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 personnel resources and commitment will be needed.  Based on the experience of more than 1000 projects, we’ve continually enhanced our methods to help our team and clients better prepare for the enterprise software project. These few hours of meetings, presentations, and team discussion intend to significantly contribute to project continuity, momentum, and quality.

2. Strategic and global influences discovery :

For the reasonably foreseeable future, the company is discussed in the context of enterprise strategy and how the company might change (e.g. new product lines, new locations, and outsourcing manufacturing). These findings in turn may influence the ERP functionality priorities that drive the selection of ERP.

3. Business process area discovery:

The business process interviews are designed to identify essential ERP functional requirements, especially those that may present challenges for ERP candidates (i.e., non-routine needs). Additional benefits of these interviews include (1) enhancing participants’ understanding and confidence in the ERP improvement project, and (2) uncovering valuable insights—such as improvement ideas, existing challenges, and areas of uncertainty—that aid in preparing for and managing the implementation. Prior to the interviews, we provide training to business process representatives to help them prepare effectively.

4. Enterprise Software Strategy – Where ERP fits:

A company’s enterprise business application landscape and strategy will shape the processes that ERP should support, facilitating an efficient review of ERP candidates. When this application status is unclear, companies risk purchasing unsuitable software access, facing disappointment during implementation, and incurring higher initial and ongoing costs. In this step, we:

  • Establish the Enterprise Business Application Strategy Diagram: This diagram maps all major applications and any minor applications that interact with ERP-related business processes or metrics.

  • Define the ERP Boundary within the Strategy Diagram: Using insights from business process interviews and EAI-SoftSelect’s expertise in ERP functionality tailored to company size and type, we define the ERP boundary. The diagram also includes rationale for why certain boundary business processes are fully or partially included or excluded from the ERP scope.

  • Develop an Initial Enterprise Business Application Integration Plan: This plan helps refine the ERP boundary, guides application development decisions (especially for boundary applications), and informs the approach to negotiating ERP access rights.

6. Locate appropriate ERP resellers:

ERP candidates may be sold through resellers, depending on the attributes of the ERP buyer. These resellers are nearly always implementers of the ERP and that's their primary business focus. Accordingly, we conduct a process to identify one or more suitable resellers based on the following implementer selection criteria:

  • Relevant implementation experience in the buyer’s industry and company size.
  • An effective implementation consulting team with adequate resource availability and skills.
  • Reasonable consultant resource proximity to the ERP buyer to facilitate any necessary onsite presence.
  • Flexibility to work with buyers who seek firm control over the implementation process.

5. ERP software Long-list development and discussion:

This step leverages (1) EAI-SoftSelect’s business software research and (2) the team’s in-depth knowledge and insights into specific business software, vendors, and the current market.

Key factors for ERP listing include (1) the application’s track record in companies similar to our client, (2) the ERP vendor’s history of customer treatment, and (3) whether the ERP application is technically up to date.

We also conduct a structured review of any ERP software not included on our recommended list but of interest to your company.

A comprehensive briefing and discussion of the Long-list is provided, ensuring that your selection team and executives have the confidence needed in the final list.

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

1. Identify key ERP functionality objectives:

This list of ERP functionality objectives is created by analyzing the results of business process interviews to identify key functional requirements that are particularly important to the ERP buyer and are not considered routine for the ERP candidates under review. The ERP buyer’s team reviews and tunes this list before it is used to test the candidate ERP systems.

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

This test is conducted during the ERP Introductory Event, a 2.5-hour session designed as a “first pass” assessment of each candidate ERP’s ability to meet the buyer’s functional priorities (the HLDs). Key steps include:

  1. Presenters are carefully prepared to focus on the buyer’s priorities and maintain an appropriate pace.
  2. The company’s ERP selection team conducts the ERP Introductory Event with each ERP vendor, scoring each session using standardized methods.
  3. Results from the ERP Introductory Events are reviewed to determine the consensus of the selection team.
  4. Based on the team’s insights, an ERP functionality performance score is generated for each candidate ERP, which is then entered into a comprehensive ERP evaluation matrix to be reviewed in a later step.

