How to Decide Between Two ERP System Finalists
By Harry Landsburg, Director, Business Process Technology Consulting
Once your ERP software selection team has finished reviewing two finalist ERP systems, it’s time to make the final decision. Your team has created a thorough RFQ for the needs of the company and the remaining vendors have “survived” multiple rounds of demonstrations to provide the team with the best possible look at how the proposed software will work. Now it’s time for the final due diligence activities to help you decide which solution will win.
Here is what needs to happen:
- Get a final proposal from each vendor. Make sure the software modules are what you will need today and in the future. Make sure the number of users is correct (on-premise concurrent users or named SaaS users). Compare the two proposals for “apples to apples” structure and functionality. Question any differences to make sure you are looking at two well-structured solutions.
- Check references of companies currently using the system. Some question why this is necessary, as your team will be provided with only “good references;” The reason is to talk to effective users of the proposed solution (who work in an industry and whose scope of operations are similar to yours) and find out how they got there, how the vendor worked with them to achieve success, and how both the reference and the vendor overcame challenges during the implementation process.
- Visit a user site (optional). This visit only has incremental value if there is strong interaction between your team and the host. A quick plant tour and a conference room Q&A is the minimum acceptable interaction. One-to-one sessions with multiple staff members is more effective in learning how well the proposed solution is supporting the host business.
- Speak to the proposed project manager and technical staff. Think about how they impressed you. At this point the decision is not about sales representations but how the preferred system will get implemented.
- Make the final comparison. Re-read the original RFQ. Does the software cover everything you wanted from the beginning? How has the internal staff reacted during demonstrations? Is there a preferred solution among the two vendors even before price negotiations?
- Enter into contract financial negotiations with each vendor. A vendor will typically not walk away from an opportunity over price, but there is a price point where the opportunity will be passed over by a vendor.
Ultimately, the financial decision is more about value than price, but to reach that point you need to be confident that the best possible price has been proposed. Once you have signed the contract, the easy part is now done and the challenges of implementation is about to begin.
Harry Landsburg, DVIRC’s Director of Business Process Technology Consulting, has worked with over 400 companies to document how their business processes can best be supported by upgraded or new software. His approach to relating the way his clients operate to the technology marketplace results in a better selection and implementation outcome.
DVIRC can help with our solution-agnostic expertise of the ERP marketplace and experience with hundreds of companies improve how they do business. If you would like a complimentary consultation to discuss your business needs and address how better processes and software can support your growth, contact us here.