Topic: General Posts

Subject: Best Practices for ERP Selection
Allen Bishop
Member: 2003
Posts:7
Submitted on 06-21-12 9:28 am
Message:
I may soon be involved with selecting an ERP system for a small manufacturing company. I'm looking for some guidance for best practices in the selection process. Rather than comment on preferred systems or those that are not adequate, can anyone provide guidance on the selection process itself?

I've previously been involved in ERP selection processes that were not complete. Much subjective opinion, individual preferences or response to a compelling demo seemed to be the drivers. I'm looking for a solid methodology to select the best ERP available given the needs of the business.

You help is much appreciated.

Allen Bishop
Houston Chapter
 
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Replies
Phil Stayman
Member: 2008
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 06-21-12 6:04 pm.
Message:
Allen,

My company, a small retailer, is also beginning the search process. I had a "request for assistance" in today's newsletter. I just spoke to Gene Jones, coincidentally from the Houston chapter, and he has implemented Net Suite in a manufacturing environment. Since he was gracious enough to reach out to me I'm sure he would be glad to speak with you as well. His number is 713-364-6843.

Best of luck,

Phil

Philip S. Stayman, CCE
Controller
Fitcorp USA, Inc.
2330 Apollo Circle
Carrollton, TX 75006
972-416-7200 ext 315
 
Allen Bishop
Member: 2003
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 06-21-12 6:27 pm.
Message:
Thanks Phil.
 
Bruce Lynn
Member: 1998
Posts: 68

Subject: Re:Best Practices for ERP Selection

Submitted on 06-22-12 6:21 am.
Message:
If there is enough interest in ERP systems for mid sized company I would be willing to host a conference call across FENG chapters to assist as many Feng members as possible.

What dates make sense?
 
Phil Stayman
Member: 2008
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 06-22-12 9:09 am.
Message:
Depends on the scope of discussion. If it's planning and requirements then it could apply across industries. Once you get industry specific (e.g. manufacturing/distribution vs retail) planning and implementation it would be more difficult to have a commonality to attract members to participate.
 
Allen Bishop
Member: 2003
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 06-22-12 12:19 pm.
Message:
Bruce, is it possible to use the site to conduct a poll for interest and to answer the scope & date questions?
 
Ira Haber
Member: 2012
Posts: 1

Subject: Re:Best Practices for ERP Selection

Submitted on 06-26-12 3:44 pm.
Message:
I am consulting to a company that has outgrown Quickbooks Enterprise and I am looking for "best practices for ERP selection", along with a current comparison of accounting software for mid-market companies. The company is in one location, will do about $20MM in sales this year, and the average sale is under $1000 so there are numerous transactions each year. It's basically an operation that buys commodity food items and re-packs them. After that, the operations are basically pick, pack and ship. There is a need for margin analysis at the sku level, but they really don't "manufacturing" per se. Any direction to find a good, recent article comparing solutions would be helpful.
 
Robin Tarnoff
Member: 2011
Posts: 2

Subject: Re:Best Practices for ERP Selection

Submitted on 07-01-12 4:39 pm.
Message:
Generally, the following steps are performed. If you are looking at a very complex set of requirements, then there can be levels that repeat to drill down to the lowest requirement.

1) Users define the functionality they would like to see in the system.
2) The group ranks the functionality.
3) Analysis of target software is done to determine fit to- and gap to functionality required as well as pricing structures (may include vendor demos).
4) Fit-gap report is prepared and presented to management.
5) Repeat to lower levels of requirements.
 
Allen Bishop
Member: 2003
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 07-01-12 5:05 pm.
Message:
Robin, anyway to simplify step number 3? How does one know that they are looking at the complete set of potential solutions vs hit or miss / luck?
 
Robin Tarnoff
Member: 2011
Posts: 2

Subject: Re:Best Practices for ERP Selection

Submitted on 07-03-12 11:54 am.
Message:
Hi Allen,

Start with the users because they may already have some companies in mind that will have to be included in the analysis. Next, internet research, use the same key words found on one of the competitor sites. Lastly, don't be afraid to ask your network for recommendations. You want to start with as wide a net as possible. You may not find every possible vendor, but the upside: if the above steps didn't locate the vendor, they don't market well and may not be in business long.

