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5 Tips for Vetting ERP Vendors

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It’s a long partnership and a big investment, so it’s important to ask the right questions.

ERP Vendors

ERP Vendors

ERP Vendors-ERP evaluations are often done as a result of a previously failed implementation project. In fact, nearly 50% of ERP projects are unsuccessful the first time around, according to analyst firm TEC. Whether it is budget overruns, longer-than-anticipated timelines, or change in the technology capabilities, it all comes down to the failure to meet a company’s objectives.

So how can you make sure your upcoming ERP project doesn’t become part of this statistic?

1. Start by Defining the Project ROI

Unsuccessful projects tend to start with a statement like “our ERP system is dated” or “our ERP system is not supporting our growth.” Before embarking on an evaluation, define the business return on investment for your ERP project. Share the project ROI goals with each ERP vendor you are considering and work with them to understand how their platform is going to help you achieve that expectation.

The project ROI will also be a critical internal selling point to company owners, stakeholders, and even end-users and will help set benchmarks that can measure the health of an implementation project down the road.

2. Get into the Functional Details

For large ERP projects, the vendor will most likely come onsite to demonstrate the capabilities of their software. Avoid high-level software demonstrations, like “how do you void a check with your system” as much as possible. Instead, have them prove that the software can handle the unique challenges of your specific business. Pick five of the most complex processes that are currently handled, document them, and deliver the scenario to an ERP vendor only a few days ahead of the demonstration. This will give them time to prepare but prevent them from making significant coding changes to mask a potential gap in the software. As the vendor goes through the demonstration, throw them a curve ball at the end of each scenario and ask them to configure the solution in front of you to understand the process. If they struggle, consider it a red flag that you will find additional software gaps during the implementation process. As the number of gaps increase, so does the likelihood that you will encounter cost overruns, workarounds and, ultimately, failed projects.

3. Understand How the Vendor Overcomes Implementation Hurdles

ERP projects are significant undertakings, and no matter which vendor you select, there are going to be hurdles that arise in the implementation process. Thus, it is critical to determine how the ERP company is going to react to challenges during the implementation process.

Some specific questions you may want to ask the vendor are:

  • We find a gap in how the software handles one of our business processes. What is the remedy to address this gap?
  • We discovered that we did not purchase a required module for our business up front. What is the additional cost to add that to the scope of the implementation?
  • We do not find the consultant you selected for our project to be a good fit. What is the process for replacing this resource during the implementation?
  • We discovered a few corner-case scenarios during the end-user training that we forgot to account for in the process design phase. We need to take an extra month to re-design these processes. What is the impact to our project cost?

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Article Credit: IW

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