Those who have gone through the implementation of an enterprise resource planning (ERP) system know how complex, difficult, slow, and costly the process can be.
Why?
The first problem organizations must face is the reasons for implementing an ERP system. This investment should, as any other investment, aim for profitability. This might seem obvious, but it doesn't seem to be clear for many companies. They want staff reductions, more control, or more automation, but they don't prioritize return on investment (ROI). In the end, if the company reduces its operation costs, improves its service level, increases its sales, and finally, increases its revenue, the project is considered a success.
The common theme among these technologies is that they help organizations optimize their performance and stay competitive within the market.
The second issue is selecting a system and a service provider. The way in which many customers carry out their IT evaluation processes makes them waste a lot of valuable time. In the worst cases, selection takes longer than the execution of the project. If they followed a more efficient methodology, they would be able to make a better decision in a few weeks, and with a lower cost.
A good methodology should consider a selection mechanism that weighs the most important aspects for each area, in a way that will produce immediate and definite results once the process is completed and each vendor's qualifications are filled out. There is no use in having a list of key points, in not using weighted preferences, or in using one of those requests for proposal (RFP) that asks so many questions but that people generally don't understand, or worse, that don't focus on what is important for the company.
Waiting for the slowest vendor
Another cause for delays in the decision process is waiting for the slowest vendor. Clearly, this delays the customer's evaluation process and makes timely and reliable vendors wait patiently-or impatiently-for the slowest one to show up. However, the most critical issue is when the delivery of the proposal is slow. Logically, the customer wants to make the best decision. But just imagine: if the sales process is that slow, how will the execution phase be?
Proof of concept
Most ERP projects require modifications to the source code so the product can do the customer's operations, but not all vendors are capable of doing such modifications when the customer requires. As a result, days or weeks can pass before the vendor can present a reasonable solution. Sometimes they are forced to admit they are incapable of fulfilling that request, and they present their products exactly as they are, leaving the users disappointed. Others may suggest that modifications to the source code are unethical, just to avoid the issue.
Decision makers
When the person responsible for the evaluation process does not involve all the real decision makers in the process, he or she is playing with fire. I have often seen selection processes that were carried out flawlessly (or almost) only to fail when the decision-making team has to present the result to the highest authority. Many times, the big boss, or the "corporation," seems to know a better candidate. This is frustrating for the person responsible and the people involved in the process, as well as for the "winning" vendor, unless he or she is the one related to the big boss.
Lack of budget
The cat in Alice in Wonderland said, "If you don't know where you're going, any road will take you there." This is true when there is no budget for ERP implementation. We have witnessed cases where the organization goes down the long and winding road of evaluation, only to end up with the right decision and no money for its implementation. Naturally, many companies have no idea the amount they need to invest in an ERP system, but at least they allocate part of their budget to IT, providing the funds for this type of investment. A good starting point is allocating 2 percent of the previous year's sales to IT.
When choosing an ERP system, decision makers should consider the quality of the product, the quality of the implementation team, and the team's proven success stories. They should think about a system that covers the industry's specific requirements, and a vendor whose projects have been completed on time and within budget.
Check out some of ERP success stories:
