the nitty-gritty of software selection begins, it is a good idea for
management to know how current strategy, processes and supporting
systems compare to what they could be with the new system.
In fact, this discovery process should be performed every couple
of years so management will know where the company is, compared to a
previous stake in the ground. This is a basis from which to evaluate
opportunities. Many people avoid examining strategy and business
processes and jump right into looking at software functions and
features. Software vendors often encourage this because they want to
move you along quickly in the sales cycle and get you closer to
licensing their product.
Be particularly wary of so-called proof of concept offers wherein
the vendor implements its software at your site and offers various
guarantees. This practice adds confusion to the software selection
process, especially for the uninitiated. Obviously, ERP software
vendors are in the business of selling their products (just as your
company is) and they have their very best people work the sales
cycle to guide your organization to their obvious best solution for
all of your problems.
Start defining software needs by examining current processes that
govern your flow of information and material throughout the
order-to-delivery process and ultimately the entire supply chain.
There is a common tendency to shortcut this very important activity,
but you will pay - sometimes dearly - in time and money for avoiding
this essential step. Evaluating and selecting ERP software is a
complex task. It should be a fact-based process that brings you to a
point where you can make a comfortable, well-informed decision.
The process requires an objective and comprehensive methodology
to guide you through the selection process. This does not mean you
should use voluminous predetermined questionnaires that do not
recognize your specific needs. Rather, it means your evaluation and
selection process should be based on your own strategy and business
process model. A comprehensive methodology to plan, guide and
control the effort has the potential for dramatic savings, not to
mention the most important benefit: avoiding big mistakes.
At some companies, management is so preoccupied with other,
seemingly more important activities that ERP is delegated completely
to the IT department. The idea that this is strictly a technology
project because software is involved is wrong and, in fact, is one
of the leading causes of ERP failure. The IT function is not
well-positioned to evaluate the business implications of various
tradeoffs or to determine their impact on day-to-day operating
results versus strategic intent. Certainly, this shouldn't be the
case as operating decisions belong with senior operating management
and not IT. Once an ERP system has been selected, it's rare for a
company to cut its losses and scrap the project until many years
The political fallout is often the biggest obstacle. No one wants
to tell upper management that an ERP investment of millions of
dollars was a mistake and the process should be restarted. When a
company lives for many years with a poor ERP decision and/or
implementation, however, the costs continue to escalate and the
benefits do not come. The cost of lost opportunities could be
massive. The ERP software search, evaluation and selection process
must be done right to minimize this risk.
The clean-sheet-of-paper approach, although alluring in concept,
has been a big bust for many companies. The clean-sheet business
process redesign and the subsequent ERP system configuration is
complex, costly and time-consuming. Consequently, most companies
have come to accept the compromises and trade-offs that
industry-specific, best-practice templates require. Preconfigured
templates allow faster system deployment and faster benefits.
Processes can be refined at a later date. This is not to say that
it is okay to just slam and cram predetermined processes into place.
On the contrary, selected template processes must still be verified
for appropriateness, at least for the near-term, before going
forward. The demand for rapid ERP implementation is high. This was
the primary driver for the development of off-the-shelf templates
designed to speed up and simplify the software personalization
process. But templates, by their very nature, incorporate specific
best practices that support cross-functional business processes. On
the surface this may sound like nirvana, but very few organizations
take the time to rethink how they should and could run their
businesses. By taking the easy way out, these companies end up with
generic, albeit industry-specific, functionality.
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