ERP Functionality: When less is more

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I have been through many situations in which the motivation of a company to acquire an ERP system seems to be the wrong one. Decision makers know that any system they implement is likely to stay with them for a while.  So, in their quest to get the most functional and flexible system, they will write up a big Request for Proposal (RFP) and list each and every functionality they can think of, in an attempt to compare systems vis-à-vis in an Excel spreadsheet.  Vendors want to sell, so they will answer "Yes" on every cell possible, and the customer hopes the product with the most "Yes" answers on the RFP is the best one.

There are a number of reasons why this approach is not a valid one and does not guarantee you will get the best system.  None of them is more important as the fact that this way of thinking misses the main point: The real needs of the customer.

Trying to list every single function of an ERP is like asking the wrong question in the first place. The customer is asking: "Do you have this or that function?" when he should be asking "Here is my problem: How does your product solve it?"  Customers need the vendor to understand their problems and needs, before they can come up with a proper solution.  Different products have different approaches and functionalities to tackle similar problems, and there is no easy way out to defining which is better for a particular need: Customer and Vendors need to do their homework.

In short: Rather than providing every little piece of functionality, the vendor that focuses on the real needs of the customer will be the one capable of providing the best solution, even if the system is not the most expensive or the most functionally powerful.

So what can you do to improve your chances of selecting the best system for your needs?

  • Analyze. Do your homework. Sit down with each vendor. An RFP is a good starting point for the vendor to feel your pain. However, you and your vendor need to build a bridge between what you need and what the product offers.  This bridge must be the focus of your attention during this analysis phase.  Avoid investing time and money looking into functionality that you do not need.  What good is a fancy web-based chart if you cannot get the right data into it? Don't just take the "Yes" from the RFP; learn how the function works and what is behind it.
  • Divide.  You don't have to do it all at once. In fact, this is not a good practice. Break down your requirements into critical, important, and nice-to-haves.  Then, create a project in phases, tackling the critical and the most important objectives first. Other needs can wait.  Even if the vendor has the bandwidth and resources to work on your financial, human resources, and manufacturing needs all at once, it is most likely that your company does not.  One of the main advantages of executing a project in phases is that by starting with the basics (say, the Financial area), you buy time to learn more about the product, its advantages and limitations, as well as that of your vendor.
  • Conquer. The impact of an ERP system implementation goes far beyond whether it does this or that.  Factors such as how easy it is to learn and use, flexibility and quality of the functions it does offer, and customization capabilities at a reasonable cost, are what make a good bridge between your needs and the product. Select the right team, and get going.  We have written before about what to look for in your ERP vendor.  It is very important to choose the right partner, and not only the right product.

ICON has been in business since 1987, making good on our promise to make our customers more efficient and profitable.  Our approach is to understand our customers' needs, and not just fill out an RFP.

By ICON, Dominican Republic Dynamics GP partner

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