As has been mentioned in our previous blogs, implementation of ERP is a major change in the way business is done. There are more failures than success stories of ERP implementation especially for first time implementers and Small and Medium Enterprises (SMEs). We have summarized how to assess readiness of organization and some of the challenges in our earlier blogs (https://mentorsunlocked.com/is-your-company-ready-to-implement-an-erp/), ( https://mentorsunlocked.com/minimize-your-risk-of-erp-failure/), (https://mentorsunlocked.com/change-management-integral-part-of-erp-implementation/).
Do not under-estimate power of a good ERP. ERP is not a short-term intervention but a major change. It should not be treated like data entry and MIS software but a software that digitizes workflows and hence changes the way a company operates. It affects the culture, working environment besides improving efficiency and control in the business. That is the reason, it is important to choose an ERP partner after due diligence. But there are pre-requisites, the organization should undertake before it starts its search for a partner. In this short article, we would like list 10 key points to carefully consider before starting the search and during the evaluations of the partner.
1. Prepare a budget for Implementation of ERP which includes all costs, such as license costs, ERP Implementer’s fees, hardware costs, employee training costs and data migration costs etc. Keep at least 10% effort buffer for customization / functionalities.
2. Evaluate the work processes that have to be implemented in ERP. This has a direct implication on number of licenses that you may be considering for procurement.
3. Create a broad but well-defined RFQ with expectations of functionalities, software and hardware integrations, assess number of users or license requirements, and business outcomes. Every business (even small ones) has some unique functionalities and processes which have deviations from standard business practices but works for them. Don’t underestimate or tone-down your business complexities. Technically comparable proposals responding to similar scope, eases comparison of quotes and shortens evaluation period.
4. Insist on a detailed proposal mentioning all the modules and functionalities which will be implemented.
5. Insist on references to previous successful implementations and demo on a live instance.
6. Check Profile and experience of project manager / functional consultant(s) who will be in charge of your project. Do insist on an interview / interaction with person. If suitable, in terms of experience and skills, insist on his being named in the proposal and final agreement itself.
7. Keep at least 10% effort buffer for customization / functionalities enhancement.
8. Have a well-defined post-Go-Live support mechanism and time-frame in the proposal and final agreement.
9. Factor-in time and effort to be expended by your own team leads / heads. Their involvement and inputs are key to successful implementation of ERP.
10. Factor-in training of at least key members ( Trainers within the company) both in internal plan as well as in contract with implementation partner.
ERP implementation is a high impact and high value investment for your organization. It needs that much due consideration and diligence so that you get the right product and efficient and effective implementation partner. Do not fall into the trap of going for L1 bid. It will be money down the drain. If you find it difficult on your own (with your team) to navigate through this process, you may like to engage external consultants to help you with the process (https://mentorsunlocked.com/declutter-erp-decision-hire-a-consultant/).
All the Best on your new journey.