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 priorities that drive the selection of ERP.

3. Business process area discovery:

Determining key ERP selection functional criteria is the primary purpose of the business process area interviews. Other benefits of these interviews are (1) increased awareness and confidence about the ERP improvement project for those involved in the interviews 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.

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 likely support. This question needs to be answered to enable a concise review of ERP and purchase appropriate ERP access (see simplified sample here). 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 increases to initial and ongoing costs. In this step, we:

  • Establish the Enterprise Software Strategy diagram which models all major applications and any minor applications which have 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 ERP footprint for a company of the size and type as the company buying ERP.  The diagram includes reasons why various boundary business processes are contemplated to be fully or partially in or out of the estimated ERP scope.
  • Develop an initial enterprise application integration plan which can influence the estimated boundary for ERP, affect application development decisions especially for applications at the estimated boundary, and impact the approach for negotiating ERP access rights.

5. ERP software Long-list development and discussion:

This process step uses (1) EAI-SoftSelect business software research and (2) the EAI-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 the company buying ERP, (2) if the ERP vendor has a reasonable track record for how it treats customers, and (3) whether or not 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 appropriate confidence in the final Long-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 process to locate one or more appropriate resellers based on screening factors shown in the sample matrix directly below.

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. These functional objectives intend to have attributes of high-value, are non-routine for the class of ERP being reviewed, and reside within the ERP scope or boundary. 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 top-level HLDs, each of which will hold many details.
  2. Review and tune standard EAI-SoftSelect HLDs (typically about 5) which address standard ERP tools for developing new functionality, workflows, metrics, and integration utilities that should be present in a modernized ERP.
  3. Work with company 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—an approximate 2.5 hour event to conduct a ‘first pass’ test of the candidate ERP’s ability to deliver on the HLDs. Specific steps are:

  1. Identify appropriate personnel at each candidate software vendor firm (or appropriately selected reseller firm) to discuss the EAI-SoftSelect selection process being conducted by the company seeking ERP.
  2. Deliver the HLDs and work with ERP sellers to prepare for the ERP Introductory Event.
  3. The company’s ERP selection team conducts the ERP Introductory Event with each ERP seller, and selection team members score the events using standard scoring methods.
  4. Review results of the ERP Introductory Event, glean the more accurate opinions (from all team members), and develop an ERP performance score for each candidate ERP. This is entered into the full ERP evaluation matrix that is presented to the team in a subsequent step.

