Nine steps to an effective ERP assessment and software selection

When it comes to evaluating the right software for your business the options can be overwhelming. To simplify the evaluation process without overlooking a package that may be a strong fit for your organization, we recommend these steps to find the best ERP solution for your business:

Establish a budget

When doing this, plan for a contingency of 10 – 15% to accommodate additional capabilities and requirements that may be discovered during the early stages of the implementation process.  Because your implementation process is a forcing function for process optimization, you’ll likely discover some additional required capabilities, but will also identify some processes that can be either simplified or eliminated.

Form an evaluation team from stakeholders

The team should include representatives from each of the roles dependent on the ERP system.  Include both business users and IT representation. As well, it’s helpful to have participants at multiple levels on the team as a selection that may be the best fit for the C-level team may be completely insufficient for the needs of stakeholders on the shop floor and consequently will not meet the needs of the business as a whole.

Clearly define your project objectives, requirement and scope

The majority of ERP implementations that are unsuccessful can attribute the failure to a lack of clearly defined objective and requirements.  Overlooking critical requirements may result in a project that fails to deliver the desired outcomes. In developing requirements, consider your organization’s business mission for the coming 5-10 years and make sure to include capabilities that accommodate future business changes and expansion with ease. Once you have finalized your requirements, you then have the criteria to evaluate your solution options.

Identify both industry-specific and general ERP packages

For this broad universe of possible solutions, we typically recommend a “long list” of six to eight vendors. Based on your business requirements and budgetary needs, you will eliminate many of these choices. 

Prioritize your requirements or at a minimum categorize as “nice to have” or “must have”

Discuss these business requirements with each of the long-list vendors and solicit responses to an RFI (request for information) to support an initial evaluation of each vendor’s capabilities.  What you learn, along with your “deal-breakers” will help you arrive at three to four short-listed vendors. 

Conduct a detailed assessment and analysis of the short-list vendors

Your discovery may identify capabilities you did not previously know were available and additional business requirements that your organization needs in a potential ERP solution, so this is a good time to revisit your prioritization. From your prioritized requirements, create a capabilities-based demo script of your business processes and require each vendor to demonstrate its product within this context.  Providing a common script establishes a level playing field for evaluation and when you control the script for any demonstration, rather than the vendor, you can more easily evaluate the ability of each vendor to meet your business requirements.   

At this point, issue RFPs (requests for proposals) to the short-list vendors which require:

  • Specific costs: subscription fees, license fees, support costs, services costs, training costs
  • software capabilities, including deployment options 
  • proposed implementation strategy, whether direct or through an authorized partner
  • Available 3rd party solutions that complement the ERP
  • Support provided, both for end-users and for system administrators
Quantitative assessments from the full stakeholder team

During the short-list and demo evaluation, the full stakeholder team should provide a functional assessment – quantitative assessments of how well the vendors’ products address the key business requirements in the provided demo scripts.

In parallel with the functional assessments, assess the technical capabilities of the short-listed vendors. This should include areas such as scalability, ability to integrate with legacy systems, compatibility with the current IT infrastructure, architectural considerations, deployment options, learning curve etc. These technical factors may be as important as your functional business requirements.

Make a decision

Utilizing the input from the vendor evaluations and technical assessments and prioritize the vendors’ strengths and weaknesses. Finishing your selection may require more of a quantitative ranking and weighting to evaluate how well each of the packages meets your business requirements.

Choosing an ERP solution is one of the most critical decisions your organization will make, either enabling growth or inhibiting it.  Its impact on your company’s performance will be long-lasting, so take the time and effort required to execute a complete and methodical evaluation.  In doing so, you will be well-prepared to select the software that is right for your organization.