ERP Buyers Guide

ERP systems primarily differ based on Price, Scalability, technical and functional capabilities

ERP software, like most other products, is built with a target business in mind. (Size of business, business profile, industry type...)

The industry offers up several definitions of the ERP software market predominately segmented on company size (Revenue) and employee numbers. The tiers, starting at the bottom, (Tier 4) are for start-ups and small businesses, Tier 3 SMBs small to medium sized businesses roughly in the $5 M - $50 M turnover range; Tier 2 SMEs small to medium sized enterprises $50 M - $1.5 B and then Tier 1 global enterprises at the top of the industry pyramid. The revenue ranges should be used as guidelines only.

Some buyers will sit on the boarder between ERP tiers making their ERP selection decision more difficult, others will be clear cut often due to affordability as the overall required investment at each tier does differ.

Entry Level Software

Most entry level accounting systems are technically limited from scaling past a small number of system users and they may also have database volume limitations. User interfaces don't support viewing and searching large volumes of transactions & records Further to this, entry level systems offer a fixed / rigid system designed for small businesses who may not have a qualified accountant or bookeeper on staff. The systems are easy to use but inflexible.

SMBs & SMEs

As we progress up the tiers the ERP software becomes more flexible and capable of meeting a wider range of business processes. They typically cover more business scenarios than the previous tier of software and often support on platform customizations. Some SME systems natively cater for enterprises operating in multiple jurisdictions with multi legal entities.

Whilst it's true that some ERP systems can be tailored to fit into a tier, they weren't necessarily designed to cater for we have seen this back-fire. Implementation firms generally are not versed in working in a tier below or above their normal software segment

Most ERP software can't move up to a tier above their designed tier but that does not stop some vendors from trying. If product limitations don't get you the lack of implementation experience to service a larger sized business will.

There are several supplier behaviours to be aware of that if ignored can cost you dearly.

• Investment low balling to win your business
  • Too few licenses, the wrong license mix, insufficient project budget, under resourced infrastructure and an unrealistic
    project timeline equals a bigger, unexpected investment. Exiting a project mid project isn't typically possible or affordable for a buyer so a clear understanding of what you are getting for your money is essential..
• Unrealistic Project Assignments
  • We call this the art of allocating project tasks to clients knowing full well they are highly unlikely to be able to complete the tasks.
• Fixed Fee Project Investment offer
  • My favourite, a fixed fee that isn't tied to outcomes. What's covered isn't ever defined fully leading to dispute.
  • You pay extra when the time runs out,
  • They haven’t accounted for all the project elements so you’ll pay extra for inevitable project changes
• Over simplification
  • Everything is easy. Our system is magically far easier to configure and deliver than all the other products in the same market segment and therefor faster and less expensive & it covers all the complex scenarios in your business.
  • Our system is a breeze to learn
  • Our templated company for your industry speeds up project delivery but we reduce the value the system would otherwise deliver as a tailored solution reducing your ROI.
• Cutting corners
  • No or little documentation especially concerning technical developments and integrations.
    • No test environment
    • Minimal Project Management
    • No change Management
    • No Steering Committee
    • Unlicensed software
• Deliberate contractual ambiguity

Project killers and causes can concurrently reside with supplier and buyer.

Buyers

• Ignoring the need for change management
• Not completing assigned tasks on time leading to cascading delays, rework and extra costs
• Jeopardizing a business-as-usual state by under resourcing the project
• Appointing a project manager who doesn't possess the authority to direct staff
• Setting an unrealistic timeline to go live.
• Under-estimating the time required for staff to absorb new business processes, new software and new responsibilities.
• Taking on project tasks to cut costs but not being in a position to deliver on the assigned project tasks.
• Requiring rework where the original specification of SOW wasn't fully considered by the buyer when the opportunity originally existed
• Choosing the wrong software and or the wrong implementation partner in the first instance
• Supplying inaccurate data (Garbage in Garbage out)

Implementation Suppliers

• Over promising & under delivering
• Not setting up a Steering committee
• Taking project shortcuts (documentation, SOW, RICEFW, RACI...)
• No or insufficient supplier-side project management
• Insufficient explanation concerning the suppliers approach to delivering a project, at the start of the project
• Informing clients after the fact rather than providing timely advice or requesting a project change
• Not implementing a change management process

Project timelines and resourcing

Tier 2 & 3 ERP projects contain a myriad of tasks, many with dependencies, which together help determine how much time is required to deliver an ERP project and the timeline for doing so. Project tasks are split between supplier and buyer with each party’s resource demand differing throughout the project.

