True or False: There are few projects more risky but full of opportunity than selecting and implementing a new ERP system.
True! Choosing and implementing a new ERP system is likely one of the most important decisions a manufacturing company will make for a decade or more - with the selection of an ERP Implementation Partner being one critical task. Here are the top five things you absolutely need to consider in selecting an implementation partner.
TIP 1: Talent and Depth of Key Consultant.
For more small to mid-sized company ERP projects there should be one key implementer staff person that is the key analyst. The consultant who understands the big picture at your company while working on project details. This key consultant should know your industry and high-value processes well. They should have many ERP projects, in which they were a project lead, under their belt. They should be knowledgable in the ERP configuration tools and creative. Key consultants possessing these traits are difficult to find, and keep, but they exist and can make a big difference if they are properly supported by the ERP buyer.
TIP 2: Favorable Consultant Rates.
Consultant 'list price' rates can be negotiated to a lower level - Lead or functional consultants by 15 to 20% and consultants doing system development and report writing by 50% or more. Further, these rates can be fixed for a year or more, for the purpose to get the buyer through the implementation. Finally, never accept 'blended rates' as these tend to create unfortunate pressures to put lower quality people on a project.
TIP 3: Commercial Terms with Teeth.
It's no surprise the commercial terms developed by the ERP implementers favor the implementer. This needs to be fixed in a complex commercial relationship in which there will be disagreements and the buyer needs appropriate options to properly protect their interests. Key areas to fix are details for maintaining key implementer personnel, no obstacles for fast termination, and work product control.
TIP 4: Agile Project Management - Not Classic Project Management
ERP implementation projects are not well executed with a classic project management structure - like one would see in a construction project. The implementer should understand this and be familiar with the concept of Agile project management techniques.
TIP 5: Second Opinion - Have Other Subject Matter Experts Ready
Even a well-selected and managed implementer will make suggestions that are not optimal, or even correct. It is helpful to have a second opinion on major decisions and any quotes to further develop the ERP. The implementer should never find this a problem and presence of such expertise will usually help the key implementer be more precise in suggestions.
These five key tips are greatly expanded upon in a one-day ERP project workshop offered by Catalyst Connection. This education is presented by our partner Mark Engleman, a national ERP project expert - and is based on the learning of over 900 projects since 1996. This event, being held on Thursday, August 24th, will address topics such as ERP selections, ERP implementation planning, and enterprise software strategy planning. Click here to learn more and register.
Based in Pittsburgh, Catalyst Connection is an economic development organization dedicated to helping small manufacturers to improve their competitive performance. Catalyst advisors, consultants, and instructors offer training, consulting and administer financial programs that can provide funding for equipment, machinery, or capital improvements. As a nonprofit 501 (c)3 firm, the organization has been supporting Southwestern Pennsylvania manufacturers for more than 25 years. For more information call 1-888-887-7472 or go to www.catalystconnection.org.