When it comes to trying to choose an ERP system vendor, there are so many different options and considerations, it is often difficult for businesses to know where to begin their search. Added to that, once a vendor is chosen, it is hard to establish whether all of the necessary requirements will be met, whether the project will be completed to budget and whether it will be completed on time.
'55%-75% of all ERP projects fail to meet their objectives.' - Gartner
According to Gartner, they estimate that 55%-75% of all ERP projects fail to meet their objectives. This is a staggering figure considering the business-critical nature of an ERP system and taking into account how much money, time and effort goes into an ERP system selection and implementation.
Here are some key questions companies should ask their solution vendors when looking at possible ERP software systems. These will help to ensure that the ERP software selection, implementation, system go-live and ultimately, the long-term usage of the system, goes according to plan.
Top 10 Questions to ask the Software Vendor
1. What kind of process mapping and investigation of current business practices is carried out prior to implementation?
Failure to investigate a business' current practices and processes can lead to unnecessary, incorrect and inaccurate processes and functionality being implemented into the business, which in turn can lead to a number of issues once testing and system go-live take place.
2. Does the application come with a business process designer that the customer can amend?
While a business may have a standard set of processes when the ERP project starts, as the project continues and as business needs change, these processes may need to be amended, requiring additional flexibility.
A business process designer, inbuilt within the ERP system, provides this greater flexibility, allowing changes and amendments to be made by the customer, making this process easier, less complex and less costly, as an additional fee is not required to make the desired changes.
3. Does all functionality come as standard or is the ERP software modular-based, requiring additional decision-making regarding necessary modules?
When purchasing ERP systems, businesses need to fully understand exactly what is included in the software package being purchased.
If the system is modular-based, an analysis of these modules, and their features, must be carried out to establish whether all of the modules are required, or whether some may not be needed initially and can be purchased at a later date if necessary.
4. What stock control software is available and what functionality is included?
Establishing exactly what stock control capabilities are available within the software is crucial in order to ensure that any presumed/expected functionality is available for use once the software system is implemented.
- Is batch tracking functionality available?
- Are produced dates, receipt dates and expiry dates held for each stock item?
- Does the system include stock forecasting capabilities?
- Is kitting functionality available?
- Is unit of measure (UOM) functionality available?
- Can images be held for each stock item?
5. What kind of WMS features are available within the system?
Effective WMS software features and functionality are crucial for accurate and efficient warehouse management.
Key functionality that may be required include:
- Multiple warehouses or depots
- RF paperless picking
- Split picking by pick area and UOM
- Consolidated picking
- Warehouse automation integration
- Stock count functionality including Cyclical stock counting
- Replenishment functionality
- Delivery route management
6. What level of support is provided prior to, during and after an ERP software implementation?
The level of support available from the software vendor is key, particularly surrounding implementation and go-live of the software.
It is necessary to establish an agreement with the software vendor regarding support requirements. These include methods of support, support times and agreed response times regarding the various support issues that may arise.
It is vital to ensure that should the system go down at any stage, that the software provider will be available and will commit to having the system back up and running as soon as possible within the agreed time-frames.
7. Is ERP training provided prior to go-live and how long is the training expected to take?
Training is one of the most important requirements for a successful ERP implementation. The end-users, those who will ultimately be using the system on a day-to-day basis, must be trained on all of the available functionality within the system.
In-depth training allows for decisions to be made regarding what functionality and setup is required immediately and ensures that the users know what extra functionality is available to them at a later date where necessary.
Adequate time-frames must be factored into the scheduling of training, ensuring both the trainers and trainees are available, not only for the training but also for any follow-up questions and issues that may arise.
8. What exactly is within the scope of the ERP software implementation? More importantly, what is not within the scope of the ERP software implementation?
The scope of the ERP software implementation project is one of the most important requirements.
An accurately defined scope is crucial so that both the vendor and the customer are fully aware of exactly what is covered under the project and more importantly, exactly what is not part of the scope.
The definition ensures that there is no issues / surprises later whereby functionality, that may have been presumed to be included in the software system, does not materialise in practice.
9. What is the expected cost of the project? Clarify whether the cost includes implementation and training costs.
An accurate and detailed quotation and cost outline is key to ensuring the project runs in line with the budgeted costs. One of the key issues with ERP implementations is the over-running of the budget.
According to a survey carried out by Panorama Consulting Solutions, over 50% of the projects experienced cost overruns.
'In our survey, over 50% of the projects experienced cost overruns.' - Panorama Consulting Solutions
What is the expected time-frame between project sign-off and go-live of the ERP system?
A defined and accurate plan and timeline is crucial for the success of the overall project.
According to the survey mentioned above, carried out by Panorama Consulting Solutions, over 60% of the projects experienced schedule overruns.
'In our survey, over 60% of the projects experienced schedule overruns.'- Panorama Consulting Solutions
Points to Note
Some additional points to note regarding preparation for an ERP software upgrade include:
1. Vendor Relationship and Attitude
What kind of attitude does the software vendor have? Are they collaborative and co-operative or are they more restrictive and prohibitive in nature, controlling how the system can be used and implemented into the company. For example, does the system fit your business or must your business change to fit the system?
2. Project Scope
As already mentioned, clarification of what is and is not inside the scope of the ERP implementation project is critical. This will ensure both sides fully understand the requirements leading to a more efficient implementation process and ultimately a more efficient system.
3. Never Assume
Never assume that a piece of functionality is available - do not overlook the obvious. Always clarify every requirement prior to sign-off on any specifications.
Should the above questions be asked, business' will have both the required information and the peace of mind necessary when undertaking their ERP software implementation project. These will lead to a smoother and more successful ERP software implementation and more importantly, the increased achievement of the ERP project objectives.
Syspro: Inventory, http://www.syspro.com/product/inventory
Pathguide: WMS - Warehouse Management, http://www.pathguide.com/WarehouseManagementWMSAdvanced.aspx
ZDNET: ERP Research - Compelling advice for the CFO, http://www.zdnet.com/article/2013-erp-research-compelling-advice-for-the-cfo