Robin Tarnoff
 
Bernard Ganski
Member: 2011
Posts: 8

Subject: Re:Best Practices for ERP Selection

Submitted on 07-05-12 7:06 pm.
Message:
Hi Allen,

I have been through three Global implementations with PMO experience. There isn't any particular cookie cutter approach. The best starting point is to evaluate the current state and determine where and how you want to derive value out of a new ERP system. Once this is defined, I would recommend determining which platform supports the business objective best. Otherwise, the whole thought around selecting any new ERP is of negligible value. Please contact me if I can be of any guidance to that end.

Best Regards,

Bernard Ganski
856-467-7964
 
Allen Bishop
Member: 2003
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 07-05-12 7:09 pm.
Message:
Thanks to both Robin and Bernard. I appreciate your input.
Regards,
Allen
 
Dan Helming
Member: 1999
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 07-16-12 5:59 pm.
Message:
I learned a methodology at PwC and while that doesn't guarantee virtue, I am actually a Controller and consultant and haven't found a better methodology for ERP selection.

1. identify 10-20 critical transactions among your cycles: criteria: pivotal, integrative, as much machine cutting down human time and volume, as automatic as possible, or with as many integrative review screens that match data as necessary.

2. Make a decision as to whether you will 1) configure an ERP to the reports/types that already exist, or 2) you will find options available on the system, then you will program to needs using reportwriters. You will harness the power of the new system better using approach 2) using less money, and everyone will know the new system within 3 months anyway.

3. Select candidate ERP's from among like businesses including your competitors, and also entertain at last one each from Microsoft, Oracle and SAP, they'll probably recommend. You'll find them in a google and they will decide how to service a presentation.

4. Evaluate maintenance costs to keep software updated and provide call center. This usually shocks you.

5. Have each candidate demo the 10-20 transactions in an hour each over two days. Again, stay open-minded about other system design and appearance. Document how each application is done on a scoresheet so you can recall it when you evaluate each software.

6. Rank or score each software. however and with whomever you like. Though data-level people don't usually like to get involved and like things to stay the same, they usually aren't objective and will enjoy most if you tell them the decision.

I'm available. Dan Helming C201-213-0648
 
Allen Bishop
Member: 2003
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 07-16-12 6:06 pm.
Message:
Dan, thanks for the post. Very cogent and on point.
Allen
 
Vic Cannon
Member: 2012
Posts: 1

Subject: Re:Best Practices for ERP Selection

Submitted on 07-18-12 8:46 am.
Message:
Once you have narrowed your selection to two or three different software packages. I would go online to search for a users group associated with each software offering.

Select two or three companies currently using the software and call them. Ask them about the strengths and weaknesses of the software. You will get a better answer from them than you will from the references listed by the software vendor.

Before pulling the trigger on the final software selection, it might benefit you to go to one of the companies that you called and see the software in use. You will be surprised at how much you will learn from this trip.

I have selected and implemented three different software packages, the above is a best practice that I have learned.

If you have any other questions, please call me at the number listed below.

Thanks,

Vic Cannon
Charlotte, NC

cell 704-351-9819
 
Mary Califf
Member: 2002
Posts: 2

Subject: Re:Best Practices for ERP Selection

Submitted on 07-23-12 11:00 am.
Message:
Dear Allen and Phil,

I find the process often varies depending on what you are currently using now, the reasons that are driving your need for change, and how complex of a system you are looking to move to (ranging from basic cash processing, vs. processing + basic analysis and risk tools vs. high level processing and risk tools)? Also is it purely cash management, or are you also looking for tools to cover say - debt, investments, and/or derivatives. Lastly, what level of interaction do you see with other systems inside your company and outside?

At a high level, I suggest a mix of some of the suggestions you have seen below – done in two phases

Develop a Vendor Short List
1. Users define the functionality they would like to see in the system.
2. The group ranks the functionality (use numerical rankings) – gives you objective data to make decisions on
3. Determination of ASP vs. In house solution
4. Send RFI request to potential vendors (say 5)
5. Select best vendors based on RFI responses - have a short on-line demo and high level pricing
6. Select short list 2-3 vendors


Select Final Vendor
1. Inform the final vendors you want an in-person demo and request an RFQ
2. Select a number of test transactions you would like the vendors to use in the demo – these should include your bread and butter activity, as well as some complex issues that you want to ensure they can handle. This will give you confidence the vendor can really deliver to your needs and give you a good sense of system touch and feel, standard reporting and analysis capabilities, etc.
3. Have your uses assign a weighting to each test case and rank each vendor – this gives you objective data to make your decisions on
4. Conduct reference requests and make decisions
5. Conduct contract negotiations
6. Selection
7. Implementation

I appreciate I have hit you with a lot of information here. Please feel free to reach out if you would like to discuss – 917-533-5019 or marycaliff@hotmail.com

Mary
 
Doug Berson
Member: 2002
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 07-28-12 1:57 pm.
Message:
I know I'm a little late to the game, however; the process does not have to be complex. I'd be happy to discuss some high-level approaches I used at PwC and IBM.