3. ERP cost and terms control process:

The EAI-SoftSelect team has extensive experience in controlling the cost and commercial terms for purchasing access to ERP applications and other business software that augments ERP. This typically results in large improvements in cost and commercial terms for our clients versus what is otherwise arranged when buyers don’t have experienced and resolved help to reach top-level results. Processing objectives for ERP access costs and commercial terms are combined as these two areas of activity are so intertwined. 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 for the company in terms of (1) different User Types, (2) business process areas to be supported (within ERP boundary or approved satellite business applications), (3) device access, and (4) geography of application users.
    • Establish ERP access cost objectives for the license types and business process areas included from the prior step, leveraging EAI-SoftSelect knowledge on highly favorable costs for an ERP subscription or owned licenses. These amounts are typically about half of the normal discounted pricing and are fair for the sellers. Additionally, ongoing ERP access cost control objectives are 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 buyers may hear and how to handle them, and (2) strategies for negotiating with an ERP sale team that may 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: This step is only a high-level briefing on structural objectives for ERP access cost control with a deliberate and important intent to not discuss actual access costs at this time. This step is comprised of:
    • Establishing appropriate vendor points-of-contact (typically the Long-list). Then brief them on the structural objectives for ERP access cost control. Further explain this approach is to orchestrate a competitive selection, and in this light all ERP sellers can react to these ERP access cost and terms 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 later point in the selection in which their self-interest and willingness to negotiate is typically the strongest.
    • Gaining acknowledgement from ERP vendor points-of-contact that they generally understand the ERP access cost objectives. This on-the-record acknowledgement can be useful in later ERP access cost discussions.
  3. ERP vendor interaction toward reaching objective ERP cost and terms: This step is typically conducted on the final two candidate ERP vendors during phase-3. It’s an iterative process that requires varying amounts of calendar and consulting times based on the culture and attitude of the finalist ERP vendors and to a lesser degree, factors related to the company’s selection project. Key aspects of this step are:
    • ERP architecture: Work with finalist candidate ERP vendors to understand how they architect access rights to their ERP (user types, software modules/parts/add-ons, etc.).
    • Alignment to the company’s ERP need: Once the architectures are known for the finalist ERP the selection team can reasonably align the ERP needs of the company to each particular seller’s offer. The intended result is confidence in knowing what ERP access rights (modules, user types, etc.) are needed, something which must be reasonably known before any ERP vendor pricing offer can be assessed.
    • ERP pricing offers: Accept initial ERP vendor pricing in the context of (1) previously presented ERP access cost objectives (developed in step 3a above) and (2) understanding the candidate ERP architectures and what ERP access rights are needed. Pricing should include proposed costs for initially estimated ERP access, contemplated future ERP access for a number of years, and cost escalation control objectives. These cost offers almost always need to be improved, and the process for doing so is described later in this list.
    • Commercial terms: Take possession of the finalist ERP sellers’ contracts for ERP access (various documents containing commercial terms for ERP access subscriptions or owned licenses/maintenance), then review and mark-up these documents with items needing to be fixed or added. The EAI-SoftSelect’s checklist of commercial terms to seek to achieve and remove is very important for this activity.
    • Achieving the final terms and costs: After the prior steps in this list are complete there is a period of discussions in which material improvements are pursued on ERP access costs and commercial terms. If, as is often the case, in the final stages there is a presumed selection choice, the detailed cost and contract review may substantially be done on this favored ERP—although it is intended to never directly expose the ERP product is favored. The other finalist should be somewhat kept-up in processing their cost and terms as: (1) there needs to be the specter of competition, and (2) often the presumed winner will attempt to make last-minute changes to prior representations on ERP access cost and terms that creates a need to refocus on the other finalist ERP seller.
  4. ERP Managed Service Provider (MSP): If remotely accessed ERP hosting is required by the buyer and the ERP is offered in arrangements other than ERP seller controlled multi-tenant subscription, then we search for one or more entities that provide turnkey management and hosting for the particular ERP.  Steps are:
    • Identify candidate hosting entities
    • Conduct review of offering per the buying company’s ERP project criteria
    • Review initial costs plans and design cost escalation terms
    • Review standard commercial terms and identify adjustments needed
    • Finalize choice of hosting entity - including arranging objectives on cost and terms (typically 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 an ERP application demonstration plan, coordinate with and prepare the candidate ERP representatives, and lead the detailed ERP product demonstrations. Experienced leadership during the detailed demonstrations will help keep the event focused, consistent and relevant, improving the experience of your team and confidence in the results.

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 main demonstration event and are typically delivered remotely. 

2. Implementation services review and cost control planning:

The most relevant differentiating factors for a candidate implementation service provider are (1) the talent of the proposed one or more business process analyst who oversee strategic and enterprise business process design (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 uses its checklist of important commercial terms objectives to achieve and uses this list in the review and mark-up of the ERP implementer services agreement and other documents containing commercial terms.

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 or what project obstacles they may encounter. Therefore, service proposals are significantly developed to win business and not scare off prospects—in other words full of generalized methodology and 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

Reference checks with specific focus can be conducted to gain potentially useful input. Usually this focus has to do with items such as (1) ERP hosting stability (application speed and downtime), (2) implementation services culture and agility, (3) key implementation personnel being offered, and (4) stability of the commercial relationship with the ERP vendor over time. In reference calls there is care in processing reference’s point of view on the ERP’s problems or apparent limitations—as anything negative could be fully or somewhat the fault of the ERP user.

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. As in the phase-2 debriefing and discussion, this process step is designed to build high confidence in the ERP application and implementer, and contribute to overall project confidence in the pending implementation.

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