Disturbing ERP Software Selection Trend

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Historically, the typical ERP selection process was driven by a bloated request for proposal (RFP) process that was and is a deeply flawed methodology for selecting business software. For example, if you were building a home, which would, you expect to deliver a more satisfactory result: handing your builder a checklist of required rooms or a blueprint?

A post on this website provides excellent insight on the flaws inherent in the ERP selection process: One…Two. Three Strikes against the RFP process for selecting ERP software.

For years we have been working with our customers to look at business processes, both existing and optimal, as the preferred core methodology for selecting ERP software. While that sentence is easy to write it requires a deep level of business experience to carry it out in practice.

If you search “ERP selection process” there are countless whitepapers and tools available to assist you with the process. I always caution my clients that this is a good starting point but not the ultimate solution.

Give someone a checklist of “features” to fill out that allows for easy comparison of products in a spreadsheet and you are fighting an uphill battle when advocating the difficult work involved in doing a critical analysis of your business process composition and how it maps to various software products.

Unfortunately it appears that the RFP process is being replaced in many selection instances with an even worse process: rapid selections based on web site content.

Recent sales strategy meetings with ERP vendors have highlighted this shift in buying behavior. Evidently there is a large segment of the ERP market that is making quick buying decisions based primarily on content found on software vendor websites.

While this may be a perfectly logical approach for selecting a temporary “throw away” solution like QuickBooks if you are in startup mode it is no way to select software if your business has any level of sophistication. To see if you have outgrown your startup software check out this excellent post: Practical advice for companies that have outgrown QuickBooks.

Imagine picking medication based on drug company web sites or commercials without consulting a doctor.

While this trend is undoubtedly driven by our decreasing attention spans and need for instant gratification in a social media world it does have predictable results: an increase in less than ideal ERP software selection decisions that often require expensive “do-overs”. (Anyone that has participated in an ERP implementation recognizes that the real cost involved is not in the software).

Interestingly the negative side effects of this accelerated decision process have been recognized for several years; this post from as early as 2008 is a great example: Customers are running away from NetSuite.  For years overly aggressive sales tactics by companies such as NetSuite have been thought to be the reason that the company was very touchy about its customer retention rate. Logically, is that not a different side of the same coin? Making a poor buying decision based on overly aggressive sales techniques or making it because you believe the contents of a web site lands you in the same spot, with a less than optimal decision.

 What is the right answer? The answer is that it depends. The answer is not to break out hundreds of pages of a generic RFP or buy based on some slick marketing materials. The answer is to gather all of the relevant information that you can easily gather on the web and then sit down with someone whom you trust. Someone who has experience that you trust to weed out sales hype and concentrate on benefits, not overvalued “demo” features.

Kind of like working with a doctor you trust.

Peter Joeckel is the President and Founder of TurnOnDynamics a Microsoft Dynamics GP (formerly Great Plains) and AX (formerly Axapta) partner primarily servicing the Texas, Oklahoma, Louisiana and Arkansas (TOLA) area. While it serves a diverse customer base TurnOnDynamics does have specialized expertise in selecting and implementing advanced ERP solutions for manufacturing and software companies.

Additionally, TurnOnDynamics is an investment and advisory firm that focuses on the strategic concerns of executives and owners with unique Dynamic CFO Services.

by TurnOnDynamics

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