Couple of touch points:
- CRITICAL requirements are the most important to determine, as that will cut the list of potential vendors down to 3 - 5 which is round one, providing you with key differentiators.
- Budget
- Scope
- Let the vendors (final 3/4), come in for 'dog & pony' show and learn from what you see.
- Have client with your assistance, develop 'scripts' for final demonstrations. Each vendor MUST perform exactly the same otherwise they will run the show and the client will be left with no real comparative perspective.
- Ensure one gets TOTAL COST OF OWNERSHIP from each vendor after the vendor provides client with exactly what will be required for any hardware/infrastructure/licensing needs, etc.
- Monthly costs for support and upgrades, remembering that going "best of breed" will require much more testing as any upgrade/service pack from one vendor will require testing of any custom integration.
- Track work-arounds.
- Get references in varying stages of implementation.
- Identify KEY stakeholders in each 'process' of your business.

Ok...that was more than a couple of tidbits.
 
Allen Bishop
Member: 2003
Posts: 7

Subject: Re:Best Practices for ERP Selection

Submitted on 07-29-12 1:00 pm.
Message:
Thanks to both Mary and Doug for their valuable comments.
Allen
 
Ian Bradley
Member: 2004
Posts: 5

Subject: Re:Best Practices for ERP Selection

Submitted on 08-15-12 3:22 pm.
Message:
We are also in the throws of an initial look at a new ERP system and are considering the use of consultants to help us on our selection journey.

The thought process on using outside consultants is:

1. We don't have the expertise to formally map all areas of the business. We will do the bulk of the work with their oversight. This will add a ton of value as we currently don't have a lot of this, as we are privately owned in the $80 Million region and so don't conform to Sarbox.

2. Help in understanding growth issues and requirements we don't foresee. Remit is to have a system that can grow with us to a Billion $ company, including acquisitions and international growth.

3. Narrow the focus with the vendors on our differentiating activities / processes that the new system must be able to handle in some form. This is key as all vendors will show you what they do well, but may not be able to handle your key processes very well.

4. Help in the negotiation phase (and potentially implementation) as they have more exposure to the market and so know which items are negotiable and what we should be paying for the software. In my mind this will probably pay for the assignment in the first place.

We are currently looking at both Ultra (Out of Chicago) and Tribridge (National).
 
Subu Seetharaman
Member: 2011
Posts: 5

Subject: Re:Best Practices for ERP Selection

Submitted on 10-11-12 9:37 am.
Message:
Many have answered before. I think I can add couple of points ...

1/ Get a *good* program manager who has done the same stuff in a similar environment. All the brainstorming and flow charting doesn't beat experience !; What do I mean by similar environment : Mid size manufacturing = Mid size Manufacturing; Service = Service; Food and rest. = food and Rest.

2/ Keep your customer in mind all the time. It's great to optimise processes, but much better to improve customer experience ...well unless you are the government :-)

regards
Subu
 
Ted Bachman
Member: 2002
Posts: 3

Subject: Re:Best Practices for ERP Selection

Submitted on 10-18-12 11:26 am.
Message:
There have been a number of very good replies here.

The basic approach that I have used starting back in the Big 8 was to
1. Develop a list of system needs or requirements. If it doesn’t meet your needs, it’s history.
2. Look at cost including Initial purchase price, maintenance, renewals, and hardware requirements.
3. Develop a list of viable software systems available
4. Evaluate the financial stability of the software firm (and VARs if you are using any)

System Needs and Requirements
1. First develop a list of needs or system requirements by going to all the users giving accounting a high priority.
2. Rank the importance of each requirement (some may be ‘must haves’ and any system without this would be eliminated).
3. Then rank how well each of your final 3 to 5 contenders that meet all the ‘must haves’ fulfill each requirement using a 1 to 5 or 1 to 10 system with the higher number being the best.
4. If you use a spreadsheet, you can simply add the scores for each software package and the one(s) with the highest score(s) is/are the finalist(s).

After this has been completed, look at the cost and financial stability of the software vendor.

I hope that this helps.
 
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