Planning Evaluation and Selection of ERP systems:
successful ERP project requires selecting an ERP solution, implement the
solution, manage changes and examine the practicality of the system, Wei and
Wang, (2004). Wrong ERP solution choice would either fail the implementation or
weaken the system to a greater impact on the enterprise, Hicks, (1995); Wilson,
enterprises often jump into looking at ERP functions and features rather than
examining the strategy and business processes. It is important for management
to know the current strategy, processes and supporting systems compared to what
they could be with the new systems, Donovan, (2001).
enterprises, the decision to implement ERP functionalities will require buying
a software package from one of the more popular vendors on ERP market like SAP
and Oracle. But the selection process is not a straightforward task, hence
thorough understanding of what ERP packages are to offer, differences in each
of them and what might be at stake in selecting one package over the other
should be well examined.
and selecting an ERP system can be a very complex process on the other hand,
but it should be a 'fact-based' process that will bring the enterprise to the
point where comfortable & well-informed decisions can be made.
a research carried out by Management Agility Inc, (2005), revealed that it is
imperative to adopt a thorough evaluation and evaluation process before
adopting any ERP solution in SMEs.
Software & Hardware (Solution) Evaluation and Selection Steps
Round for Product
business case/need and spell-out required values. Be specific. Ensure the
business sponsor is willing to push through business case for change.
round the market for what product is available. Identify vendors that operates
and their general approaches to technologies the take. Discuss with others in
the same industry as you are etc.
your requirements and be sure of what you are looking for in line with you
business case. Refine requirements if possible and be specific too.
what product is looking promising in line with the business need and from which
vendor. Identify which vendor and their products and invite interesting ones
for demo etc. Request for proposal (RFP).
each shortlisted vendor over for a chat and find out more about the product.
List out expectations based heavily on business requirements.
point evaluate this approach. Can you afford to change your current process?
Can you afford the change the new product will bring and many more?
Negotiation for the selected product with the selected vendor. Agree on who
does what, when are they to be done. Negotiate deliverables, timelines, cost
& payments schedules and terms, support inclusive.
all legal terms, finalise the contract and select product for onward
of business requirement to what the software/hardware can provide. This is the
core of the whole exercise else stop the evaluation.
the product capabilities in line with the business requirement. Evaluate the
impact of this product on the business requirement.
Detailed flowchart for ERP Software, Hardware Evaluation and Selection
Processes Analyse Gaps
effective ERP Solution evaluation and selection process, the above steps are
categorised into 5 phases as explained below;
Stage 1 - Plan Requirement
need is defined, along with areas in business that required technical approach.
Develop a specific business case with business value for a solution.
that the project sponsor is willing to articulate the business case for change.
Indentify vendors that operate in the line of products you are looking for.
familiar with the software and hardware infrastructure presence for the
general view of investment needed, considering software, hardware, other
related infrastructure and ongoing support.
the survey, evaluate the organisation readiness for the investment and decide
whether to continue or not.
define priorities under "must-have" and "nice-to-have"
Stage 2 - Request for Proposals (RFP)
interesting vendor based on the outcome of market survey for products. Invite
interesting vendors for interaction/demonstration of their products.
facts/functionalities in line with the business need from various products
demonstrations for the developments of unbiased RFP for vendors.
neutral body to develop RFP using all facts gathered during products
demonstration aligned to the business requirements.
out RFP that addresses the vendor as a company and the products they offer.
basic expectations from an ideal proposal in line with the business need for
onward selection of the ideal software vendor.
Stage 3 - Solution Evaluation
and prioritise remaining gaps between software capabilities as demonstrated and
business requirements. Sample form in fig. 3; below.
how the gaps will be bridge in terms of configuration, configuration, process
change or combination of all these.
gaps can be bridge consider reengineering of those affected business processes
affected and continue with the evaluation.
Stage 4 - Contract Negotiation
with each vendor.
software, hardware and other infrastructure agreement requirements, which
include version, components, maintenance and support. Also negotiate
participation in user groups, license costs, maintenance fees and many others.
service provider agreement which also include deliverables, timelines,
resources, costs and payment schedules.
other legal requirements.
Stage 5 - Selection and Agreement
successful negotiation with the right vendor;
all legal terms on privacy protection, operation guidance and data manipulation
agreements with the selected vendors.