Software advisory firms have been helping organizations evaluate and select ERP software for decades and methodologies have become relatively holistic in their approach, with one key exception:
evaluating and selecting an ERP implementation partner.
Ask any ERP consulting firm how they evaluate the implementation partner, system integrator (SI) or value-added reseller (VAR) for the selected software and you will get some very convoluted answers. What most are telling you is that they don’t really evaluate who will be implementing the software and will only evaluate the software itself.
This is especially true if you have selected a lower-cost provider or negotiated too hard on scope or cost. In most cases, don’t expect too much diligence to go into the SI evaluation when using an advisory firm to select your ERP. You will likely encounter biases even if you are using a larger system integrator such as Deloitte, Accenture, or Capgemini.
Broad experience and lack of bias is important in decisions such as how to select between SAP S/4HANA vs. Oracle Cloud ERP or any other ERP systems. Just as importantly, it is also important to help select an implementation partner.
While many firms will loosely state that they do evaluate the implementation partner, consider the following when working with a software selection firm:
- Ask directly if they have any partnerships or alliances with software implementers: Some firms that claim to be “independent” still have arrangements with system resellers. They can claim independence in that they don’t take kickbacks directly for software recommendations or sales, however they may still benefit on the side from partnerships and recommendations to reseller firms.
- Ask if they have a methodology for selecting the best implementation partner: If you are told that the methodology for selecting an implementation partner is the same as selecting a software, look elsewhere. With software evaluation you are evaluating software functional fit to your business needs, whereas with an SI or VAR evaluation you are evaluating people and implementation approach. Another common response is they will take recommendation from the system provider. While some OEMs are more direct on which of their resellers are used in certain circumstances, ultimately you are the customer and have a choice.
- Ask if they have any preferred implementation firms they have worked with in the past: Here’s the catch to this one; the answer should be “yes”. Any consulting group that has been in business for any length of time and has experience with ERP implementation should have gained some favorites. Having this background and knowledge of the industry can be valuable in helping navigate the waters of SI’s and resellers. The appropriate follow up question is do they have any financial incentive to select a particular firm over another. The answer to this should clearly be “no”.
- As if they can state their independence in their contract: As questionable as some firms may be in how they answer the above questions, few will risk contract fraud. Just be sure the wording is clear to what you are looking for. Terms such as “independent” are too vague, and watch for slipping around the difference between software vendors, OEMs, SIs, VARs, etc. This is an important evaluation criterion to help find the best independent ERP consultants.
- Expect to pay for implementation partner evaluation: You do get what you pay for in the consulting world, and if you are expecting to receive implementation partner evaluation as part of the system selection for no extra cost, you are going to be disappointed. If you are told that it is simply “included”, take another look at the methodologies and deliverables you will get. Ultimately, as you press a firm on cost the services provided will need to be scaled accordingly.
There is a vast array of system implementation firms. While some integrators and resellers work with a variety of systems, some focus on one particular solution. Some have geographic specialties, several have focused vertical knowledge and some even have IP that is build onto an ERP platform. It is becoming more critical to get a good implementation partner along with the appropriate software in order to realize benefits from enterprise technology.
Paying close attention to this aspect of your digital transformation will help you avoid ERP failure. If you feel you need help, don’t hesitate to reach out to an independent advisory firm like Third Stage Consulting for help.