult to change their own processes to a new ERP program. This makes the decision-making process a laborious one. It often happens that too much emphasis is placed on supposedly ‘important’ functions that are of little significance. The crucial and fundamental functions are quickly neglected. However, many young companies also have difficulties in selecting a suitable ERP system. These companies are often full of innovative ideas and visions for the future, which is of course great and should not be discouraged. However, when it comes to choosing an ERP system, too little attention is often paid to the core functions of the ERP program. Instead, software is quickly chosen that offers many new approaches and technologies but is not yet fully developed in the actual core area. In addition, many younger employees have no experience with such programs. They simply lack the experience to know what is important in the new ERP system and to what extent these systems are located in an entire system landscape. In a selection process that extends from the initial considerations to the final realization, the focus should always be on ensuring business continuity, with both management and the team involved driving this forward. What good are colorful dashboards that claim to use artificial intelligence or focus on digital manufacturing if, for example, the system can no longer generate orders or issue invoices? A well-thought-out and systematic selection process can help in this case.
The ERP selection process
1. Preparation
Before deciding whether the team for the ERP project should be set up internally or supported by a consulting firm, it is important to be clear about the scope of the project. This means knowing which areas and processes are affected. The size of the company also plays a role, as does the corporate structure. Are all locations or company shares within the scope? To find this out, you can review the process and company documentation, such as process descriptions, organizational charts and the IT landscape, and check that it is up to date. The aim here is to identify the core and value-added processes. In addition, critical factors in the company should also be considered.
2. Strategy workshops
Strategy plays a decisive role in an ERP project and forms the foundation for the entire project. The big picture is considered and strategic guidelines and a roadmap for the ERP decisions are defined. The focus here is on the strategic direction and the economic goals. The strategic guidelines serve to define these aspects in concrete terms, to establish facts and to avoid discussions about company policy that could lead to delays and additional costs during implementation. The strategy paper can, for example, cover various dimensions such as ‘organization’, ‘processes’ or software.
3. process workshops
In the context of process workshops along the previously defined value chain, work is carried out together with employees to define the functional requirements and a process map. During this phase, the following are defined, among other things: unique selling points, show stoppers (critical points), functions that offer added value, and requirements based on the strategy. Careful preparation of the workshops is important in order to achieve efficient results on the one hand, and on the other hand not to unnecessarily burden the affected employees in their daily business.
4. market review and evaluation of potential ERP systems – creation of a longlist and ERP specifications
To find your way around the extensive ERP system market at the beginning, it is important to consider certain criteria. These include the industry, the size of the company, the orientation of the customer structure, the server and operating system, the database models used, and the focus on specific areas such as finance, sales, logistics or human resources. This filtering process provides an initial insight and a sense of which direction to take. When the solutions are specified and considered in terms of how well they fit your company, a long list of providers emerges that can be considered in a call for tenders.
On the one hand, the ERP specifications should contain the specific results of the process workshops in the form of a functional requirements catalogue. On the other hand, the respective areas, important processes and any special features should be presented. A description of the company rounds off the specifications and provides the suppliers with the necessary information to prepare a suitable offer.
5. Launch of the tender process
When it comes to the actual call for tenders, communication with the suppliers is of great importance. It is important to find out in advance whether the potential bidders have sufficient capacity. This concerns both the processing of the tender documents and the actual project work. This is to avoid unpleasant surprises in terms of scheduling. Furthermore, it is crucial to maintain a regular exchange with the providers in order to make the expectations of both sides transparent and to clarify open questions. This creates a solid basis for further cooperation. The exchange can also reveal whether a provider is a good fit for the company and whether the task at hand has been properly understood.
6. evaluation and analysis of the feedback
Once the providers have submitted their responses, the analysis and evaluation follow. The focus here is on the extent to which the company-specific criteria are met, such as scalability, integration, flexibility or user acceptance. In addition, the requirements and needs of the users from the process workshops are taken into account. The result of this evaluation is the shortlist, i.e. the providers with whom specific workshops are now being conducted to thoroughly examine the system and the implementer. All aspects are carefully considered.
7. Conducting the provider workshops
Provider workshops are conducted with the involvement of employees, in which specific use cases are considered. In these workshops, the providers present their software solution and project methodology. The focus is on understanding the extent to which the software is able to map the company’s processes, unique selling points and existing expertise.
8. decision-making
Based on all the data, information and findings, a comprehensive analysis is now carried out, the results are processed and a decision template is prepared.
9. contract negotiations and conclusion
There are already many tasks to be completed here. However, it is important not to rely solely on lawyers and to take comprehensive precautions against risks. It is advisable to rely on experience and common sense to create a solid foundation for a partnership.
By considering these steps in the decision-making process for selecting an ERP system, companies can ensure that they choose the best solution for their business needs and carry out a successful implementation.
