The SoftSelect ERP Selection Process Details

Phase 1: Business Review/Develop ERP Long-List

1. Project set-up and training:

As with any complex and important initiative, it’s crucial to be prepared and to have a realistic understanding of what resources, energy, and commitment will be needed.  We’ve continuously enhanced our methods to help our team and clients better prepare for enterprise software projects, based on the experience of more than 900 projects. These few hours of meetings, presentations, and team discussion can significantly contribute to project continuity, momentum, and quality.

2. Strategic and global influences Discovery :

Client companies are discussed in the context of how the company might be different for the reasonably foreseeable future. These are major differences, such as new product lines, new locations, international business, changes in customer status, etc. These findings in turn may influence the priorities that drive a selection of ERP software.

3. Business process area Discovery :

Determining key ERP selection functionality criteria is the first purpose of the business process areas interviews. Other benefits of these interviews are (1) increased awareness (and confidence) about the ERP improvement project for those involved and (2) the development of valuable discovery (improvement ideas, current problems, and uncertainties) which is useful to prepare for and control the implementation. Before the interviews, we provide training to business process area representatives so they may better prepare for the interviews.

4. Enterprise software strategy – Where ERP fits:

It is important to have a good sense of the enterprise software application status and strategy to properly understand what company processes ERP should support. This question needs to be answered to enable a concise review of ERP and purchase appropriate ERP access. Often a buyer’s expectations of ERP do not align with what ERP should practically support for their company. If not corrected this can result in the purchase of inappropriate software access, disappointment during the implementation or at some later point in time, and likely increasing to initial and ongoing costs. In this step, we:

  • Establish the Enterprise Software Strategy diagram which models all major applications and any minor application that has some level of interaction with ERP related business processes or metrics.
  • Establish the ERP boundary within the Enterprise Software Strategy diagram from (1) information gained during business process interviews and (2) EAI-SoftSelect’s deep understanding of the appropriate functional footprint for ERP for a company of the size and type as the company seeking ERP. The diagram includes reasons for why various boundary business processes are contemplated to be fully or partially in or out of the estimated ERP boundary.
  • Develop an initial integration plan which can influence the boundary of the ERP, affect development decision of boundary applications, and impact the approach for negotiating ERP access rights.

5. ERP software Long-list development and discussion:

This process step uses (1) SoftSelect business software research and (2) the SoftSelect team’s general knowledge and insight of specific business software, software vendors, and the current business software market. Key influencers for listing ERP are (1) the business application’s track record of use in companies similar to our clients and (2) that the ERP offering has been substantially modernized.  This includes providing our opinion on any ERP software not included on our suggested list in which your company has an interest. A thorough briefing and discussion of the long list is provided so members of your selection team and executives can build confidence in the list.

6. Locate appropriate ERP resellers:

Based on the long-list ERP sales structure and attributes of the ERP buyer, some ERP candidates may be sold through resellers. These resellers nearly always are implementers of the ERP and the implementation is their main reason to seek new business. In these situations we orchestrate a screening process to locate one or more appropriate resellers based on screening factors related to geography, ERP buyer industry and company size experience, and apparent ability to be adaptive to the EAI-SoftSelect process to achieve superior ERP access and implementation services cost and terms.

Phase 2: ERP Software Long-List to Short-List

1. Identify key ERP functionality objectives:

These are carefully chosen company objectives that are designed to differentiate long list candidate ERP applications.  They are referred to as High-level Differentiators or HLDs. Specifically:

  1. Using the results from business process discussions in selection phase-1, develop functional HLDs, typically 15 to 25 HLDs.
  2. Review and tune standard SoftSelect HLDs, which address standard ERP tools for developing functionality, workflows, metrics, and integrations that should be present in a modernized ERP, typically 5 to 7 HLDs.
  3. Combine all HLDs in an order more productive for reviewing candidate software.
  4. Work with your company's business process managers and operational executives to review and approve the HLDs.

2. Test ERP Long-list ability to support key functionality:

This first review of the candidate ERP is called the ERP Introductory Event—which is an approximate 2.5 hour event to conduct a ‘first pass’ test of the candidate ERP against the HLDs. First we identify appropriate personnel at each candidate software vendor firm (or appropriately selected reseller firm) to discuss the SoftSelect selection process being conducted and then work with them to prepare for the ERP Introductory Event. Then your ERP selection team conducts the ERP Introductory Event with each ERP seller, and each selection team member provides a structured opinion, for each HLD, using standard scoring methods. Technical related screening factors may also be introduced in this step as needed.

3. ERP cost and terms control process:

We have extensive experience in controlling the cost and terms for purchasing access to ERP applications and other business software that augments ERP. This typically results in large improvements in cost and terms for our clients over what is otherwise arranged when buyers are unaware of their options. This process is composed of the following major steps and is the same whether one is accessing ERP via subscription or owned licenses:

