Disclaimer: The articles in this blog post are those that I
found interesting and relevant to the topic of ERP and technology in
general. I have no commercial association with any of the entities
mentioned in this article. I may be following a few of these entities on
LinkedIn and even some of these entities may be on my LinkedIn or
Social Media network. These articles are selected purely based on their
relevance to the objective of this blog, to promote ERP. Finally, the
summary is mine. While I stay close to the points in the articles, I
also elaborate a few of them based on my understanding.
The Short URL for this post is https://goo.gl/r9LRJY
The steps in ERP Implementation are:
1. Planning the Digital Strategy / Roadmap
2. ERP Product Vendor Evaluation and Selection
3. Implementation partner / System Integrator Selection
4. ERP Auditor Selection
5. ERP Implementation
6. Integration with external applications
7. Post Implementation Support and Stabilization
We covered the Step 1 above in our series in Week 8 which was focused on Digital Strategy. The focus of the current week is point number 2 above, ERP Product Vendor Evaluation and Selection. We will cover the basics of preparing RFI and RFP, How to identify your critical requirements, to know which ERP application is suitable for your company etc. I am very happy to present this selection.
The first article in this selection cover the difference between RFI and RFP and discusses the content and purpose of each document. While RFI is used to scan the market, RFP is used to get detailed proposals from shortlisted vendors. Second article, a great one, discusses the five step structured process to ERP selection. This articles has many links to additional useful material. The third article goes deeper into RFP evaluation, one of the steps in the five step process. It discusses the benefits of a structured approach, a Weighted Averaging process to mathematically decide on the chosen vendor and some don'ts like never accept lack of clarity in a vendor. The fourth article from Panorama Consulting discusses five overlooked activities that will increase the lead time of an ERP selection process. The fifth article discusses the approach that an SME might take to approach ERP evaluation.
Do not miss additional reading. There are some great inputs there.
I enjoyed curating this blog post. I hope you enjoy reading it as much as I did writing it. I hope you will read and comment on my blog post.
https://erpnews.com/differences-erp-rfi-erp-rfp/
This is a short and crisp article that explains the difference between an RFI (Request For Information) and RFP (Request For Proposal). RFI is used by an organization to gather information about ERP options and to help narrow down potential partners. RFIs are issued in the exploratory phase of ERP Project and are used in combination with RFP.
The primary goals of an RFI is to explore the cultural fit between the two organizations. You want to explore the working styles and collaborative approaches. You will also use RFI to explore the best fit for your specific functional requirements. For example, Jewellery Industry has a need to handle multiple Units Of Measure (UOM) for the same item and you will seek applications that can handle that requirements.
Irrespective of your goals, it is very important to ask smart questions in RFI. Some of the questions are typical ERP implementation time frame, vendors' experience with working in the same industry, project management approach, differentiation from other vendors etc.
RFP is a more targeted document that 'tells' the vendors your project goals and ask them to send you specific, customized proposal to meet your project needs. This will help you identify the product vendor and / or the implementation partner. In response to an RFP, you expect the Vendors to commit to pricing, timing of implementation. With RFP you want the prospective vendors to show what they can do, how and when they will do it, what value they will add to the company etc.
Organization has to be specific about their requirements in an RFP. These could include key features and functional requirements that ERP should meet, deployment method (Cloud, Hybrid, On Premise), mobile apps, expected reporting capabilities etc. You will also consider ongoing maintenance including SLAs and support options, frequency of upgrades and training options to ensure that system will continue to grow with your company.
Loved this article.
https://www.erpfocus.com/erp-selection-checklist.html
This
is an excellent articles with a number of back links to additional
relevant material. An average ERP selection process takes about 7 month.
By following the five steps given below, an organization can reduce
that time.
- Check for warning signs that ERP change is needed
- Survey key stakeholders and draw up an ERP requirements list
- Shortlist potential vendors
- Send out an RFP and evaluate responses
- Invite vendors to demo and make the final selection decision.
The
process starts with the awareness that an ERP change is needed. The
current application was selected long time ago and company has moved to
new areas. The compliance requirements might have changed and the
existing system is unable to cope with. Or the technology is old and will
not integrate with the new technology.
Once you decide to move to a new ERP, the first step is to identify key stakeholders. Different groups will have different expectations. For example senior management may be interested in analytics while the end user may be interested in UX and ease of data entry. Warehouse staff will be interested in mobile integration. Stakeholder identification will ensure that no interest group is left out. Next step is to draw up a requirements list. This should include three aspects. One gaps in the current requirements, new expected features and scalability. Other questions in this stage may be related to Cloud vs. On Premise and whether Industry specific ERP is required.
The next stage is Vendor short listing. You could use competitor analyze, RFI, recommendation from your network etc. Each of these approaches have their pros and cons. For example competitor analysis will tell you the application prevalent in your industry, but it won't consider your company culture. Network recommendations can become informal and focused on peripherals and subject to recency effect. While RFI aids comparison, it is a time consuming approach.
Once the vendors are shortlisted, send RFP to the shortlisted vendors. An RFP should contain, at the minimum, a project summary, timeline, requirements, vendor qualifications and proposal evaluation criteria. Other articles in this post will give you additional points on this subject. Ensure to have a uniform evaluation criteria for the RFP responses.
