Selecting a new ERP system in any business can be a monumental challenge, and with any big challenge come some major pitfalls. In this post, we discuss some of the most common mistakes he has seen in the selection process and how companies can avoid them.
Mistake 1: Relying solely on brand recognition
How it happens: Sometimes, when organizations are shopping around for a new ERP system, they rely heavily on brand recognition as a key deciding factor in making a purchase. The problem with this thinking is that often the best-known brands are synonymous with the most generic solutions – enormous companies building one-size-fits-all software solutions for the masses. If you have more specific requirements, you might need a more specific, lesser known ERP package.
The fix: Avoiding this mistake is as simple as casting a wider net at the outset of your selection process and scheduling demos for vendors that are a good fit for your industry or company size, even if they are unfamiliar to you. You will likely find that smaller vendors are more responsive to your questions, goals and challenges, and can tailor a specialized solution that can improve your business processes.
"The ERP world is full of smaller vendors that offer high quality specialized software systems that help companies go from good to great," abas ERP sales manager Joe Vecchio said. “Being open minded about these ‘Hidden Champions’ could really help companies find the right fit with an ERP system.
Mistake 2: Getting too attached to the status quo
How it happens: It’s natural for people to resist change, especially in a busy workplace. But sometimes the desire to pick a system that feels comfortable or “not too different” can seriously hamper a selection effort.
“The goal of changing to a new ERP solution is to find untapped business opportunities and create value through process improvements,” said Vecchio. “Sometimes that means being willing to make a major change.”
The fix: Making sure the entire selection team understands and supports the goals of the software change can go a long way towards avoiding this pitfall.
There may be some processes and functions that can and should be brought over, but in general, a new ERP system should signal a change in how the business operates as a whole.
Mistake 3: Starting with too generic of an RFI
How it happens: One of the most common errors organizations make when selecting a new ERP system is sending vendors generic requests-for-information. These forms are often very long and fail to ask for the data at the heart of what the company is really looking for.
The Fix: Vecchio explained that businesses should closely examine their processes and figure out exactly what they need from their new system.
“Structure your RFI around a limited set of must-have components and the features that will allow you to clearly differentiate the packages from each other,” he said.
In addition to the role this step plays in your decision, it is also crucial for helping the vendor deploy your system quickly and in a way that improves the business as a whole.
Mistake 4: Having unclear evaluation criteria
How it happens: Building on Mistake 3, the excessively generic RFI, Vecchio also said unclear or poorly defined evaluation criteria can lead to problems in the selection process.
The Fix: Consistency and a clear process are key. According to Vecchio, the best way to avoid confusion with your evaluation criteria is to be sure you document and agree on a concrete list of requirements before you start working with vendors. Then use the same score card for evaluating all of the options. This will not only help keep tabs on which solution is best for you, but it will help potential vendors tailor their demos to what you really need.
Mistake 5: Looking for too much consensus
How it happens: One of the biggest pitfalls that can arise during the ERP selection process is that, in trying to include opinions from all involved functional areas, an organization can get bogged down in a never-ending decision-making process. The complexity of the decision can intimidate or even paralyze a management team.
The Fix: Instead of going at the problem on your own, allow vendors to simplify and help you through a reasoned selection process. Rather than giving all involved parties an equal vote – or worse, the power to veto – appoint a trusted team leader who can gather opinions, and make an informed, yet timely decision.
Joe Vecchio, sales manager at abas USA, described a few of the most common mistakes he has seen in the selection process and how companies can avoid them.