ERP Selection: What you need to Consider

ERP - Publications By: Dr. Harald Dreher - Mar 30, 2021

Profitieren Sie von 3 Jahrzehnten Erfahrung in IT-Strategie, Digitalisierung, ERP-Beratung und Prozessoptimierung.


One of the most important points of any digital transformation is the time when you have to decide to replace your old ERP system and make a new ERP selection.

An ERP selection is like finding the right path to climb a peak. The right path is a crucial factor for success.

ERP Selection start


One of the most important points of any digital transformation is the time when you have to decide to replace your old ERP system and make a new ERP selection.

An ERP selection is like finding the right path to climb a peak. The right path is a crucial factor for success.


What You Need to Consider Before Selecting an ERP

During an ERP software selection, you have the opportunity to examine systems and I.T. architectures that were not previously available. Above all, it is crucial to look at ERP systems that have the potential to firstly optimise business processes and secondly realise future requirements.
Of course, an ERP selection is associated with the requirement that system discontinuities should be avoided, that information should be consolidated and possibly even kept in a single system, but these requirements are only part of the whole.
The keyword future requirements is crucial, as it must be assumed that the ERP selection will bind your company to this ERP system for the next 6 to 10 years. Above all, the requirements of the market, i.e. their existing and future customers, their own corporate strategy and technical progress in the context of IoT, Industry 4.0, Augmented Reality (AR) or even Artificial Intelligence (AI) must be taken into account.

This dynamic of technological progress and the constant confrontation with innovation and the support of I.T. requires dedicated planning in the ERP selection.


To Increase the Chances of a Successful ERP Implementation Consider the Following 6 Points:


1. Review the Scope and Schedule of Your ERP Project and ERP Purchasing

At some point in the evaluation process you will come to a point where the ERP selection is coming to an end and the software favourite has been decided. It is then extremely important to look very carefully at what you are going to buy. Too often companies buy software that turns out to be different during the implementation and then in use and operation than was shown during the presentations and demos. Make sure you order and buy the right modules, extensions and most importantly the right licence modules. This is especially true for licence types ranging from full user to simple information reader. These classifications significantly determine the price for the purchase as well as - which is always underestimated - the costs for maintenance during operation. This also applies to the dates of partial payments for software use. Here, too, there are many design options so that not all licence expenses are already incurred at the beginning of the introduction.


2. Determine the Resources and Skills Available to You in Your Project Team Before the Project Starts

As a rule, the software house and implementation partner will try to realise the project as quickly as possible. This is in their interest, as it allows the software house to realise more projects. From our experience, we advise planning that takes into account a rather cautious, i.e. rather longer period of time, because we often find that the resources intended for the project work are not available to the extent planned. It happens time and again that the scope for project management and coordination is massively underestimated by the implementing company. Therefore, define the roles and responsibilities as well as the time available realistically. In case of doubt, it is better to plan a little more time than too little or to use external resources if the know-how for project leadership or project management is too limited.


3. Create a Complete Implementation Plan (Project Plan) with Resource Availabilities.

After the ERP selection, the implementation usually takes place quite quickly. However, implementation requires a clear focus, enormous initial planning effort and agreements with all parties involved as to when what should and can be delivered, installed and tested. This goes far beyond what a system integrator, or a software vendor can do. Of course, software suppliers also try to charge for a few days of project management. But those who have carried out several projects are hardly impressed by this service, since the company introducing the software has to bear the main burden of coordination.

Therefore, it is crucial to develop a plan that goes far beyond the ERP vendor's offer. Among other things, this includes areas for which the ERP software partner has no responsibility. Business process optimisation, organisational change, change management and programme management, for example, are among them. Make sure that if you do not have your own capacities or skills, that independent, external ERP consultants support you to plan and implement a sophisticated implementation strategy. It is certainly more efficient than trying to straighten out a project that is in trouble.


4. Create a Project Plan with a Critical Path

In many cases, ERP implementations take longer than planned. Often, however, these delays are not caused by technical or software problems. This can happen even after the ERP software has been configured and tested by the users. We experience that it is other influences that make a project difficult: Delays related to users, insufficient training on the system, data quality and many more. Therefore, it is important for the project manager to focus on critical path activities at a very early stage than on software configuration.


5. Create a Risk Register and Make the Discussion of Risks the Content of Regular Meetings

Start creating a risk register before or parallel to the project planning. This cadastre should list all the risks you know about and those that may occur and evaluate them with a probability of occurrence. Define actions in case a risk occurs so that you are able to act immediately. To give an example: we experience again and again that topics in the context of data migration, the data quality of the previous master data, the effort to transfer transaction data to the real live date, is wrongly estimated. As a result, go live dates become critical or the entire project is delayed. We therefore strongly recommend listing the risks and defining "what if" plans.


6. Define a Clear Project Structure and its Implementation with Milestones and Acceptances

Make sure you set the right targets with your project management and the right milestones for acceptance of partial deliverables. Make sure that you present everything that is important for the success of the project in your project communication. Make sure that everything can be addressed openly in the steering committee meetings. We experience time and again that our client's employees do not communicate problems or difficulties, or communicate them more reservedly than independent ERP consultants. This is precisely why we recommend discussing the risk register in project manager meetings. A formalised meeting agenda, project controlling and discussing the risk register is the best way to ensure success.


Summary & Conclusion ...

Considering that most companies have a period of ten or more years between major system upgrades or new ERP purchases, ERP selection and implementation is usually not a core competency. Recognising this is not a weakness of the company, but a strength of the leadership. Therefore, it is important that you clarify whether you can realise an ERP selection and its subsequent implementation without buying in external experts and ERP consultants. Decisive for your process model can also be the question, do you want to leave the project management to the software supplier (i.e. let him manage himself) or do you look for an ERP consultant who is able to demand the maximum performance from the software partner for the benefit of your company.

If you consider these points, you have already realised part of the way for an ERP selection and nothing stands in the way of implementation.



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We hope you find this publication useful. If you have any further questions on this topic, we look forward to hearing from you." - Dr Harald Dreher