Final stage is the product demo. Own the demo, ensure that a demo script is delivered to the vendor beforehand. The following internal stakeholders should be invited to the demo, HoDs, representatives from key user groups and Executive Sponsor. HoDs and user groups will have specific expectations, so it is important to invite both these groups. You can use a weighted average criteria to evaluate the demos
Great Article. Thank you ERP Focus. Thank you Kathryn Beeson.
https://www.erpfocus.com/evaluate-erp-rfp.html
It is important to have a criteria. The advantage of an RFP evaluation criteria to the organization are many. They will help identify the critical requirements, act as a template to future decision making, help in vendor negotiation and elicit hidden requirements. RFP evaluation can be done by an individual or a group of senior managers. It is important that the decision is made by the business managers not the IT managers. It has been found that ERP Implementation where business was not a stakeholder tend to fail.
Author suggests a weighted average method for RFP evaluation. First step is to not down the critical requirements that the ERP should meet. This could be platforms, module expertise etc. For example, in Oracle, OPM is the most difficult module to implement. If the organization is going to implement OPM, the vendor's expertise in implementing the same should be an evaluation criteria. Once that is done, prioritize these requirements in a scale of 1 to 5. These values will be the weights. The hightest priority item will get the highest weight. For example, in the example above, 'Experience in Implementing OPM' will have a weight of 5. Once this preparation is done, assign values to each criteria for each vendor. The final step is to find the Weighted average value. This will help the organization to identify the top three vendors to go into deeper negotiations with.
Author suggest to review the RFP regularly and refine it to ensure that critical elements are not missed.
What are the things to avoid? Three things actually. One, never make an evaluation decision without making the above comparison. Spend the required time. Two, never accept confused responses to RFP. Ensure that the vendor and you are on the same page on all requirements. Three, make the weighting structure simple.
Nice article...
https://www.panorama-consulting.com/realistic-expectations-the-truth-about-erp-selection/
One of the question that is asked at the beginning of ERP Selection is how long will the process take. It is better to set realistic time lines rather than put oneself under time pressure and overlook critical activities. There are five commonly overlooked activities.
- Defining Organizational Goals
- Developing an IT Strategy
- Evaluating Deployment Options
- Defining Business Process
- Reviewing Statements of Work.
As a part of the selection process, define how ERP will align with your business goals. Make them specific and measurable so that you can calculate the RoI. Develop a business case, estimate the business benefits and criteria to measure RoI.
Ensure to have an IT strategy (more importantly a Digital Strategy). Understand your current state and the current application landscape. Understand the critical problems that ERP will solve. Focus on all functional areas, even though your current problems may be related to only one of them. Lastly, identify KPIs to track the progress of the entire ERP process.
Deployment option (Cloud / Hybrid / On Premise) is a critical decision to be made on the basis of Organizational specific and compliance requirements. Cloud could be cheaper, but it will limit your flexibility. Don't be forced into a cloud decision.
Analyze your current business process and group them into three groups New, Modify, Discard. Use this list to evaluate the various options available. We have already discussed evaluation criteria in other articles in this post.
One of the most challenging tasks is to review the Statement of Work (SOW) from the Vendor. Evaluate each cost element thoroughly. Ensure that SOW include essential costs like support costs and maintenance fees. Since this is a time consuming activity, you might need external, independent consultant expertise to undertake this activity.
It will take about a minimum of 14-16 weeks to complete the above activity. The article by Ms.Beeson of ERP Focus, covered in this post says it will take about 7 months (28 Weeks). I think the real number is somewhere in between.
https://www.forceintellect.com/2017/06/06/how-to-evaluate-best-erp-for-indian-smes/
I was intrigued by the word 'Indian' in this article and that is why I read it. While there is nothing 'Indian' about it, the article make some good points. Before evaluating an ERP, Organization has to decide on the critical requirements that it wants ERP to meet. These include existing technology landscape in the Organization, business requirements and the expected process changes. Once you are clear of the requirements, you move to the evaluation phase. Ten evaluation criteria are provided including How ERP will improve the current system - process automation, embedded analytics, integrated CRM and integrated mobility, Whether the ERP can be customized, User experience, Performance, Scalability and Security. Some of the criteria like 'Training' are more applicable to SI Evaluation rather than a part of ERP evaluation.
Reasonably good article, could do with minor editing.
Additional Readings
1. How to build an ERP RFQ (https://www.erpfocus.com/how-to-build-an-erp-rfq-952.html)
2. Criteria for evaluation of an ERP Software ( http://www.essindia.com/about-us/resources/articles/230-criteria-for-evaluation-of-erp-software)
3. How to select, compare and evaluate ERP Vendors (https://www.nigelfrank.com/blog/how-to-select-compare-and-evaluate-erp-vendors/)
4. Four essential features to include in your ERP requirements. (https://www.erpfocus.com/essential-erp-feature-requirements.html
5. ERP Request for proposal (RFP): What do you want your new software to achieve? (https://www.thirdstage-consulting.com/erp-request-for-proposal-rfp-what-do-you-want-your-new-software-to-achieve/)
6. Tips to streamline your ERP Vendor Evaluation (https://www.thirdstage-consulting.com/tips-to-streamline-your-erp-vendor-evaluation/ )
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