The typical buyer resource allocation consists of a project manager and team and subject matter experts who will be called upon for specific inputs typically during the project requirements gathering phase and the solution design phase.

Of course, a business should never jeopardize their business-as-usual state due to competing project attentions. Unless extra staff are brought in or reassigned, existing staff working in the project need adequate time to complete their project tasks and their day-to-day responsibilities, and this should be reflected in the project plan.

Delays in a buyer’s completion of assigned tasks can hold up a project and lead to a need to push out the cutover date. Matters such as annual leave, competing priorities, scope creep and resignations can impact the project timeline and go live target date.

Rushing or squeezing the project into a crammed timeline won’t necessarily reduce the investment fee but it is likely to jeopardize the outcome.

Mature businesses demand advanced ERP system solutions some of which are difficult to price to the cent. Certain project tasks are most adequately dealt with by the supplier offering a from and to range. Close project management will quickly establish the adequacy of the estimate and will afford both parties to review the previously agreed approach & solution.

• Communicate with project team members and all other stakeholders regularly
• Co-ordinate the involvement of 3rd party suppliers to the project.
• Be flexible around changing conditions
• Appoint a project sponsor and meet with them as and when required.
• Budget for Steering Committee meetings
• Anticipate passive and active pushback from some staff and plan accordingly (Change management)
• Adopt the train the trainer approach as it produces the best project outcomes.
• Ensure system users receive the appropriate level of training that will make them most effective
• Staff with little or no report writing and Bi experience aren’t likely to successfully learn a new application(s) and then create custom reports and dashboards in the timeframe usually available in an ERP project. Budget accordingly
• Allow ample time for User Acceptance Testing (UAT). A comprehensive UAT is paramount to a successful go live position.
• Empower your staff to make a positive contribution to the project.
• Capitalize on staff skills relating to project tasks
• Don’t take on tasks best delivered by suppliers
• Allocate time to communicate with stakeholders
• Be cognoscente of competing staff demands & staff availability when planning
• Don’t leave it up to the supplier. ERP projects are a shared experience

CitySoft’s starting point is that every business has their own unique set of investment objectives and reasons behind investing in a new advanced business software system (ERP) and ultimately every business wants to experience demonstratable and measurable business benefits from their investment in software & our professional services.

CitySoft’s value proposition to companies who choose one of the ERP products CitySoft specialize in are

• More extensive use of the chosen business systems capabilities leading to companies getting far greater value from their software investment.
• Smarter configuration of a products options to better serve the interests of the business. Our business analysts and product experts combine to satisfy both business and operational demands of the business and not one at the expense of the other.
• The presentation of alternative ways of doing things and improved business processes utilizing system capabilities that may not have been available in the system that is being replaced. We challenge the way a business has operated in the past, often due to limitations present in the business software being replaced and provide avenues to embrace and benefit from a digital transformation.
• A less confrontational change management process that yields greater staff engagement. Our empathy for staff impacted by the business changes and our ability to support managements business decisions results in high levels of system adoption.

Our experience and our approach produce the fastest route for you to start benefiting from your new ERP system 

• Shortlisting more than three products. Seeing too many products amplifies the complexity of selecting one product.
• As a guide, identify your must have vendor attributes; product features and product technologies (Deployment), and licensing model.
• Be aware  that just because a feature is on a vendors roadmap doesn't gaurantee it will ever be incorporated into the standard product or offered as an option.
• Consider the risks with a direct vendor relationship
• Understand who owns your data and how you can retrieve it 
• Share your key presentation requirements in advance of each presentation can help presenters focus on the things that matter to you
• Try and avoid the never ending presentation. The products these days are all merchanable quality so it becomes a case of look and feel and each products ability to meet your particular needs. (Solution practicality, no solution, a work-around or standard capability with set up).
• Be prepared to accept that not everything you want can be demonstrated. Understanding the proposed solution and gaining commitment for its delivery then become pivotal

Great software poorly implemented and poorly supported by vendors or implementation partners will fail to deliver you the investment and business outcomes you expected to obtain.

Considerations when it comes to selecting an implementation partner include:

• Some vendors aren’t particularly selective when it comes to appointing new partners to their ranks. It tends to be all about software sales not project success.
• Not all implementation partners are equal. There is often a large difference amongst service providers when it comes to service capabilities, experience and project approach.
• There is no substitute for real project experience, a proven project delivery model and success with companies and projects similar in size, complexity and scale to your business and project.
• Different sized projects demand different disciplines and processes that not every implementation is suited to fulfilling
• Where to if a project fails and it's a direct vendor relationship
• Where is support delivered from and by whom
• A clear demonstration of a project implementation model and the intention to follow it when delivering your project