ERP SOFTWARE BUYERS GUIDE
Rather than just display a vendor short-list of the market share leading ERP software solutions, the Enterprise Resource Planning (ERP) software Buyers Guide takes a cursory review of the entire procurement lifecycle.
Qualitatively Define the Problems Before Looking For a Solution
While every company has its unique reasons for purchasing new ERP software applications, we have outlined several of the most common key factors influencing the acquisition of new ERP software systems below.
- Current business software systems are outdated, require high maintenance and are difficult to manage
- Over reliance on Excel spreadsheets, custom developed desktop programs and disintegrated PC utilities
- Current systems cannot support new company business initiatives or company growth
- Lack of information system support for business processes drains user productivity
- Users are unable to retrieve information timely or at all
- Current systems are simply broken or ineffective
- Key business functions are manual or require multiple disintegrated systems
Good software selection projects begin by citing deficiencies with the current environment and identifying pain points to be resolved. As with many technical initiatives, thoroughly defining the problem provides a significant basis for ultimately achieving a solution.
Set Clear and Measurable Objectives
Clear and measurable business objectives are a prerequisite to achieving forecasted success. For reference, we have listed below several common strategic objectives cited for ERP software implementations.
- Achieve a single, integrated, real-time, enterprise-wide information system to reduce technical administration, business process complexity and costs
- Achieve a centralized system without ancillary shadow systems or duplicate data islands
- Achieve more efficient business processes that support repeat behaviors and user productivity
- Lower IT costs by reducing system maintenance and eliminating duplicate disintegrated systems
- Improve system governance and achieve tighter management controls; support for SOX 404, SAS 70
- Get information to knowledge workers; achieve better reporting and visibility to company operations
- Advance information delivery from simple column-based reports to include real-time notification alerts, graphical dashboards, reporting with drag-and-drop manipulation and drill-down analysis, and data warehousing with OLAP (online analytical processing)
A best practices method used when specifying goals is to make the objectives SMART (Specific, Measurable, Actionable, Realistic and Time-Bound). This practice is an objectives-focused implementation component method which includes the specific steps to define project plan task items and initiatives in a manner that controls scope, specifies outcomes and ensures metrics are established by which the success of the task or initiative can be continually measured and managed. The SMART approach begins with business objectives and requirements that are specific, measurable, actionable, realistic and time-bound. For example, an objective to "increase customer satisfaction" would not qualify as a SMART objective; however, if our objective is to "increase customer satisfaction by the end of the quarter by reducing wait time by 10 percent”, that customer relationship management (CRM) objective has now met the ‘Measurable’ and ‘Time-Bound’ criteria to become a SMART component.
Adhere To a Systemic and Measurable Process
There is a direct correlation between projects which fail to adopt proven methodologies or fail to impose disciplined project management and failed ERP software implementations. Several key components of common in most software selection and application implementation methodologies are highlighted below.
- Define measurable strategic project objectives; include budget and build the business case which includes ROI within stated timeframe's
- Clearly define business processes and user requirements
- Map business processes and needs to ERP application feature sets and requirements; identify gaps and perform gap analysis as early in the process as possible
- Consolidate all feature requirements into an RFP (request for proposal); prioritize and weight requirements relative to key objectives
- Use the RFP responses to down-select vendors for software demonstrations AND ultimate decision making model
- Create Demonstration Scripts and require that all vendors adhere to them so meaningful comparisons among vendor solutions can be made
- Perform a technical assessment – smart technology adoption lowers computing costs and ensures longevity; be sure that any application considered possesses a software technology foundation built for the future, incorporates industry standard approaches for software customization or system integrations
- Sum the total cost of ownership (TCO), conduct a cost-benefit analysis and calculate forecasted ROI; be sure to solidify the frequent hidden costs to the best of your ability
- Expect there will not be a 100% fit by any software vendor and consider tradeoffs between manual activities, software customization, flexible configuration and work-arounds
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ERP Software Buyers Guide
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