Selecting a New Enterprise Resource Planning (ERP) System

The Importance of Building an ERP Selection Committee and Identifying Your Needs

First and foremost, it is imperative to create a selection committee made up of individuals throughout the organization. This committee will be responsible for moving the company through a successful selection by representing its functional area, defining the software requirements, evaluating and comparing different products based on those requirements, and advocating for the product chosen. Building a selection committee has been shown to be more successful than one person in IT services, finance, or production running the project themselves.

Selecting a new ERP system can be a humbling challenge and defining proper roles and responsibilities for your internal team cannot be stressed enough. While ERP implementation teams can vary in terms of size (number of people), there are several main roles that are needed no matter the size of the company.

Project Owner

It goes without saying that this company executive will have high-level responsibilities. Ultimately, it is the project owner’s decision to purchase and implement a new ERP solution. While they might not be involved in the actual implementation itself, project owners are responsible for ensuring that both the ERP vendor and the ERP implementation team are meeting expectations and goals. Other responsibilities include change management, solving unforeseen issues, and risk mitigation.

Project/Implementation Manager

The project manager works with the project owner to identify the key team members in a company that will develop the goals and requirements for an ERP solution as well as a budget. This individual is responsible for working with your selection consultant to review the documented needs, prepare the vendor request for information, determining which vendors will be evaluated and participating in vendor demo’s and leading the discussion with the selection team on which vendor is the best fit. After the final system selection is made, he or she coordinates with the vendor to develop an implementation plan. It is then the project manager’s job to coordinate the implementation consultants with the implementation team and update the project plan as required. He or she will also liaison with the project owner, keeping him or her up-to-date of the implementation status along the way.  Sometimes the Project Manager and Implementation Manager are the same person and sometimes two different individuals.

Superuser(s)

A “superuser” is someone who learns the new ERP process and solution for each department – a cross-functional expert, if you will. Once the implementation is completed, they will be the internal “go-to” people who can help with all aspects of the system. Since he or she works with the vendor consultants in each functional area, the superuser will dedicate the most time to the project. Some companies may have different superusers for IT services, operations, and finance, while others make the project manager their superuser. Larger companies should consider more than one superuser. The stronger the superuser, the more self-sufficient your business will be once you launch, making him or her the single most important team member in the long-term success of your ERP system.

Functional Team Members

The key to choosing functional team members is to find people who can clearly define and explain the current process and future needs for their core area. Your team could consist of representatives from each of the core functions – purchasing, inventory, order entry, manufacturing, and finance for example. In a larger company, each of these disciplines may have a representative from each area such as collections, A/R, A/P, and so on from finance. In a smaller company, this might mean just one person from each discipline. The team will also be the trainers for the others in their respective departments once a system selection is made, so choose individuals who can teach their co-workers.

Now that you have established your committee, you can begin to think about ERP implementation. In most cases, there is a series of steps to take when considering a full existing system replacement:

Identify Your Needs

Many companies begin to look for software before they even know what it is they’re looking for. Then, once they have chosen a product and begin to use it, they wonder why they struggle and why the system is incapable of doing what the company needs it to do. Thoroughly documenting your current procedures and processes will allow you to identify areas in which you need to improve, identify areas in which you are succeeding, and, most importantly, keep you from forgetting those needs that are essential to keeping your business going. As you begin to look for a new ERP system, conduct your search based on individual areas that you have identified as critical such as payroll, job costing, and invoicing, for example.

Identify Key Requirements

A key requirement does not include, say, the ability to print checks since all software can print a check. Rather, focus on the most important requirements for your specific business such as return material authorization, customer discounts based on sales volume, seasonality inventory levels, customer asset listing, technician or machine scheduling, serialized service history, and supplier price-list imports, for instance. Document the key items you need your system to perform and organize these requirements by functional area. Remember to include reporting, as many companies have specialized information they must include in management reports in order to make daily business decisions. No two searches for ERP systems are exactly alike, and what your company is looking for will be vastly different than the next business. This is why it is imperative that you take a look at your individual company and identify your own needs and requirements before you even begin your search to avoid wasting your – and your team’s – time.

In Part 2, we will look at how to determine which systems to include in your search and how to narrow your options to just a few for demo.