Picking an ERP (enterprise resource planning system) is a daunting prospect. ERPs are not only more expensive than accounting software, they are more complex to set up and operate. Then there is the cost of retraining; an ERP is a business platform usually used by every employee in the company.
A quality implementation partner can make a huge difference to the time it takes to roll out the ERP and the speed at which your staff adapt to the new system.
An expert panel at SuiteWorld 2019 discussed the best methods for selecting an ERP implementation partner. I collected the panel’s top tips that are most relevant for smaller businesses and added some of my own.
1. Shortlist using pre-qualifying questions
The first step to identify a shortlist of candidates, is to run them through a set of screening questions, says Paul Kininmonth, Senior Project Delivery Manager at Technology Evaluation Centers. A scorecard with key questions will help you quickly screen systems before you spend time investigating them in depth. For example:
- Does it have to be a cloud software?
- Does your industry have specific restrictions that mean it must be an on-premise software?
- Do you need specialised compliance reporting to meet government regulations?
A scorecard is simply a spreadsheet with the screening questions as rows and the candidate apps as columns. Run through the questions and check or score the app for each question.
Some implementation partners maintain a database of vendors’ responses by industry. They can then quickly pull up a shortlist for your industry.
2. Prepare to handle change
“People usually buy software that is reasonably good for their business, but most of the failure is in the execution”, says Craig Zampa, consulting principal at Plante Moran. A strong implementation partner will manage changes to the scope of the project. They can also advise on how and when to introduce changes while managing their impact on the original project timeline.
One of my personal favourite qualification questions for implementation partners is: How do you manage scope issues and unexpected functionality mismatches during implementation? If their answer is something like: “We scope out everything up front and then it’s smooth sailing”, I recommend not to hire them.
The scope will change and issues will come up – they always do. We need to be prepared to manage them. A partner that utters “too easy” is either being dishonest or has never done it before. There is no point looking for a partner that claims to have bulletproof methodology. Look for those who plan well and have the depth of experience to anticipate, identify and manage the issues as they come up.
3. Consider the human aspect
“You can do everything right in the project and still have an imperfect implementation. It is people, process and technology. Not just technology,” says Zampa.
The transition period immediately after “go live” is critical. That’s when you come across scenarios you did not anticipate. It’s also when you identify the processes which team members are struggling to adopt. For example, staff may revert to old habits such as referring to spreadsheets outside the system for the latest pricing or for a checklist of codes.
Dealing with these issues comes down to being empathetic and helping staff work through the stages of learning new methods.
4. Seek out a partner who challenges you
“We are the advocate for the project, not just the client,” says Paul Kininmonth, project delivery manager at Technology Evaluation Centers.
You need an implementation partner who has the success of the project in mind, even if the milestones change. A partner’s role is to see out a successful implementation, not just accumulate hours, get paid and move on.
You need your partner to understand what you want to achieve, and then challenge you on how it should be achieved.
Likewise, a partner is not there just to move data from the old system to the new one. They need to think of the best ways to structure the data in the new systems and ensure you make the most of it.
So when you ask for a particular report to be created, you want your partner to ask what you need it for and when it will be used. Maybe what you are really after is an exception notification, a dashboard widget, or perhaps a different metric altogether.
You want your partner to think for you and contribute their knowledge. As Kininmonth says, you want your partner to advocate for the success of the project and the business, and not just worry about you liking them.
5. Don’t change for the sake of change
Before embarking on a project of change, consider what you already have in place.
One business that called for help was already using an ERP system, but only for finance and not for operations, says Richard Sides, COO of Ultra Consultants.
A new system is not a magic solution. If you are struggling with your current systems, you need to make sure that you have really exhausted the options before moving on.
Contact the software company or bring in an expert to see if you are using the system correctly. Maybe there are options you were not aware of, or maybe it wasn’t set up properly to begin with.
Any responsible implementation partner would ask you these questions before they propose a change to another system. If they don’t, maybe the partner has a vested interest in selling software rather than prioritising the needs of your business.
6. Understand the new ways of working
“The good news about ERP is that it’s integrated. The bad news about ERP is that it’s integrated,” says Ultra Consultants’ Richard Sides.
With an integrated system, you lose the buffers such as spreadsheets moving between people. The review points and manual processing in those buffers act as controls that need to be rebuilt within an ERP. Now that processes no longer rely on the movement of spreadsheets, an ERP needs to notify everyone when transactions take place.
If you blindly replace non-integrated processes with integrated ones, the controls in the business disappear, cracks will appear in the new set-up and things will fall through.
People may feel that they are losing control.
I once worked with a bookkeeper who didn’t like Xero’s repeating bills because ‘I need to create the bills myself so I remember they happened’.
Your partner may need to implement other ways to make sure the bookkeeper is aware of when Xero creates a repeating bill, or better yet, ask why they need to know. If it is to ensure that no bills have been missed, maybe your partner can set up an automated control to check for missed bills instead.
7. Check that the entire team is on board
”Make sure that every executive team member is behind the change. We go through that before anything else. Otherwise, it’s a waste of time,” says Shawn Windle, managing principal of ERP Advisors Group.
These are the disillusioned words of a warrior who has been there before.
If a member of the executive team is not behind the change, the implementation partner will have to deal with their constant objections and reluctance to give the new system a go. It is like trying to navigate a boat along a winding river with one rower drilling holes in the bottom of the boat.
It is ok for execs to have concerns and voice them, and partners need to make sure they prepare a well thought response to manage any risks they raise. But everyone in management needs to be willing to support the new system.
If they aren’t, as Windle says, the whole project will be a waste of energy and time.
Disclosure: Inbal Steinberg travelled to NetSuite SuiteWorld in Las Vegas as a guest of NetSuite.