Your company’s Enterprise Resource Planning (ERP) suite may arguably be the most complex, difficult and mystifying application in your organization’s entire business software arsenal, so if it’s time to replace it or upgrade it, you need to prepare big time. You need to know how to find the right vendor, how to ask the right questions and how to plan for the project’s eventual success from the start.
But where to begin? ERP isn’t something that enterprises deploy or replace regularly. Because it’s not a process that IT leaders embark upon very often it’s a challenge when it’s time to make a move. The lack of regular experience with ERP overhauls can put you and your IT decision-makers at a disadvantage when it comes time to sit down with your potential ERP vendors to sign on the dotted line for a new deal.
ERP is one of the largest and most expensive business-critical applications inside your company. A fatal mistake here and millions of dollars will be wasted, months or years of delays will occur and a myriad of other potential problems can and will haunt your company for a very long time. So with such huge consequences at stake it is imperative to be properly prepared.
After 11 years in the world of IT journalism, writing about user challenges, system glitches, process problems, failed ERP deployments and more, I’ve come to the conclusion that companies and IT leaders would be better prepared to make the right decisions by starting with the basics. That means preventing all kinds of ERP pitfalls by engaging in detailed planning, reviewing high-level research, getting lots of critical analysis of each option, securing a healthy dose of trust and lining up solid expertise and opinions from your most trusted advisers.
I asked Rebecca Wettemann, an ERP analyst with Boston-based Nucleus Research Inc., what she recommends to her clients when they ask critical questions about deploying or replacing their ERP systems. Several central topics are often on their minds when evaluating ERP, she says. That’s where this “5 Must-Haves For Your Company’s ERP Requirements List” comes into play.
*Tracking costs and time to deployment: The top request from clients is to learn how vendors will help them track budget costs and how long the project will take to deploy, configure and get into production, according to Wettemann. “They want vendors to tell them exactly what their budget is and include all the variances that can be involved,” she says. “They also want to know, ‘what’s my timeframe to deploy it?’ That’s probably the most important thing we’re hearing in ERP today from clients.”
ERP customers nowadays are insisting on getting this information from vendors so they can make better decisions and better control costs, she says. It goes beyond just giving them a budget number. The customer wants vendors to help them understand how they arrived at the numbers, she says. That kind of detailed information on cost and schedule predictability is critical as you move forward with your ERP plans, projections and expectations.
*Bring in new-generation planning tools: Use new ERP deployment planning tools that are now available from many vendors, including Oracle and Microsoft. These tools, which use detailed queries that help you figure out what you need in ERP, are available for various vertical industries and can make ERP planning a lot simpler, Wettemann says. Oracle’s Business Accelerators are very helpful in doing these kinds of evaluations before a single server is ever configured. “That’s why we’re seeing clients use them,” she says. “They are sets of tools and templates that automate 80 percent to 90 percent of an ERP or other configuration for a user.”
These kinds of tools require fewer internal resources from potential customers as they evaluate products and include best practices for various industries so they can produce useful information, she says. “We’re seeing the same sort of thing from Microsoft where they’re looking at industry-specific configurations with a lot less heavy lifting.”
*Choose partners wisely: “The right partners are critical,” Wettemann says. “Very seldom do we see any ERP employed where there are no partners involved.” One of the most important things that great partners can do during the process is help you reframe your needs and requests. “Partners can help you to look at changing one of your business processes rather than changing the software” you are evaluating. Often, businesses want to alter the software rather than change their long-standing processes to work with the software as it was intended to be used. That can and will lead to problems and complications. “Every time we customize an application, we run the risk that every time we run a patch later that we will break that previous change and have to customize it again. That’s also why vendors are building more vertical functionality into their products so that customers don’t have to do custom modifications that will potentially break.”
*Network to find the right partners: So how do you find the right partners to work with you to make your ERP deployment a success? Basically, Wettemann says, you should consider the same methods you use to find new employees, new ideas and new markets — such as through networking with your peers in your industry. “Peer references are a critical piece of the equation and I think we’ve seen people become more comfortable talking with their peers about their experiences in these areas. It’s also become easier to vet partners given the availability of so much information out there and the likelihood that someone, especially if they’ve had a bad experience, would be willing to share it online somewhere.” LinkedIn and independent software user groups can be great resources to get feedback from peers, she says.
*Do more research than you think you need to do: This is actually my addition to Wettemann’s ideas above, but I can’t stress it enough. This ERP decision isn’t small. It’s not a movie you are renting to watch once and return it. This is huge and impacts every part of your company, its business strategy and future, and even its customers, suppliers and partners. It’s important to consider every decision from every angle and ask every single question that pops into your mind as you talk with vendors. Once you decide on your vendor and system, this thing is likely going to be there for a long time.
In the end, you can be the hero or the goat when the new ERP system is deployed and running for your company.
Which would you rather put on your IT resume for the future?