The sizzle as well as the steak...ERP implementation is the new battleground in the evaluation process
05/01/2012
It is no surprise that most ERP deals involve ‘growth companies’. Organisations of between $50 million and $1 billion in annual revenue - typically looking to either replace outdated ERP systems or jump into the technology for the first time - are driving a lot of the action.
The vendor community has responded quickly and ERP solutions tailored to this segment abound, making it a buyer’s market. But one of the most striking facets of this market has been the realisation that growth companies demand more.
They demand more than the “standard” ERP that is already out there for all to use. Growth companies, driven by speed, see the innovation within ERP systems but - like the vendor community that serves them - know that such innovation is quickly copied. Although Infor will innovate to stay ahead, we recognise that a degree of similar innovation may be expected in the vendor community.
So selecting which ERP vendor to work with becomes about more than just the software. Implementation has become the new battleground. Selection begins from a point where a business has already matched the software to their processes as closely as possible.
While many companies often believe they are more unique than they are and that they can't change processes, industry leaders realise they need to be willing to look at change to match the design of the software once a solution has been chosen. Otherwise the project and business are headed for some very expensive customisations.
This makes the implementation team and the upper management support the most critical pieces in the jigsaw of a successful software investment. Will the implementation be supported from the top down and will the team be given the necessary authority to make change decisions?
The vendor must therefore have a number of successful implementations of the software, within that industry. Expertise and familiarity with the specific issues of the end user business is vital. Vertical expertise needs to be as precise as possible. This is not just, say 'manufacturing', or even 'process' or 'discrete', but truly industry specific –'baking', 'brewing' or 'chemicals'.
Ideally this needs to extend to the business models at work and specific geographies of the customer. And of course, the vendor track record has to include bringing in previous, similar projects on time and on budget.
Speaking of which, at this early stage it is also important that the vendor has a local presence to avoid expensive travel related costs, and has the capability to deliver the highest quality/ lowest cost and risk implementation support through an in-house offshore capability and a strategic partner network.
Many of these growth companies often report that it is very important that users don’t feel threatened and overwhelmed when learning a new system - or changing how they may have been doing a certain task. A reference list that a potential customer can call and ask questions as to how the implementation went is often the first point to resolving this. Beware a vendor that cannot provide one.
Looking at the user experience, it is important that a vendor can show how process changes will be addressed. Training - preferably delivered by the software companies’ own personnel - is a vital part of delivering a successful implementation.
This team should also have a thorough understanding of the end user business (going beyond just the procedures in use at the time). The training needs to be backed by a team of experienced consultants who can match system functionalities with business needs. Even better, these points of functionality fit should be part of the product already – straight out of the box.
All of these elements of “fit” need to be wrapped up in a vendor that is financially stable and is willing to commit to the success of its customers. This commitment may be shown in flexible finance options (for both purchase and support) or in supporting both global and local levels of implementation.
Successful software investment is about more than just functionality and features. The investment of time and resources in driving a winning implementation are just as – if not more - vital for businesses growing rapidly and aggressively. Success is not a tick in a box – it is the ongoing improvements in performance that ERP enables: and to deliver these, vendors must bring the service sizzle and well as the software steak to the table.
Posted by Peter Taylor,
Senior Director: ICS EMEA