How to Choose an ERP Vendor

The choice of vendor for your ERP project vendor for your ERP software is critically important to the success of your project. A good fit for your industry and business ensures a relatively smooth transition from old to new. Solutions that are efficient and intuitive speed up the learning process, foster the sense of ERP being an improvement, and contribute to organizational confidence.

When you are creating your ERP vendor shortlist you should evaluate your ERP software vendors along dual pathways. The first is the more obvious one; is their ERP product the right fit for your industry and business model? The second is less tangible, and therefore more difficult to evaluate: is the vendor’s culture the right fit for your culture?

Determining the fit of the software product for your business is the more important decision, but should also be the most objective. Unless you are hoping to secure some sort of strategic advantage with an unusual ERP solution, “tried-and-true” should be your rule. Your ERP vendor should be able to put users in front of you from your industry who make you feel positive about the strengths of the product. If you cannot find exact industry overlap, then find process similarity, but in any case, talk to people who have used that particular ERP product over time. Construct a basic numerical scorecard around the critical features/deliverables you need, and use it –and trust it - when comparing products. Be careful when someone with no particular track record in your industry tries to buy market entry with a noticeably low asking price, and remember that there is no amount of money in your company sufficient to fix a bad ERP solution. Pick a vendor who you judge will be around for a while, and supports on-going development for your product.

Trust your Antennae

Evaluating vendor culture is trickier. Bear in mind that there are going to be two very distinct phases to your relationship with your ERP software vendor. During the sales cycle, you will be the most important person in the world. There will be no request too large, and no question too small that does not elicit an almost obsequious response. After the sale, though, the actual business relationship begins, and that is the relationship that you must do your best to gauge. You should feel positive about your vendors; that they are ethical, honest, and would never intentionally mislead you. You should feel like they consider your well-being important, and that you will be able to work together through unexpected problems. Don’t over think this one, and trust your instincts. If it looks like a duck and quacks like a duck, it’s probably a duck.

Selecting an ERP vendor is a big, strategically important decision. Involve as many peers and viewpoints as you can possibly manage. Feel good about being able to articulate the reasoning for your choice, numerically if possible. Don’t expose yourself to risks without commensurate rewards. Choosing the right software vendor is a huge step toward to ERP success.

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Phil Marshall

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Phil Marshall

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