Mistake #2 -Skipping The Planning Phase Because It “Takes Too Much Time”

  • 7 August 2013
  • cre8
Categories: ERP

Tags: , , , , ,


The time you invest in planning your selection process will easily pay off before the process is complete.  Not documenting your objectives and timelines will certainly result in delay—or possibly derailment—of the project.

The most important first step any business needs to take is to define your compelling event.  This is your definitive answer to the question, “Why now?”  Distributors have many reasons to consider supplanting their existing ERP system, whether it’s replacing outdated technology that creates pain points for their staff, improving their ability to service their customers, or taking advantage of functionality that can streamline processes and dramatically improve profitability.  Compelling events are often tied to a process mandate from a key business partner, or an organizational change such as a merger or acquisition.


Without a compelling event that clearly outweighs the other reasons to remain on their current ERP system, distributors often invest considerable time and effort in an evaluation process, only to decide to maintain the status quo.  You must define your compelling event early enough so you can balance it against the results of doing nothing and any unanticipated concerns that arise.  Document this for everyone to read and understand.  This is your guiding force throughout the evaluation process.


Once you have identified your compelling event, the cornerstones of your evaluation process should be:  identifying your critical business issues and needs, and defining the selection criteria for the right software and technology provider.  With those pieces in place, you will have the proper framework in which to decide.


• Determine your budget and ability to afford the investment.  If the initial investment amount is a concern, the software provider may have a Software as a Service (SaaS) solution that allows you to essentially “rent” access to the software in the cloud, decreasing your need for up-front cash.

• Assign the selection team. Be sure to identify the executive sponsor and all critical stakeholders.

• Identify areas of your business you want to improve, and list your staff’s critical business issues.  Also note areas in which you already do well, so the solution provider can address your most important needs.  This doesn’t need to be a 200-page document with 10,000 requirements, only a checklist to keep your team focused on solving the problems that are important to you.

• Define selection criteria (Request for Proposal, or RFP) for the solution and the provider partnership.  Criteria such as long-term financial stability, in-depth knowledge of your industry, investment in research and development, implementation process, and technology vision are all important factors to consider.


Also, be sure to develop a timeframe and stick to it. It’s human nature to procrastinate, and the process of switching software is not fun.  Prepare yourself by documenting all of the evaluation activities you intend to complete (discovery sessions, demos, site visits, etc.), and set tentative dates for completion of each.  If milestones are not set on the front end, you run the risk of delaying the decision and costing your business significant time and money.  Whether you’re a $100M+ multi-branch business or a 10-employee, single-location distributor, there is a basic sequence for selecting a technology partner that every company should follow:

  1. Send the RFP to potential solution providers.  Allow two weeks to get responses back before narrowing your search to the top 3-4 companies, based on RFP responses.
  2. Hold a meeting to review business objectives with the solution providers.  Discuss the selection process and criteria and agree to the sequence of evaluation events.  Also be sure to request a copy of the contract they will ask you to sign.  Make sure there are not any major legal or business roadblocks now, before you invest too much time with a particular software vendor.
  3. Complete a credit application and deliver to the solution providers.  It’s best to address this step early in the process.
  4. Hold a meeting to review business processes and conduct a demo with the solution providers.  Review each solution provider’s return on investment (ROI) analysis and confirm that all of your requirements have been met.
  5. Narrow your search to the final two solution providers.
  6. Conduct reference calls and visit the solution providers’ reference customers.  Be sure these distributors are similar to your company in regards to industry and purpose—but you’ll want to see distributors that represent what you aspire to be in a few years, not what you are now.  The most important question to ask of a reference is: If you could do it all over again, what would you do differently?
  7. Confirm that each solution provider meets the partnership selection criteria.  If you can, visit the solution providers’ head office.  This will give you the opportunity to see their operations in action and meet the leadership of the organization.
  8. Consider and address all risks before proceeding.  Make sure you are comfortable with your plan for mitigating any perceived financial, operational, or talent risks.
  9. Decide on the final solution provider and execute partnership agreements.  Be sure to review the solution provider’s license and service agreements with legal advisors.

Follow this seven part series post from Cre8tive Technology & Design (www.ctnd.com).

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