Investing in an ERP is a big decision, predominantly due to the time, cost and other resources involved. It is thus obvious that when you invest a large chunk of your capital in buying an ERP solution, your vendor should be equally good. This presentation will direct you through a systematic ERP vendor selection procedure and will help you to choose the best ERP vendor for your business operations.
2. An Overview
Introduction
ERP Vendor Selection Criteria
Choosing the right ERP vendor
ERP vendor selection process
Key points that cannot be neglected
What if you wish to work with an overseas ERP vendor ?
Frequently asked questions
Conclusion
3. 1Introduction
• Enterprise Resource Planning (ERP) systems are a valuable tool for any business. They help in
managing activities such as planning, research & development, procurement, supply chain
management, sales, marketing, et al.
• There are countless ERP systems available in the market, so it’s important to choose a right ERP
that fits your organizational needs and processes.
• Choosing a right ERP vendor is as important as selecting a right ERP system for your business.
Establishing a long-term relationship with the ERP vendors will help you business to gain a
successful implementation of ERP in your business resulting your business to work smoothly and
effectively.
4. 2ERP Vendor Selection Criteria
Let us know the criteria's to be considered while evaluating and selecting an ERP
vendor for your business –
5. 3
Develop a pre- requisite checklist of ERP vendors and maintain a successful relationship with proper
follow-ups. Ask few questions to the vendor in order to analyze that they are a good partner for your
business –
• How the vendor company has changed over the recent years ?
• Ask about the most recent products , and what new products they plans in the future years ?
• Ask them about the company’s industrial experience and how well do they understand about the
industry .
• Ask them about their specialized experience in ERP solutions and seek out for few customer
reference where they have implemented.
• Know their future plans and whether they are likely to continue the ERP implementation in its
current form or would change.
1. List out the ERP Vendors :
Choosing a right ERP vendor
6. 4
2. Consider Technical Options Available:
While seeking out for a perfect vendor, ask some of the technical key points such as -
• Whether the vendor provides ERP solution on the base platform or will customize for
your organization?
• Whether the solution can meet the technical needs of your organization?
• If the solution is scalable, can adapt in response to growing users or increase in data?
• The speed of the product and its impact on the end users?
• Possible support for multisite or multi-company environments if you need to work with
multiple operations?
Choosing a right ERP vendor
7. 5
3. Know the costs :
Ask the vendor to provide you with the Total Cost of Ownership (TCO) which should include:
• License fees (including third party)
• Implementation fees ( along with training and consulting)
• Support
• Hardware and Software costs
• Networks/communication
• Software customization
• Maintenance fees (including maintenance on custom development and third party
products)
• Any other fees not included in the proposal
Once you have finished with these evaluations, estimate whether the projected return on
investment will be significantly more than the costs.
Choosing a right ERP vendor
8. 6
4. Tell your vendor about current business scenario
• Define all the current challenges your organization faces that would be solved through an ERP
system, evaluate them and ask your vendor the plans in order to rectify them
• If possible, arrange a small demo to see the platform or a meeting to discuss all the pros and
cons of the system
•Ask your vendor about their methodology for smooth implementation, and their long-term
support to ensure the system works and your goals have been met.
Choosing a right ERP vendor
9. 7
5. Evaluate the training and support offered :
Once you are well versed with the type of ERP you want for you business, ask them about the training and
support availability :
• How will the vendor ensure a successful implementation for our business ?
• Whether the vendor offers in-house support, or outsources to another company.
• The time availability to train the people or will their be any training available to the members of your
organization during and after the installation process.
• What is the vendor’s standard practice for fixing bugs and releasing new versions of the platform?
•. Do they ensure 24*7 availability for training and support ?
Choosing a right ERP vendor
10. 8
Now that we have some of the key ERP selection criteria , The next step comes
selecting the most suited ERP vendor. So, before you make an expensive, long
term decision – get the answers you need to select the best core vendor by
following these steps –
ERP vendor selection process
11. 9
Step: I
Analyze your business requirements
While evaluating about your business requirements, keep in mind that ERP’s advantages lie in data
analysis, thorough and accurate reporting functions, and multiple process automation capabilities.
Evaluate your current business operations and how ERP software can fit into them.
Gather all business requirements, also note down the challenges that your business is facing. If possible,
try to create a team that can gather information. Define the core technical and business requirements.
Define the vendor product and service with ERP capabilities which they offer and budgets with your
business process.
Publish an overall requirements document about your business and vendor requirements. Consult with
staff, in particular senior-level executives who can engage and encourage employees in the process of
implementation.
12. 10
Step : II
Vendor Hunting and Short listing
• Compile the list of all possible vendors which can help you in delivering the desired product
or services.
• Obviously not all vendors can fulfill your requirement, list out the few out of all with suitable
vendor background.
• Draft a Request for Information (RFI) and send it to all relevant vendors to gain more
information over the product or services .
• Evaluate their responses and select a small number of vendors that will be your short-listed
vendor and qualify them to the next step of action
13. Step : III
Ask for RFP or RFQ
• Write a Request for Proposal (RFP) or Request for Quotation to the vendors so that you can go a
step ahead in select the best one.
• The document should contain – submission details , business overview and background, executive
summary, assumptions, business constraints , terms and conditions, selection criteria etc.
11
14. 12Step : IV
Proposal Evaluation and Vendor Selection
• Review the vendor proposals and discuss it with your management team to find out the most
feasible vendor for your business.
• Match up your requirements with the vendor requirements to find out the most deserving
vendor out of all.
• Assign important value to each requirement. Donot compromise on any requirement and
count the performance score for each vendor proposal.
• Finally calculate the total performance score and compare with all of them to find out the
one which has maximum score.
15. 13Step: V
Selecting the finalist
• The maximum scorer in the performance can be titled as the most eligible ERP vendor for your
business.
• Next step will definitely involve communicating with that ERP vendor to move on further for
implementing the ERP system in your business.
16. 14Step : VI
Contract Negotiation Strategy
• The final stage of vendor selection is contract negotiation. Review your business objectives
for negotiations.
• Rank your priorities along with its alternative solution.
• Have a clear vision for what you need and what you want so that the vendor can analyze
the customizations (if needed).
• Define timely deadlines and benchmarks for implementation to get completed.
• Analyze the potential liabilities and risks .
17. Key Points that cannot be neglected - 15
Donot forget to make a document of all gathered requirements before approaching to any
vendor. Remember documentation is a must.
Always ask for Business Intelligence tool because the industries are digitalizing and so are the
businesses, you must gain a competitive edge over others through an ERP.
Always think twice before going for a process to get customized. Think of its real relevancy in
your business operations.
Budget is important so just don’t go ahead with software that claims to be on the top of the
market and spend everything on it and have shortage in budget for your business.
Always take necessary training and ask for support where ever you feel like because ERP bring
a little change in your business. Thus, be prepared to learn and accept this change.
18. What if you wish to work with
an overseas ERP vendor ?
16
What if you have selected an ERP vendor that is located overseas? But you can’t let it go just because of distant
location issue because the software that they provide fits your organization’s need perfectly. Here is the solution :
• The prime rule- Ask for other customer references and evaluate the reliability of the vendor, check the company’s
history and cross verify every detail with the clients. A reliable ERP vendor provides all the information asked.
• Select a vendor who has a reputed name in the market and has delivered quality solutions to your
counterparts. Look for the depth of functionalities meeting your requirements and the scope of customization.
• Make sure that the overseas vendor has in-depth knowledge about technology prevailing in your country.
• The discussions between the vendor and customer regarding product offering, price, upgrades, support and
service charges should be documented and signed under a contract as per the laws of both the countries.
• The communication should be periodic and consistent for a cordial vendor-client relationship. You must also
assign a team of your employees with vendor team to monitor the progress.
Get additional Tips on Working with Overseas ERP Vendor on our blog.
19. Frequently asked questions
Listing out 12 frequently asked questions by customers to the ERP vendors which can also help you in selecting desired
ERP vendor for your business :
1. What is your experience in working with organizations similar to mine?
2. What is the history of the your ERP product?
3. Are you an ERP reseller or does your team include the original software architects?
4. How often are releases or upgrades performed?
5. How is the ERP pricing structured?
6. Who will be helping us with ERP implementation & what is their experience in working with organizations like ours?
7. What is involved in customizing the software?
8. How long does an ERP implementation usually take for an organization like mine?
9. What training do you provide to the implementation team and users?
10. Can I see examples of your user documentation?
11. What are the options for ERP support after go-live?
12. Where is your support team located, and what is their typical response time?
Reference : http://www.trekglobal.com/erp-resources/articles/erp-vendor-selection-criteria-the-12-best-questions-to-ask
17
20. • Why to strangle in choosing a right ERP vendor for your company, when you can just follow
these simple steps to get the best one.
• These tips will direct you through a systematic ERP vendor selection procedure and will help
you to choose the best ERP vendor for your business operations. Check your list and get the
best possible ERP for your business now.
• BatchMaster is one of the leading ERP Vendor offering varied services to streamline your
business activities and make your business run smoothly and efficiently.
Conclusion 18
21. Resources -
• To know more about our products and services, visit: www.batchmaster.co.in
• Additional checklist on selecting a right ERP software is present on our blog
• Read our blog if you want to know about overseas ERP vendor selection
• Email us at : sales@batchmaster.com
22. About BatchMaster
30+ years of experience
ERP solutions for small to mid-sized industries
SAP B1 and Microsoft certified solution
Over 40,000 users worldwide
Headquartered in California, with footprints across the
world
A global presence with offices in 3 continents- North
America, Australia, and Asia
7 offices round the globe
Available in 3 languages- English, Chinese, and
Spanish
Original developer of formulation system in ERP
Consistent record of never exceeding
implementation time of 350 to 500 hours
16