Lean & Operational Excellence and Independent ERP Consultants

One of the critical success factors in ERP system selection is the insistence of the organisation on a focused demonstration of the ERP system prior to the evaluation of a preferred vendor.   System selection methodologies will always set time aside for requirements elicitation and preparation of an Invitation to Tender (ITT). However, it is now also considered best practice in ERP system evaluation to ensure that potential users see a demonstration of the vendor’s package.   A demonstration of an ERP must be relevant to the business. For example, there is little value in demonstrating a discrete manufacturing ERP System to an organisation that manufactures product from ingredients that may vary slightly on a daily basis and may result in by-products and co-products. In such a situation there is a requirement for an ERP system that is designed for the chemical or food processing industry.   Focused demonstrations must also be of sufficient detail to allow a company to seriously compare ERP systems. Some vendor led demonstrations tend towards very simplistic situations. A typical vendor demonstration will show an idealistic order to cash process where a customer orders, at a fixed price, a quantity of finished goods that are fully in stock. The reality in business is that there are many customers with varying and more complicated commercial arrangements (such as BOGOF, LTAs and complex price tables) and these scenarios need to be seen in a demonstration. Potential users should also be interested in seeing how the system might handle scenarios such as stock-outs and incomplete payments.   On the other hand, there is a delicate balance between asking for detailed test scenarios and inadvertently forcing vendors to opt out of the selection process due to the extent of preparation required. However, BSM have found that some businesses have not had the internal expertise to identify the type and depth of scenarios that must be demonstrated. In such a situation, it would have been advisable for these organisations to seek external and objective assistance of independent ERP consultants.   A typical ERP system should underpin the operations of an organisation for a period of at least ten years. People who do not request focused demonstrations in their ERP vendor evaluation process are in grave danger of selecting the wrong system and are effectively putting the future viability of their organisation at risk.

This Opinion was written by Martin Commins, Senior IS Consultant at BSM. If you would like further information on ERP System Selection please send an e-mail to Martin Commins.