You naturally want to minimize risks and avoid cost overruns before signing a long-term contract for a new ERP system. Your prospective vendor also wants to minimize risk, but is usually not in a position to do anything other than give an implementation estimate based on lots of assumptions about scope, roles and responsibilities. These assumptions could be fairly accurate, but could also be way off, which could lead to surprises and costly change orders during the implementation. Neither you nor the vendor want this to happen. Wrong assumptions that lead to change orders will create frustration, friction and could […]
Statement of Work (SOW) Stoppers
The SOW is a key document from your vendor that can make or break the implementation. The vendors will do their best to reduce their risk by limiting scope to a high level list, assuming that you will follow best practices, and making a lot of other assumptions about you doing work that you don’t know or understand the effort to complete. As the vendor risks go down, the customer risks go up. We recommend the following: Scope is tied to the requirements in the RFP which need to be specific Best practices should only be applied to processes that […]
Should you restrict ERP selection to just the major vendors?
We don’t think so. There are many excellent products built by small companies for specific industries that are worthy of consideration. But there are risks that the vendor will not be around for the long haul. There are a number of ways to evaluate long-term viability: The system is built with old technology that is getting really difficult to support by the boomers ripe for retirement. There is a lack of investment in the system. Ask to see the product roadmap and recent enhancements. The company is not profitable. Private companies will be reluctant to release this but it can […]
How to get an accurate estimate of ERP implementations costs
We ask the finalists in our ERP software selection projects for a detailed breakdown of implementation costs by module (g/l, a/r, a/p, purchasing…) and by task (customization, integration, conversion, project management, design…). We provide them with a lot of information to make the estimate possible: Detailed requirements Business process review which includes process, problems, type of problem, and impact of problem High level process maps Access to our client to get the tour and ask whatever questions are needed The finalists are asked to demonstrate a prototype of the to-be business process allowing them to validate assumptions. But sometimes, even with […]
ERP Cost Estimates
Buyer beware when estimating the costs of an ERP implementation. There are so many unknowns that make it really tough to avoid unpleasant surprises. The vendors are very reluctant to fix price anything when it comes to the services required because of the many unknowns – scope of work, who does what, capabilities and available time of buyer resources…. It’s especially difficult for the vendors in the early stages of the selection process. At the same time, the buyers want to have a decent ball park of costs before pursuing a potential solution. But there are guidelines that will help. […]
Would you select an ERP (or any) system from a small vendor?
We include small vendors in our system selection projects but only when we believe that they have a good client base, are really good for a specific industry and are using recent technology. A small company can also be a successful company and there are benefits to being a bigger fish in a smaller pond. You will see lots of small/unknown companies on our ERP portal at https://www.180systems.com/services/erp-business-case/. But what about the concern that a small vendor will be acquired or if the small vendor is facing financial difficulties? Financial problems may be temporary – for example the vendor might have just […]
Murphy’s Law
Murphy’s Law is alive and well thanks to ERP implementations. The problems that often arise can be avoided and/or the impact reduced by good planning in advance and strong project management. Here are a few ways to fight Murphy: Ensure you have the right people (your A team) on the project and enough of their time is allocated to the project. Some key operational team members will need to be backfilled on their day jobs. Talk to people who have gone through an implementation to get a sense of the time needed. Ensure the implementation plan proposed by the vendor is adequate. […]
ERP: Lessons From the Field
March 27, 2015 from CFO – “Senior finance executives share their advice on selecting and implementing enterprise resource planning systems.” Read more 180 View – CFO asked the executives a number of questions including about value, total cost of ownership, flexibility, how to evaluate ERP vendors and implementation advice. One piece of advice was “Invest your best people in the process.” […]
ERP Support Requirements Range Widely
March 2014 from computer economics – “…Our study, ERP Support Staffing Ratios, shows the typical range of ERP support staffing ratios for installations of all sizes. At the median, there are 58 users per ERP support staff member, rising to 131 users per ERP staff member at the 75th percentile. At the 25th percentile, each ERP staff member supports just 29 users…” Read more 180 View – A key question in the selection process should be the effort required to internally support the system. It is really hard to get this information from the vendors and references should be asked […]
Lesson Learned
Our software selection process includes scripted demonstrations. The first demonstration is based on requirements, takes on average of 3 hours and is used as a way to select two final vendors for a more detailed demonstration based on business processes. The script can be challenging and some vendors would rather perform their usual demonstration sometimes called a dog and pony show. These vendors typically suffer the consequences as our clients will judge them harshly for not following the script. But we did recently experience a case where the vendor did not follow the script very well and our client did […]