While there is an abundance of white papers on “How to Select an Enterprise Resource Planning System,” most articles tend to focus on functionality requirements, technology issues and total cost of ownership. Though it’s obviously important to verify that the product features, platform and price of a system meet the requirements of your organization, it is extremely important to understand that functionality is the only thing that a demo can provide. There are other elements that are impossible to ascertain from a demo or in discussion with the ERP vendor.
Due diligence on the less tangible elements of a vendor’s total solution – such as software quality, ease of implementation and responsiveness of customer support – can only be accomplished by asking other companies that have used or are using the ERP systems being evaluated. Not performing the same level of due diligence in checking references that was performed in examining product functionality invites critical shortcomings to remain hidden until well into the implementation process. By then it may be too late to change.
In short, reference checking is the only source of truth in the ERP selection process for these other key elements that are often overlooked in ERP selection process. Not performing solid due diligence on these items will greatly increase the risk of a bad decision.
Top 5 Critical Factors
When checking references it’s important to ask the right questions. Product functionality questions are mostly resolved during the software demonstration process, so the objective of checking references is to measure the elements of a vendor’s total solution that cannot be reliably validated by the vendor through presentations and software demonstration. The Top 5 are:
- Quality of the ERP software
- Quality of the vendor’s customer support organization
- Time, pain and cost of implementation and data migration
- Scalability of the ERP software
- ERP vendor’s commitment to your success
Quality of the ERP Software
Obviously, high quality software is an essential requirement in an ERP system. The frequency and severity of software bugs is a critical issue that can impact a company on many levels, from the consistency of financial reporting to the reliability of serial number and lot tracking. Software quality is an issue that cannot be resolved during the sales cycle in a demo or sales presentation. A sales engineer won’t provide a true representation of a system’s quality if they are having problems with a particular release or new product. Product specialists carefully script their demos to work around known issues so they do not come into play.
It’s especially important to gauge the quality of ERP systems that are new to the market or promote the fact that they are built on the latest technology platform. Sales reps will maintain that having the latest technology is a key advantage over a competitor’s more established system, but in many instances new software systems and products developed on emerging technology are unproven and lack market support and real world validation.
Usability is a quality issue that most vendors will claim, but is hard to validate without sitting down and using the software for an extended period of time in a real-world environment. One person’s definition of “user-friendly” can vary wildly from another’s based on the level of experience and simple preferences. If the system has bugs or shortcomings that require “work-arounds,” users will be tasked with performing multiple steps to achieve a routine outcome and will quickly become frustrated with the software.
Investigate the genealogy of the software. Who authored it? How many owners or name changes has it undergone? Was the product developed by the vendor or acquired through a merger or buyout? If the vendor is a reseller, do they have a position of strength with the software developer if needed?
Gauging the quality level of a software system is an important consideration, and is an issue that can only be resolved outside the controlled sales environment. Talking to and asking questions of a good cross-section of individuals who are already using the system at their companies will be a good indication of the quality level of a system.
Questions to ask:
- Is the product reliable? Does it do what it is supposed to do?
- Does the system lock up frequently?
- How many bugs are in the system?
- Are there any work-arounds that you have to perform and how long have they been known issues?
- How many software products does this vendor sell and support – are they focused on ERP?
- If the vendor acquired the software:
- When did the acquisition occur?
- How many other platforms does the vendor sell/support?
- If multiple platforms are being sold it may result in customer support and/or development dilution. In addition, you’ll need to fully understand if you will be forced to migrate to a higher level platform as you reach your growth objectives.
I will continue the detailed discussion on the four remaining elements on my next post.
