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10 Tips for Avoiding and Recognizing Red Flags During Your ERP Search – Part I

01/03/2016

An increasing number of companies are turning to an Enterprise Resource Planning (ERP) solution for the functionalities it delivers to streamline processes, improve productivity, create greater efficiency, and increase profitability. There are well over 1,500 systems on the market today, which is a good thing if you’re in the market for ERP software; you have plenty of choice. However, choosing the RIGHT solution for your company is the real challenge. In Part I of this blog series, we provide five suggestions to help you initiate your search, plus some “red flags” to watch out for.

  1. Determine your ERP software personality.

    The field of ERP solutions is as diverse as the manufacturing industry itself, serving sectors such as apparel, beverage, chemical, electronics, food, paper, petroleum, pharmaceutical, transportation, and wood products manufacturing and everything in between. Process manufacturers make goods from ingredients and raw materials, while discrete manufacturers assemble and create products from parts and components. It’s important to discover whether the ERP software solution supports manufacturing, first, and second, whether it supports your manufacturing type––discrete or process manufacturing. Finally, identify if it specializes in your industry.

    RED FLAG: Be skeptical of the ERP vendor who handles it all.

  2. Rank your rudimentary needs.

    Do you need industry specific software or is a more generic, out-of-the-box ERP solution adequate for you? Open-module architecture will provide core functionalities such as accounting (AP/AR, general ledger), order entry, purchase orders, inventory control, scheduling, material requirements planning (MRP), and quality control (QC). Depending upon the nature and complexity of your operation, add-on functionalities may be important options as well: Customer Relationship Management (CRM), human resources (HR), payroll, research and development (R&D), electronic data interchange (EDI), Automated Warehouse Solution (AWS), and more. Create a list of your most basic needs, first, and second, visualize your “wish list” functionalities. Finally, determine those needs that MUST be customized to your operation.

    RED FLAG: Beware of the ERP vendor with poor listening skills who dictates what your needs are.

  3. Speak to the Top.

    Ten critical needs of your company. Prior to your search for an ERP solution, review your company’s top needs for the software, and ensure upper management agrees with the listing. These specifications will be used in the company’s request for proposal (RFP) and in upcoming discussions with ERP vendors in an effort to find your ERP provider-partner.

    RED FLAG: Members of top management, along with other stakeholders, do not completely agree on the Top-Ten list of your critical needs.

  4. Set up an ERP Project Team.

    The function of an ERP project team is to organize and spearhead the company’s investment in, and implementation of, the ERP software solution. The structure and accountability procedures set up by this team will ensure this important, complex undertaking will proceed in an organized manner to a positive conclusion. This team should be comprised of no more than 10 members who represent top management, finance, IT, and key ERP software users, as well as an ERP Project Manager.

    RED FLAG: No accommodations are made for the additional time requirements and expanded responsibilities demanded by membership on the team. This may indicate a lack of commitment to the project.

  5. Prepare an RFP.

    The RFP is a document used to help your company find its ERP vendor of choice. Therefore, it is a communication tool that articulates your critical business and technology requirements to the prospective provider-partner (vendor), as well as shares insights about your company’s culture and decision-making process. Information for the RFP is gathered from the front-line users of the ERP software, to department heads and mid-managers, to upper management––all stakeholders. Your RFP should be personalized to your company and its specific needs––critical, nice-to-haves, and wish-list items.

    RED FLAG: Many templates include general items that are not applicable to your unique situation. They waste your preparation time, pad your RFP with unnecessary words, and ultimately, confuse the true nature of your request with the ERP vendor. Take only what is necessary from a template.

ProcessPro has completed many ERP implementations over the past 30 years, offering our high level of software, service, and support to food, beverage, chemical, cosmetic, pharmaceutical, and nutraceutical industries. We closely “partner” with clients to ensure there are no-surprises with their ERP software or its implementation. We also believe there should be no surprises when it comes to your choice of an ERP software provider-partner. Read next week’s installment of our blog to discover the other five suggestions for improving your search for an ERP solution.

Tags: ERP Software Selection