Once you have identified your list of vendors you need to lay out your plan for evaluating ERP vendors via an ERP comparison process.
Earlier this year, I published two different blogs: one on examining current processes, and one on defining the future state. If you follow this approach, you will have developed enough information to define your critical requirements.
For our clients, we recommend using critical requirements to evaluate your list of vendors. A critical requirement is a system feature that must be in the new system, it is one of the reasons you are considering the new system, and it is a feature that when implemented will significantly improve the business.
In our visioning process, we work with the business team to identify these critical requirements. Examples of critical requirements are for a complex manufacturing company are:
- CRM – both sales and service
- Estimating and quoting
- Demand planning ( for make to stock companies)
- Product configurator
- Advanced planning and scheduling
- Lean manufacturing features (Kanban, flow)
- Multi plant
In addition to the above, when our clients are evaluating ERP vendors we want to review ease of use, and access to information (user generated reports and queries + dashboards and scorecards).
Each of the critical requirements should be defined in a one to two page document. The requirement should be written as a process script explaining how it will be used in the in the new system.
The critical requirements should be copied into a Request for Information (RFI) document that will be sent to the vendors on your list. The RFI will request the following information:
- A demonstration of how the vendor’s software addresses the critical requirements
- Information about the company and the technology
- A preliminary price quotation for the software. In the RFI we recommend you identify the application modules required and the number of users so the vendor knows how to develop a quotation.
The software vendors are asked to visit the company and present their software and answers to the RFI document. We recommend a vendor spend a full day at the company to make their presentation. Assuming you have 8 to 10 critical requirements the demonstration alone will consume 5 to 6 hours with each requirement taking about 30 minutes to demonstrate.
Prior to the demonstration, some vendors will ask for a discovery session. This session allows the vendor to review the critical requirements with the business users to be sure they understand the need so they can correctly setup their system for a demonstration.
The business team responsible for the selection of the system should attend the demonstration. The audience should be limited to this group. If you expand the meeting to include many users, you will dilute the focus of the presentation.
At the end of each vendor’s day, after the vendor has left, the team should meet to discuss their observations and record their evaluation of that vendor.
After all the vendors have completed their presentations, the team should meet to review their thoughts on all the vendors. A decision criteria table should be built which allows the team to compare the vendors on each point. At the meeting the team should rank the vendors and decide on which vendors will be cut and which need further evaluation. At this point most companies will pare their list to the two finalists.
In my next blog, I will discuss the steps the team should take to do further investigation and due diligence on the two finalists.