It is important to realize that during ERP selection and implementation a person should not always believe everything they hear. Here are some common myths, which I will attempt to debunk:
Myth one: “To make a good decision about which ERP system to choose, you’ll need a detailed RFP (Request for Proposal) to send to each vendor that you want to consider.”
When it comes down to it, RFPs often simply amount to a waste of people’s time. A completed RFP can be hundreds of pages, which clearly shows that it is a heavy investment of time.
A RFP is meant to gather detailed information about your selection criteria, make an “apples to apples” comparison of the vendors, and evaluate them based on a weighted analysis of their scores. Years ago, the RFP process uncovered glaring deficiencies and red flags, but today those red flags may not always signify something truly problematic or outstanding. This is because the General Ledger modules of the top ten accounting systems are not all that different from one another in functionality. In fact, the functionality differences between the most popular systems are insignificant enough that they’ve practically become a commodity.
So what is a better alternative?
A better focus of attention should be targeting the exact nature of the business problems that you’d like your new system to solve. Many businesses spend unnecessary time in developing massive spreadsheets to handle complex revenue billing or contract scenarios because their system of record’s core functionality did not fully cover their needs.
Avoid these hassles by identifying the specific areas that are painful to address with your current systems and processes. These areas will show you the issues and needs that your vendor should provide.
Skip the pointless comparisons of ubiquitous features. Why spend countless hours on comparisons when you can direct your selection process straight to the issues that need to be identified and solved?
Myth two: “A detailed RFP will help you filter out products and/or vendors that don’t fit your needs.”
This might be true, but unfortunately some providers are not always honest during the RFP process. These providers will over-state their capabilities in order to be considered and move on to the next step. At some point there’s no turning back, despite the fact that a prospective customer may realize that they’ve filtered out an honest provider who was just as capable as the not-so-honest ones that were short-listed.
A more resourceful use for RFPs would be to use them as a checklist after the vendor has been selected. After you’ve made a final decision, using the RFP checklist can provide a final confirmation that you haven’t missed anything as part of your due diligence. Referencing this as a final step in the process helps set expectations for the implementation before the project starts.
Myth three: “Customizing/configuring an integrated ERP system is preferable to adding best-of-breed solutions.”
Customization involves writing code. Some vendors may sometimes use the term “configuration” in a less-than-accurate manner, leading people to believe that an entire module can be “configured.” However, creating something that before was non-existent generally involves writing a code for it. In order to create the missing functionality, someone will need to write the new code -- even if it is done with the tool set that is part of the product in question.
This can complicate and substantially increase the cost of implementation and maintenance, which would make upgrades a great deal more difficult and expensive. These changes also run the risk of relegating your company and solution to a “community of one.”
Rather than customization, people have the option to look at available best-of-breed solutions to fill the gaps in their out-of-the-box ERP solution. The benefits that you’re looking for in an out-of-the-box solution can often be met more cost-effectively and productively with targeted best-of-breed solutions. Take our
By Bob Scarborough,