Most businesses are seeking off-the-shelf ERP apps, instead of writing them from scratch. They will be less expensive with much lower risk of mistakes, and if done properly, much faster to Go Live. However, some people fall for the conning Salesperson, and start the process by purchasing the ERP software; which is wrong.
There are several steps to take, before deciding what ERP solution to purchase. You'll save yourself major headaches during and after implementation. Here is what I suggest doing first:
- Get C-Level Management sponsorship, be it the CEO, CFO, or CIO. Authority is needed to facilitate entry to the different areas of the business.
- Assign a Project Manager.
- Gather the business requirements, from all departments & line-of-businesses. This will protect you from saying "Oops" later, and give you the knowledge of how the business is running.
- Did you assign a Project Manager yet? Just in case you forgot.
- Hire a consultant; to review your business requirements and match them to your processes, policies, and procedures. If you have a mismatch, then you'll need to adjust your processes, policies, and procedures. Once the new processes, policies, and procedures are approved by senior management & your auditors, implement them in your daily business.
- In parallel, Change Management is needed, if you're moving the users from an older software environment to the new ERP environment, or if there is a mismatch in your processes, policies, and procedures. This requires additional instructions from your consultant, and it involves senior management, internal marketing, and training.
So, what do you have now? You have committed senior management, with working business processes, policies, and procedures. Now, we move on to the next step: shortlisting ERP providers, that have matching solutions to your business needs.
Two flavors of solutions are out there, subscription-cloud-based solution, or a solution that runs in-house. There are pros and cons in both, and the business needs to chose where to go, based on performance and running cost. Cloud solutions are off-site, resilient, will not need servers, backups, or operators. It can all be part of your subscription. However, it is 100% dependent on your internet communications infrastructure, in addition to the sound LAN/WAN communications infrastructure . While in-house will need server rooms, servers, backups, operators, and a disaster/recovery plan. In addition to the sound LAN/WAN communications infrastructure.
The running cost will differ in the number of people managing the solution, and the support contracts for the software, hardware, and server rooms (air condition, fire prevention, servers, OSes, ... etc).
What's next? You've selected the software solution from a certain vendor, defined the BoQ (bill of quantities). Next, is the shortlisting of available implementation partners. This will be tough, because their resources change more often than you think. So, don't focus much on the CVs you'll see from them, because they'll change by the time you sign the contract.
Ahaa, this is the magic word: The Contract. This is where you agree on deliverables, timeline, and cost; neglecting availability of resources. The most common excuse I've heard from implementers in Saudi Arabia: the resource's visa expired, and had to leave the country. So, make sure you've covered this part when shortlisting the implementer. You can add a delay penalty clause, and insist on a handover between resources, before any visa expires. Your Project Manager should have dates of everything (you assigned one, right?).
ERP software, selected. Implementer, selected. What about your IT team? Your consultant should provide you with an updated structure of your IT Department, that needs to be executed with you & the HR Department. Once the team is in place, you can sign your software and implementation contracts, and start.
What are the expected hurdles?
Let's see.. Inaccurate implementation plan & budget, expired support contracts, expired visas, delayed payments, lack of internal resources, resistance from users, change of scope, lack of governance, power outage, network outage, coffee outage, ... Just make sure they're covered by your Project Management and IT teams.