  1. Develop ERP access cost and terms objectives: In this step, we will work with your team to:
    • Define ERP in terms of (1) different User Types, (2) business  process areas to be supported, (3) Device access, and (4) geography of application users—for functional objectives within the ERP functionality boundary and other satellite business applications in project scope.
    • Establish ERP access cost objectives for the license types and business process areas included from the prior step leveraging EAI knowledge on highly favorable ERP subscription or owned licenses. These amounts are typically 40 to 50% lower than the normal discounted pricing, and are achievable and fair for the sellers. Ongoing ERP access cost objectives are also developed which is where the biggest cost savings can be realized.
    • Discuss techniques to achieve better (and faster) results with the ERP sellers. This includes (1) discussing typical tactics or arguments you may hear and how to handle them, and (2) strategies for negotiating with an ERP vendor that presumes they have the deal won. This coaching intends to build resilience and confidence for the selection team and executive sponsors in this high-stakes game of ERP cost and terms control.
  2. Present ERP access cost objectives to the candidate ERP vendors (typically the Long-list): This step is composed of:
    • Establishing appropriate vendor points-of-contact and brief them on the ERP access cost and terms objectives to determine vendor questions and concerns.
    • Gaining the ERP vendor points-of-contact’s acknowledgement that they generally understand the ERP access cost objectives and explain our approach is to orchestrate a competitive selection and they can react to these ERP access cost objectives as they believe is in their self-interest. This does not put any specific demand on the sellers but instead keeps them flexible to adapt at a point in the selection in which their self-interest and willingness to negotiate is typically the strongest.
    • Explaining how the ERP cost and terms discussions/negotiations will occur with the finalist candidate ERP vendors.
  3. Processing ERP vendor replies and reaching the buyer-centric purchase arrangement: This step is typically conducted in phase-3 on the final two candidate ERP It’s an iterative process that requires varying amounts of calendar time and consulting time based on the culture and attitude of the finalist ERP vendors, and to a lesser degree, factors to do with your company. Based on these factors it’s not practical to accurately predict the time required to complete purchase negotiations of immediate and ongoing ERP access costs and terms. However, this proposal includes consulting time intended to complete the ERP access cost and terms negotiations. If more time is needed for this activity, it can be identified and discussed when it’s detected. Usually at this time in negotiations, the cost of extra consulting time is easy to tie to relatively large improvements to the ERP access purchase arrangement. Key aspects of this step are:
    • Work with finalist candidate ERP vendors to understand how they breakdown their ERP (user types and software modules/parts/add-ons) and align this to the ERP access objectives developed in an early project step).
    • After a vendor’s offering has been aligned with your company's ERP business process support objectives, then (and only then) discuss (1) proposed ERP access pricing and terms in the context of the objectives set forth in an earlier project step.
    • Take possession of the finalist ERP seller’s contracts for ERP access (agreements for licenses/maintenance or subscriptions). Then mark up these documents with SoftSelect’s established commercial terms favorable for buyers and negotiate strongly on the buyer’s behalf.
    • As needed, interact with the candidate vendors to improve the vendor’s offer.

4. ERP Short-list development from all Discovery :

Develop two finalist ERP from quantitative and qualitative results of the software vendor HLD reviews and other screening factors to do with (1) strength of ERP systemic tools, (2) projected software costs, (3) known or presumed status of ERP access contracts, (4) status of implementation offer to do with talent of team, terms and rates, and (5) ERP technical layer status, and other potential factors.

5. ERP Short-list discussion with company team:

The results of phase-2 are presented to client management and other interested company members and advisors. This step is designed to build high confidence in the ERP Short-list. This type and level of confidence is valuable through the remaining selection process and eventual implementation.

Phase 3: ERP Short-List to Software Selection

1. Plan and conduct ERP application demonstrations:

Develop an ERP application demonstration plan, coordinate with candidate ERP vendors/representatives, and lead full-day ERP product demonstrations. Based on the bulk of functions needing to be demonstrated and the level of all participants interests in various functional areas, there may be additional focused demonstration events. These are usually done after the full demonstration, take one or two hours each, and are delivered remotely.  Experienced leadership during the full-day demonstrations will help keep the event focused, consistent, and relevant, improving the experience of your team and the confidence in the results. 

2. Implementation services review and cost control planning:

Typically at this point in the selection process, the finalist ERP offerings are from relatively strong software vendors that have mature implementation service options. Based on this, it has been our experience that the most relevant differentiating factors for a candidate implementation service provider are (1) the talent of the proposed key business process analyst who also should serve as the operational project manager (in our terms, the Anchor Consultant), (2) the hourly rates for various team members and (3) the willingness to provide solid commercial relationship terms to the buyer. EAI-SoftSelect has a list of relationship control objectives for implementation contracts that we arrange with candidate implementers significantly as a condition to being selected as the implementer.

The total cost estimate for services and statements about methodology are usually not that relevant in selecting an implementer. The implementers simply do not know with any precision what a prospect needs and project obstacles they will encounter and therefore service proposals are developed to win business and not scare off prospects—in other words full of wishful thinking. For the leading vendors, methodology is nearly the same, despite the marketing language and bold statements used to suggest otherwise.

3. Reference checks - for finalist ERP and implementers

Carefully designed conditional or specific reference checks can be conducted to gain other useful input. Each selection project has a different list of outstanding questions at this point—for which a reference could be useful.

4. Evaluate ERP software and implementer findings:

Develop the ERP selection recommendation based on results of the (1) ERP application functionality demonstrations, (2) strength of ERP tools for development, workflows, metrics, and integrations, (3) software access costs (initially and ongoing), (4) status of commercial terms for ERP access and services, (5) status of implementation offer to do with talent of team, terms and rates, (6) ERP technical layer status, and other potential factors.

5. Final selection recommendation to executives:

The selection team makes a final ERP recommendation to executives/owners and other appropriate company members. As in the phase-2 debriefing and discussion, this process step is designed to build high confidence in the selected ERP application and implementer and contribute to overall project confidence in the pending implementation.

Join Us! – “Just the Facts”

ERP Selection Process Webinar