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How to Make Sure Your ERP Vendor Doesn't Drag Your Good Name Through the Mud

Published on by Adam Bluemner

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Really? “Drag your good name through the mud?” That’s a bit dramatic, no?

It is—but rightly so.

If you find yourself leading an ERP selection and implementation project, the reality is that you’re staring down one of the largest technology projects of your career. Your ERP project success or failure is bound to be a defining moment.

Modern ERP systems provide the lion’s share of software functionality to support accounting, billing, purchasing, sales, and operations activity. It’s a major opportunity to impact your company’s overall profitability. But there will also be no shortage of users to let you know if the software comes up short!

Qualification tips for selecting the right ERP vendor

Nike, Hershey, HP, and any number of other name-recognizable companies have proven that no company is immune to the possibility of an ERP disaster.

The ERP vendor you select—and how well you’ve vetted them—will play an enormous role in securing your hero or goat status.

How can you emerge from an upcoming ERP project having delivered a profit-driving, efficiency-generating software solution?

Keep the following do’s and don’ts in mind as you undertake your software vendor selection process:

The Do’s

Do filter out providers who aren’t focused on your needs

Your initial conversation with a vendor will tell you a lot. If your vendor isn’t intensely curious about your needs and pain points, take notice. Then take action.

The fact is, there is no standard ERP implementation. One size doesn’t fit all.

ERP is not a widget. It isn’t a commodity. It’s a toolbox holding the tools you need to enable effective business processes via a suite of sophisticated software. Your prospective integration partner needs to clearly understand your needs. The better their understanding, the more likely they are to pick the right tool for the job—and apply it in the right way.

Size of the install base, details of the new release version, awards and recognition? All are very nice and worth hearing about—eventually. But the prescription for the cure should never precede the diagnosis.

Do insist on a detailed ROI justification

The least expensive software solution is always the best one.

That’s not a recommendation that the CFO of a major multi-national enterprise should pick up a copy of QuickBooks at the local Office Depot. That would represent an incomplete and pretty uninspired understanding of what “least expensive” really means.

The true cost of software extends far beyond the price tag. In fact, the price tag likely won’t even represent the most significant cost to consider.

Many cost factors beyond licensing and implementation costs need to be evaluated when it comes to an ERP purchase, including:

  • The opportunity cost savings of improving efficiency
  • Projections on the revenue impact of improved data-driven decision making
  • The net financial impact of the energy and time required to switch systems
  • Ongoing support costs

Only after all of these factors are considered will you be able to clearly determine the “least expensive” option. If your current set-up lacks efficiency and visibility, you may even find that standing pat and expending no funds on a new software represents the most costly option.

Because of the complexity of fully calculating complete costs, it’s something that your vendors should be involved in. A good implementation partner should be able to fill in many of the blanks you need to complete your ROI case, including: project lead times, resource requirements, and estimates of the financial impact of process improvement.

Do explore product recommendations with in-depth demos

A canned, out-of-the-box sales demo isn’t going to cut it.

Of course, it’s not realistic to expect vendors will model each of your custom business processes. That would require a full implementation. And the fact that those don’t come cheap is why you’re spending so much time qualifying the right solution in the first place.

But you can do the next best thing.

Identify 2-3 of your most important or unique business processes. Collaborate closely with vendors to give them all of the detail they need to understand your ideal system behavior. This is your opportunity for a real ERP vendor Pepsi challenge.

After the demos, ask yourself the following questions:

  • Who understood your needs?
  • Which offering seemed the easiest to use?
  • Whose system seemed most flexible?
  • Which solution had the necessary permissions and approvals to control other workflows?
  • Did any of the providers resist the request to demonstrate how their software would meet your needs?

The Don’ts

Don’t forget to check on vendor certifications and training

The speed of technological change is fast. ERP software is no different.

The major developers of ERP software certify and train the authorized sellers of their software. Certification programs not only help vendors stay current with changes in the code base, but also provide a mechanism for buyers to ensure their providers are up-to-speed.

In addition to checking employee certifications, buyers can inquire into the partnership level of their vendor with the software developer.

Developers often distinguish partnership levels by tier, such as gold, silver, and bronze. Partnership level is generally determined by volume of sales and the accomplishment of program requirements related to training. As such, it can offer another way to verify the experience of potential integration partners.

Don’t assume your vendor’s support group is as well-staffed as their sales team

Every vendor needs feet on the street. Not only that, an experienced and consultative sales contact will play a critical role in guiding your project toward success.

It’s important though that your vendor’s back-end support team is just as completely staffed as their sales department.

No ERP implementation is perfect. There will be bugs and issues that need to be resolved. Things change, as well. New business opportunities will require software support. Process changes will create a need for workflow updates.

In order to make sure your prospective partner is as committed to support as they are to new client acquisition, it’s worth your while to ask vendors for a roll call of their support members and info about their qualifications.

Don’t skip calling the reference customers

It’s a bit of an odd call to make, isn’t it? There you are—an accomplished business professional—dialing up another professional with absolutely nothing to offer and just the hope that they’ll help you out by sharing their experiences. It’s not the normal this-for-that exchange involved in most business communication. And that can make it feel a bit strange.

Be that as it may, it’s a call that must be made!

Ultimately, most references will be happy to share their experiences. It’s human nature.

And, the benefits of thoroughly checking references from a buying perspective aren’t hard to see. In fact, the benefits are so obvious that it almost seems silly to waste a spot on this list recommending reference checks.

Except…

Most buyers never actually check references. In fact, one of the software providers we work with estimated that fewer than 20% of their customers contact existing users before purchasing software.

The tendency to forego reference checking is a bit hard to figure. Most companies wouldn’t hire a $15/hr office employee without a quick background screen. Meanwhile the purchase of a 5 or 6 figure software system is often made without a similar level of due diligence.

So, go ahead. Buck the trend. Check with your vendor’s existing users and make sure they’re as satisfied as you hope to be.

If you would like to connect with ERP vendors able to meet the best practices suggested in this article, you can. Check out our free software matching service.

Adam Bluemner

is a Managing Editor at Find Accounting Software. He's been helping software buyers make informed investments in business software since 2004.

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