Having been in the ERP consulting industry for 20 years now – and having launched two consulting firms focused on this space – it may seem strange to hear me say it. But, it’s true: you may want to consider ditching your complex selection project.
With the number of options in the market, it’s easy to get caught in analysis paralysis. Leading ERP vendors, their smaller competitors, and even upstart software firms provide a range of viable options to company’s of all industries, geography, and size. But, it doesn’t need to be as complicated as it may seem.
So, if your ERP selection process or consultants are leading you down a path of an exhaustive long list, requests for information (RFIs), or overly detailed and unprioritized business requirements, then one of two things is happening. Either 1) your consultants and team members are spinning their wheels because they don’t know enough about the ERP software space, and/or 2) you are spending too much time on money that could be better spent elsewhere.
So, what’s the problem? Here are five reasons why you should streamline your software selection process:
Your software selection doesn’t need to be complicated. For most companies, there are just a handful of solutions providing the best fit for those organizations. Larger organizations typically just have a few viable options, while companies in specific industry verticals find that a handful of solutions will fit their needs.
For example, a $5B+ company isn’t probably looking much beyond SAP S/4HANA, Oracle Cloud, Microsoft Dynamics, and maybe Infor. The list is often further narrowed based on industry or culture. Beyond that, there typically isn’t huge value in exploring much beyond those common solutions.
Or, consider a mid-size retail and distribution organization. The larger players may be overkill for that company, while there are a just a few mid-market solutions that handle retail, POS, and omni-channel extremely well. Looking outside this sample isn’t a good use of an organization’s time and resources.
There are always exceptions to this rule – such as companies that opt for a best-of-breed or niche solution – but for the most part, many companies and consultants overcomplicate evaluation processes.
Every company has limited time, money, and resources. Every dollar and hour spent on an ERP evaluation and selection is money and time that could be spent on a successful implementation. As I’m fond of saying, I’d rather have an imperfect software selection with a great implementation rather than a great selection with an imperfect implementation.
In addition, functional and technical fit is rarely a determinant of implementation success or failure. Instead, things like organizational change management and business process management during implementation are the key drivers of success (or failure). I’d rather double-down on these investments than get bogged down in a drawn-out evaluation process.
Inexperienced consultants are notorious for generating hundreds or thousands of business requirements that don’t matter. Often times, most of these requirements are either handled by most ERP systems in the market, or they aren’t key differentiators for the company conducting the evaluation. Either way, it’s too easy to get lost in analysis paralysis.
Instead of focusing too much on current business requirements, that time and money is better spent defining what your business processes are going to look like going forward. That future state will not only help you identify which of your short-list of software solutions is the best fit, but it will also help you identify improvements you can start implementing now – even before you choose a new ERP system.
Don’t get me wrong – I’m not suggesting that you completely ditch your ERP selection process. However, it probably doesn’t need to be as long and drawn-out as your consultants or internal team members might be suggesting.
So skip the RFIs, long-lists of 8 or 10 or 20 vendors, and lists of meaningless business requirements and demo scripts. Instead, leverage independent and very knowledgeable third-party experts (such as Third Stage Consulting) that can help you quickly arrive at a decision, or perhaps validate a decision you’re already leaning toward. Focus instead on getting to a successful implementation.
Momentum is a tricky thing. It’s great once you have it, but it’s very difficult to overcome losing it. Software selections that take too long tend to create skepticism, uncertainty, and burnout among your project team members, employees, and executives. Fast-tracking the process helps ensure that you start your implementation with plenty of gas in the tank.
I’m amazed by how many projects lose momentum before implementation ever starts. Very few reach the Third Stage of ERP Success (watch future blog posts for more on this), largely because the implementations are doomed before they ever start.
So if you’re about to start an ERP selection, think about how you can strip down the process to the bare essentials, leverage outside experts to get you there quickly, and focus more of your time on implementation. This will help you achieve success where so many fail.