Choosing an ERP system is a strategic decision that has a profound impact on a company’s business operations and organizational structure. The ERP selection process must be approached with clear criteria, as it involves a significant investment in licenses, consulting, infrastructure, and support, as well as a major internal effort during implementation. As executives become more familiar with the term “ERP,” it is crucial to understand its functionality and scope.
When searching for an ERP system, having the guidance of an expert is essential.Juanma Chueca, a partner at PKF Attest Tecnología,shares his valuable recommendations based on more than 25 years of experience in ERP selection processes. Here are his tips for ensuring a strategic and successful choice.
Juanma Chueca
Key Considerations in the ERP Selection Process
Align the ERP system with the company's long-term strategy
When a company decides to select a new ERP, it is important to ask itself questions such as: are we going to internationalize, are we planning to expand to other activities, is there a growth plan in place, etc. The strategy will condition the possible solutions, it is not the same to be a national company than an international one, to grow 1% than 30%, the market options will be transformed according to the strategic vision and the future.
Identify the factors driving the selection of a new ERP system
Identifying the reasons for change is crucial. The most common include internal management dysfunctions, repetitive processes and unsupported or outdated systems that have become too small.
Form an internal team for the ERP selection process
It is essential to involve senior management as well as department heads, whose expertise adds significant value to the process and will be crucial to its implementation. Making arbitrary decisions without consulting the management team leads to overlooking important details and forces the management team to push the initiative forward.
Define a list of functional requirements for the ERP system
Perhaps the most important! The company must compile the needs to be met with the new ERP, classifying them by criticality and importance. It is required to describe as best as possible the process and the need for automation that I am going to ask the software. If there are no resources to do this exercise, an experienced consultant as PKF Attest helps to elaborate this list, reduce risks in the decision, clarify the needs of the project and be part of the scope of the ERP project.
Evaluate ERP solutions tailored to the company
ERP options should be considered in response to aspects such as: company size, functional capabilities covered by the ERP, software evolution and continuity, industry experience, service partners, availability of Cloud or on-premise software or both, software technology, integration capabilities with other systems, software customization possibilities, national and international scope, BI capabilities, etc.
Choosing the Right Consulting Firm to Implement an ERP System
The choice of the consulting firm that will implement the software is often more important than the ERP technology. My advice is to avoid vendors that implement directly and opt for those with an ecosystem of partners.
Any ERP you select must have an ecosystem of partners or formed partners that provide services, such as Microsoft, Salesforce, Sage, etc. Evaluating the consulting firm in terms of turnover, employees, financial health, success stories and integration capabilities is essential.
Paying close attention to the pre-sales process when selecting an ERP system
I recommend that in the selection process you focus on solutions and consulting firms whose selection team is available, attends the process, is proactive and gives continuous feedback.
From my point of view it is important to focus first on the ERP technology, the check-list and then see the demonstrations of the solution. I advise that these presentations are always preceded by meetings where the needs of the company are informed so that an agenda is well focused. Once the ERP platforms are selected, the technological partner that will accompany me in the project is chosen. It will be important to understand our needs and aspects such as approach, scope, methodology and project team, deployment model. If we have to make an exercise of homologation and uniformity of proposals, the idea is to have a standardized scope where we analyze: dedication, team, calendar, guarantees, support, etc.
Closing the contract
It is important to close an agreement with the maximum guarantees that the scope of the project and the economic closure of the investment are fulfilled. I have experienced processes in which the contract had many specifications and abusive clauses that have been detrimental to the implementation. In this case, the subsequent project becomes a control of the contract rather than a common project for two companies. If you are not sure it is better not to close a bad agreement, this type of alliances have a duration of more than one year and you will always go through complicated moments, an ERP is certainly one of the most complex projects to carry out.
Conclusions
Choosing an ERP system is a strategic decision, and making the wrong choice can have a major impact on the company. It is crucial to devote time and resources to this process.
Looking ahead and ensuring that the ERP system supports the long-term strategy is vital.
It is essential to invest in a detailed list of functional requirements and to be specific about the needs of the new system.
Select the right team, avoid assembly-line models, and surround yourself with talented staff.
I will thoroughly evaluate the ERP platform and the consulting firm that will assist me.
If you limit the process to just a few ERP vendors and consulting firms, it could drag on indefinitely.
I highly recommend that consulting be your top priority when it comes to reducing future risks and costs.
Having expert guidance during the ERP selection process helps reduce risks and make decisions that align with the company's strategy.
