ERP Software Selection: Getting It Right

Finding, configuring and implementing best-fit enterprise software requires a methodical approach that starts with custom vs. packaged evaluations and includes a searching assessment of organizational needs, vendor strengths and weaknesses and competitor strategies. Executive Summary Manufacturing organizations embark upon enterprise system implementation or development programs for multiple reasons. The primary motivations include: • Business transformation: Top management decides to undertake a program to significantly raise the top line or bottom line. • Business process harmonization: Similar to a business transformation exercise but at a scale where the objective is to generate process benefits and harmonize activities across the organization. • Technology upgrade/replacement of legacy system: Initiated by the IT organization to replace an end-of-life product or service with similar functionality and reduce application management costs (AMC) and total cost of ownership (TCO). The primary question that decision makers often face is whether to develop a custom solution or implement a packaged solution. While there are complex and unique business scenarios that merit the development of custom solutions, most organizations will benefit from a packaged enterprise systems solution for various reasons: • Shorter implementation timelines. • The opportunity to adopt industry best practices. • Packaged ERP solutions are well proven and stable. • Better systems documentation. • Established upgrade roadmap. • Easier and cheaper to maintain. • Availability of skilled resources. However, ERP package selection is a complicated exercise. There is a myriad of ERP application packages available in the market with a range of deployment options. Moreover, most ERP packages claim to offer comprehensive, but similar, functionality. The objective of this paper is to outline key issues faced by organizations selecting ERP packages and present a set of guiding principles that increase the odds of a successful implementation. Selecting an inappropriate ERP package can result in a plethora of problems. An ERP system that is not a right fit tends to weigh down the entire organization. There is the tendency on the part of people to generate alternative manual approaches and work around ERP system ineffi