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Software selection is not easy

BEFORE 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 have passed.

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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Common ERP Myths

ERP means more work and procedures

ERP will make many employees redundant and jobless

ERP is the sole responsibility of the management

ERP is just for the Managers/Decision-makers

ERP is just for Manufacturing Organizations

ERP is just for the ERP implementation team

ERP slows down the organization

ERP is just to impress customers

ERP package will take care of everything

One ERP Package will suit everybody

ERP is very expensive

Organization can succeed without ERP


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