Ready, Fire, Aim: 10 Worst Ways to Pick a New ERP

There are many wrong ways to pick a new ERP system for your enterprise.  This is a 10-15 year investment and is, in effect, a heart/lung transplant.  These 10 ways, trivial and superficial as they are, are all ways that some companies have made this critical decision for their companies.

1. On the golf course – best advice from one of your foursome on the 13^th tee
2. Over dinner – slightly better than the golf course on the chance that more folks attend the dinner than the round of golf
3. Buy one you saw on the Internet – this amounts to flipping a coin
4. Pick the one a friend picked to run his company – this method is obviously very forward even on the outside chance that your friend’s business is similar to yours. It is highly unlikely that the system your friend picked will fit your organization.
5. Pick the one your competitor is using – most part people assume their competitors operate similarly to themselves. That is a common misconception. Changing an ERP is a great opportunity to leapfrog the competition. Don’t you think your AIM should be to do better than the competitor. If the competitor is also doing a selection and is willing to collaborate, this could provide valuable information. When implementing ERP, the mistakes are so costly often competitors are willing to share information about the solution providers.
6. Assign the decision to one of your top managers, maybe the CFO – Even though the top dogs in a company may have the authority to select the system, this method often fails due to lack of buy in and support from middle managers and below.
7. Have one of your top managers assign the decision to one of their managers – you’re getting closer. Your middle managers have a better sense how to process transactions day to day than the folks at the top.
8. Hire a consultant to recommend one – If you hire a consultant to assist they will take you through a process whereby they should gain buy in from your team, but imagine the dilemma if your consultant recommends a system other than the one favored by your team. This creates a worse dilemma than when you began.
9. Assigned the job to the CIO or IT manager – you’re getting warmer. Often information technology deals with a broad range of issues across the entire enterprise so they are in a somewhat unique position to understand requirements broadly.
10. Form a team including IT, cross functional managers, and system users to follow a structured process to evaluate and select an ERP system – yes we are actually suggesting you include the employees who will have to use the system on a day-to-day basis. Hurray!! this might work!

Conclusion

These 10 methods, as listed, actually build the case toward the correct approach.  We recommend that you hire a consultant to assist with the evaluation.  It is true that consultants will seldom have the detailed knowledge about your company and processes that your own employees possess.  But they add value by bringing a structured process and significant experience with the vendors.  They may also have the necessary negotiating skills to assist in the contracting process.  Finally, they can also help you realistically plan and budget for the entire implementation effort, may also assist with getting top management and/or board approval, and can provide oversight of the implementation from a risk mitigation standpoint.