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ERP Software Selection Guide

ERP or MRP II computer software has become extremely complex both in terms of functionality and visual presentation. The normal good purchasing practice of writing a detailed requirements specification or ITT (invitation to tender or sometimes called Request For Proposal) is not therefore practical. In any case the two biggest problems with packages are software problems or "bugs" and poor support from the software house. These problems cannot be avoided by writing a long and complicated specification which creates an illusion of security but in practice may do little except put off some otherwise good software suppliers.

Jargon Warning - If you are not familiar with any of the terms used, you can look them up in the Jargon Buster or in the book Business Excellence which is available in paperback or you can download this year's updated edition as an e-book.

It is tempting to hire an ERP software selection consultant to do your selection but is seldom worthwhile. First you have almost as big a job finding the right software selection consultant as finding the right ERP software. There are then 4 further problems:

  1. There are two vital elements to the software selection process, a knowledge of your business and a knowledge of ERP software. By the time you have explained your business in enough detail to the selection consultant you could have gained almost as extensive a knowledge of the ERP software market as they have.
  2. It is inconceivable that a software selection consultant would not have a bias towards software they are familiar with. It is often hard to know whether consultants have links with packages unless you talk to a lot of their previous clients and spot a bias.
  3. Specialist computer software selection consultants do not come cheap and tend to suggest "safe" top of the range packages (often called Tier 1 see ERP software tier guide) to cover everyone's wish list whilst a Tier 2 or 3 package would be less expensive, simpler to use and yet have all the functionality required.
  4. It is at best a strange start to the vital relationship with the software company to be working through a third party and at worst may even be detrimental.

If you do decide to use software selection consultants they should only help and guide you. The decision on which software to use must be made by the senior management team. The consultant should prepare two or three options from which the company can choose their preferred package.

For similar reasons to the above, a company must try not to get hung up on one of the detailed software checklists which draws attention away from the fundamental requirements. Many are biased or selective and do not ask "why" or warn you when a obscure or unnecessary functionality is selected.

You have therefore to take responsibility for ERP software selection yourself. I have put together the best advice available from my own experience and that of many seasoned ERP experts. In summary, the stages in selecting an ERP system are as follows:

  1. Set up a software selection task force of senior line managers headed up by the IT manager.
  2. Arrange basic education for the task force in the functionality of ERP systems and the best way to integrate them into business, we call this Business Excellence, either through external education consultants or using "internal experts" supported by good reference material such as our ERP Class A Implementation toolkit which is specifically designed for this purpose
  3. Draw up a list of up to 10 suitable packages for the "beauty parade" and arrange demonstrations.
  4. Check all sources for the background and viability of the packages.
  5. Reduce the packages to a short list of no more than 4 packages.
  6. Prepare questions prior to visits to suitable reference sites of the short list packages.
  7. Prepare demonstration script and invite the last two or three packages to demonstrate their package against this script.
  8. Make final selection.

Just implementing a planning system is, however, not enough. You need to change your planning methods to take advantage of the integrated way of working. For this reason I have included the detailed Software Selection Guide in the inexpensive and easy to use ERP Class "A" implementation toolkit. For more details of the toolkit and how to purchase and download it click here.