3. ERP cost and terms control process:

The EAI-SoftSelect team has extensive experience in managing costs and negotiating favorable commercial terms for ERP and complementary business software. This expertise often results in significant immediate and long-term cost savings and improved terms for our clients—far better than typically achieved without skilled guidance. Cost and commercial objectives are addressed together, as these two aspects are closely connected. The process outlined below applies to both subscription-based and owned ERP licenses and includes the following key steps:

  1. Develop ERP Access Cost and Terms Objectives: In this step, we collaborate with your team to:
    • Define ERP requirements for the company, covering (1) different user types, (2) business process areas to be supported (within the ERP boundary or integrated satellite applications), (3) device access, and (4) geographic locations of users.
    • Set ERP access cost objectives for each license type and business process area, drawing on EAI-SoftSelect’s expertise in securing highly competitive ERP subscription or owned license pricing—typically about half of standard discounted rates, while remaining fair for vendors. We also establish ongoing ERP cost control objectives, which present significant potential for long-term savings.
    • Review techniques for achieving faster, better results with ERP vendors. This includes (1) discussing typical vendor tactics or arguments and effective responses, and (2) strategies for negotiating with ERP sales teams that may assume they have secured the deal. This coaching is designed to build resilience and confidence within the selection team and executive sponsors in the high-stakes arena of ERP cost and terms negotiation.
  2. Present ERP Access Cost Objectives to Candidate ERP Vendors: This step provides a high-level briefing on structural objectives for ERP access cost control without discussing actual costs at this stage. It includes:
    • Identifying appropriate vendor points-of-contact (usually at the Long-list stage) and briefing them on the structural goals for ERP access cost control. This approach is presented as part of a competitive selection process, allowing each ERP vendor to respond to these objectives in a way that aligns with their own interests. This flexible approach does not impose specific demands but allows vendors to adapt later in the selection process, when their willingness to negotiate usually is the strongest.
    • Securing acknowledgment from ERP vendor points-of-contact that they understand the ERP access cost objectives. This on-the-record acknowledgment may prove useful in later discussions around ERP access costs.
  3. ERP Vendor Interaction toward Achieving Targeted ERP Costs and Terms: This step is typically conducted with the final two ERP vendor candidates during phase-3. It is an iterative process requiring variable amounts of time based on the culture and approach of the finalist vendors, and, to a lesser extent, the specifics of the company’s selection project. Key aspects include:
    • ERP Architecture: Work with each finalist vendor to understand how they structure access rights to their ERP (user types, modules, parts, add-ons, etc.).
    • Alignment with Company ERP Needs: Once the architectures of each finalist ERP are clear, the selection team can align the company’s ERP access requirements to each vendor’s offering. This improves clarity on which ERP access rights (modules, user types, etc.) are needed, a critical understanding before assessing any ERP vendor pricing proposals.
    • ERP Pricing Offers: Review initial ERP vendor pricing in the context of (1) previously communicated ERP access cost objectives and (2) an understanding of each ERP architecture and required access rights. Offers should include costs for initial ERP access, projected future access over several years, and ERP access cost escalation approach. Initial pricing typically requires further negotiation.
    • Commercial Terms: Collect and review contracts from the finalist vendors regarding ERP access (both subscription and owned license/maintenance terms). Mark up these documents to highlight areas requiring clarification or adjustment. EAI-SoftSelect’s checklist of commercial terms is essential in guiding this review process.
    • Finalizing Terms and Costs: Following the previous steps, further discussions typically take place to achieve meaningful improvements in ERP access costs and commercial terms. At this stage—with two finalists—the buyer has maximum leverage to secure favorable terms and costs. However, skill and patience are crucial, as ERP vendors are highly experienced in negotiation tactics aimed at maintaining control over future revenue terms, in this commercial relationship that buyers cannot easily escape.
  4. ERP Managed Service Provider (MSP): If the buyer requires remotely accessed ERP hosting and options other than an ERP seller-controlled multi-tenant subscription are available, we search for one or more providers offering turnkey management and hosting for the specific ERP. Key steps include:
    • Identify Potential Hosting Providers
    • Evaluate Offerings based on the buying company’s ERP project criteria
    • Review Initial Cost Plans and establish terms for managing cost escalations
    • Examine Standard Commercial Terms and identify necessary adjustments
    • Finalize Hosting Provider Selection by aligning on cost and terms objectives (typically completed in phase 3)
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4. ERP Short-list development from all discovery:

Develop two finalist ERP from quantitative and qualitative results of the ERP application HLD reviews and other screening factors.

5. ERP Short-list discussion with company team:

The results of phase-2 are presented to the company management and other interested company members and advisors. This step is designed to build understanding and confidence in the ERP Short-list. This 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 a detailed ERP application demonstration plan that builds significantly on the earlier ERP Introductory Event functionality specification. Coordinate with the candidate ERP representatives, preparing them thoroughly, and lead the detailed ERP application demonstrations. Skilled leadership during these sessions will help ensure they stay focused, consistent, and relevant, enhancing your team’s experience and confidence in the results. Demonstrations can be conducted in person, typically within a one-day event, or over 4 to 5 remote sessions spread over several days.

Depending on the volume of functions to be demonstrated and participants' interest in specific areas, additional focused demonstration sessions may be scheduled. These follow-up events are generally delivered remotely after the main demonstration.

2. Implementation services review and cost control planning:

The most relevant factors in screening candidate implementation service providers are: (1) the skill and capacity of the proposed business process analyst(s) who oversee strategic and enterprise business process design (whom we refer to as the "Anchor Consultant"), (2) the hourly rates for various team members, and (3) the provider’s willingness to establish solid commercial terms for the buyer.

Regarding implementation costs, the total cost estimate for services from a candidate implementer are generally less relevant when selecting an implementer, aside from negotiable cost elements such as rates and travel time. Implementers simply cannot accurately predict a prospect’s precise needs or the mix of ever-present project challenges—which greatly affect potential project costs. As a result, service proposals are typically structured to attract business and minimize buyer concerns—often with inflated methodology claims and overly optimistic cost estimates. The actual implementation costs will largely depend on the factors mentioned in the first paragraph and the buyer’s ability to effectively lead the project.

For commercial terms, EAI-SoftSelect employs a detailed checklist of key objectives and uses this list to review and refine the ERP implementer’s service agreement and other documents defining commercial terms.

3. Reference checks for finalist ERP and implementers

Obtaining references on an ERP system’s functionality and usability is often of limited value, as these can be overly influenced by misunderstandings or implementation issues caused by the ERP customer. Additionally, functionality and usability questions should have been largely addressed during the ERP demonstrations conducted earlier in the selection project. However, references can still provide useful insights on topics such as: (1) ERP hosting stability, including application speed and downtime, and (2) the long-term stability of the commercial relationship with the ERP vendor.
For implementation services, references should focus on critical aspects. Asking directly if the implementation went well may not yield useful information, as performance issues are often influenced by the buyer and may go unnoticed by them. Instead, valuable insights can be gained from hearing other customers’ opinions on such topics as: (1) the culture and flexibility of the implementation services team and (2) the expertise and effectiveness of key implementation personnel being proposed for the project.

4. Evaluate ERP software and implementer findings:

The core project team develops 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) ERP software access costs (initial and ongoing), (4) status of commercial terms for ERP access and services, (5) status of implementation offer having to do with talent of team, terms and rates, and (6) ERP technical layer status, and other potential factors.

5. Final selection recommendation to executives:

The company’s selection team makes a final ERP recommendation to executives/owners and other appropriate company members. 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.