Choosing a new ERP system can be a daunting task for many organisations. As independent ERP selection consultants, Lumenia provides truly unbiased guidance, backed by exceptional depth of experience and rigour of approach. This rigour is built into our ERP selection methodology, which has been refined over hundreds of ERP projects with local, international and global organisations of varying size in a variety of industry and service sectors. Our independence is illustrated by the fact that we have seen most leading ERP solutions selected by our clients - including those from SAP, Oracle, Microsoft, Workday, Infor, Epicor, IFS, Sage and a host of others. Some key elements of our approach are outlined below.
5 key stages in ERP Selection
Our approach to ERP selection brings elements of a typical software selection process together with good practice procurement and vendor evaluation processes and our own project experience. ERP implementations can run into difficultly for a variety of reasons. Our methodology is structured to minimise the likelihood of challenges being encountered during implementation that are caused by things that were missed during ERP selection. There are five main components to our ERP selection process.
1. Scoping & Planning
When starting into any ERP selection process we work with our clients to ensure there is a clear scope and plan.
For scope we will consider;
- which parts of the organisation should be included
- what functional areas should be covered by ERP
- what benefits will the ERP project be expected to deliver
- whether there are business process changes to be considered
- key integrations with other systems
- whether a new system should be implemented in phases
- any constraints as to how the system should be deployed.
To initiate the project, we will seek;
- cross-functional representation on the project team
- agreement on the criteria that will be used to compare the candidate solutions
- understanding of any hard constraints like budget or timelines.
We then build a plan to communicate the steps and timelines to achieve selection of a preferred solution.
2. ERP Requirements Definition
During ERP selection, a requirements specification may include functional, technical, implementation and commercial requirements. Most ERP solutions can satisfy many basic functional requirements. Focusing on differentiator requirements is the best way to separate systems being evaluated. Included in those should be requirements that are key to enabling expected project benefits.
Technical requirements may cover such areas as cloud hosting, technology standards, integration approach, data protection and security to name a few. Implementation requirements may relate to hard deadlines or preferred phasing approaches.
Some organisations may also be bound by specific commercial or legal requirements. Cross departmental engagement in the selection process helps ensure buy-in and that key requirements are not missed.
We have specified requirements on hundreds of ERP projects and can help to identify those that will differentiate the ERP solutions being considered.
3. Shortlisting ERP Solutions
Selecting an ERP solution means selecting both the technology and the implementation partner. At the start of any selection process it is important to gather a list of suitable candidate solutions.
Some key questions to consider include:
- Is the system widely used in your business sector? If so, it is more likely to be a good fit for any sector specific functional requirements.
- Can the solution support your differentiator requirements? These may be tricky for some solutions.
- Has the implementation partner successfully implemented in organisations like yours before?
- Is the solution appropriate to your current and future projected scale?
- Is the implementation partner the right fit for your scale?
- Are there technology constraints that will rule out some systems?
We have the ERP market experience to help to identify the best shortlist.
Once a suitable shortlist is assembled ERP evaluation processes are typically multi-stage with this shortlist being whittled down at each stage until a preferred solution is identified. Written submissions against formal tender documents coupled with presentations and structured demonstration form part of any good selection process.
Some collaboration and discovery with bidders can be appropriate. Costs are captured in a structured manner to enable comparable TCO analysis. Structured scoring and evaluation are important at each stage. Vendor due diligence, reference checking and implementation team evaluation are important steps to ensure the right partner is selected.
Our tried and tested ERP selection methodology provides processes and templates to guide organisations effectively through each stage of ERP evaluation and to help them arrive at the best selection decision.
5. Commercial Agreement & Vendor Contracting
The final stage of any ERP selection process is to achieve commercial agreement with the preferred bidder and sign contracts. It is critical that the detail agreed during evaluation finds its way to the contract document set, but this step is often poorly executed. The contracts will cover both software and services. Terms should be carefully reviewed and negotiated. Up-front, implementation and ongoing costs should be clearly understood. Responsibilities during implementation should be clearly laid out.
Solid ERP contracts are a foundation for successful ERP implementation projects. We have supported hundreds of ERP projects for our clients and have unique project and market experience to help guide you through this important final selection step.
ERP Selection Key process outputs
- A structured selection process, with well-defined stages, decision points and a detailed project plan.
- Documented and quantified business benefits that should result from the implementation of ERP. This will form the basis of the business case for the project.
- Requirements documentation based on future To-Be business processes rather than current inefficient processes
- Facilitation of project team workshops at all critical points in the decision process, ensuring cross-functional involvement and agreement.
- Selection of a preferred ERP system and vendor (typically within three to six months of project initiation).
- Objective, documented reasons for the rejection of all other systems.
- A PowerPoint presentation summarising the selection process, which can be used for Senior Management or Board level presentations.
- Assistance with commercial negotiations.
- Lumenia does not sell ERP software and offers completely independent advice.
- Lumenia brings knowledge of current best practice and functionality to the selection process.
- We have worked with the leading ERP products and implementation partners in our core markets and can offer unique insight into the strengths and weaknesses of each.
- Our selection process is comprehensive and rigorous and guarantees that the chosen vendor and system provide the best match.
- Our selection process is driven at every step by reference to quantified benefits.
- The process facilitates cross-functional and multi-level involvement, which promotes user buy-in.
- Senior management will fully understand the project in terms of costs, timescales, intended solution and benefits.
- In many of our selection projects, the savings made by our clients are substantially more than our fees.
- All of our Principal ERP selection consultants have at least 10 years of relevant experience of selection, ERP strategy and implementation.
- Lumenia's vast experience helps to avoid the many potential pitfalls of ERP selection.