ERP News

Selecting Your Final ERP Vendor

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Selecting the right vendor for your ERP implementation is a critical step in a successful project.

The whole arduous process – the research, whittling down the short list – builds up to this. It’s important that you take the time to get your final selection right.
Typically you will start the final selection with a short list of three or four vendors. Now is the time to get thoroughly familiar with the vendors on the list. Before the process is done you will know all of them quite well and they will know you.

 

It’s important in this process to share information about your company and your goals freely with the vendors. The more they know about you and your circumstances the better they will be able to help you.

 

Similarly, the vendors should be willing to share a lot of information with you. One thing that is critical in the selection process is the vendors’ plans for the future. Expect each vendor to have a road map for improvements in their products, including a rough timetable for when these improvements will be implemented. This gives you assurance about the vendors’ future.

 

Just don’t make decisions counting on future improvements and especially when they will arrive. These things are notoriously slippery and you don’t want to base your decision on specific features which are supposed to arrive at a specific time.

 

An important part of the selection process is getting a good demonstration or demonstrations from each of the vendors on your short list. The demonstrations are a chance for the vendors to show what their products can do – and for you to see how they perform in more-or-less real life.

 

It’s important that demonstrations be carefully planned to give you the most information about the product. The vendor will have a canned demonstration that shows off the strengths of their products. It’s important that you go beyond that to focus on the issues that are most important to you.

 

Work out what you want to see covered before the demonstration and share that information with the vendors. You should do this in some detail so the vendors can be responsive to your needs and you can get the maximum information.

 

Your audience for the demonstrations should consist of a committee representing the major stakeholders in your business. Give everyone plenty of time to ask questions and to get hands-on with the system, if possible.

 

Obviously these demonstrations go far beyond the PowerPoint-based demos you were given in when you were developing the short list. It’s important to observe carefully and take all the time you need to satisfy yourself as to each product’s capabilities and ease of use.

 

The next step is to submit a Request For Proposal (RFP) to all the shortlisted vendors. This should request detailed information on the product, cover any points not covered or left unclear in the demonstrations and, most importantly, ask for bids on the job.

 

This RFP is the beginning of a back-and-forth process to refine both the specifications for the final product and the costs, including the annual costs of licensing and maintenance. Especially in the case of the cost numbers, realize this is only the opening step in the process and you can’t rely too much on the costs presented in response to the RFP.

 

Once you’ve received and analyzed the RFPs, it is time for the selection committee to sit down and make a decision. This may take several days as the committee members consider the pros and cons of each bid. This is complicated by the fact that there is seldom a clear winner which is markedly superior to the others. It will probably take a good deal of negotiation and discussion among the committee members to arrive at a decision.

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