Dynamics 365 Business Central

General, Ideas

Why a company needs a “ERP Purchase expert”? and how this can create more troubles that it solves if the expert doesn´t have a real experience.

When a company realize that they need a new software solution for their process and needs, usually comes with a lot of doubts.

  • Which one?
  • Which vendor?
  • When we need to go live?
  • Who came with the idea?
  • How much money?
  • Is there anyone in the company who knows someone in other company to ask their experience?
  • And so on….

but the real questions need to be:

  • Why we need a new solution?
  • Which one is the real reason?
  • Are we losing market share?
  • Did our costs rise?
  • Are we getting less benefits?
  • We need a better solution because……

When someone wants a new software for a company, this needs to be a strategic decision and we need to consider many things besides the cost, or the brand.

  • Why we need a new solution?
  • Are you a growing company? Why are you growing? Can you explain why?
  • We need to check this information because we need to verify if the ERP can support the reason, maybe is because we are opening more offices or stores in the country.

This means multilocation support, warehouses, transfers, multiple salespersons. Are you going with an on premise or cloud ERP?

Are you a startup company?

Then your needs are different because you are creating your business model so you can take more of the standard functionality and get a more standard implementation but, can the software grow at the same speed than your company? Can the software be modified or extended to your needs, actual and future?

Is important that you conduct an internal investigation about the actual problems, which processes needs to be challenged? Or changed?

When you hire a “ERP Purchase Expert” you need that these expert talk with your people, understand your processes, learn to be part of your company, and look for the pain points from a new perspective with no preconceptions.

Is important that the software selection consultants not only rely in the classical questions about which interfaces you have with which programs, they need to ask why that interface needs to be maintained instead of changing it. The consultant needs to be more than a secretary who takes dictation to put it in a template downloaded from an internet site and add a standard qualification table that does not any added value but looks great and professional in paper.

In my job I receive request for proposal or requests for quote documents and when you open de files, you look similarities between those documents, the qualification schema, the same questions about tech data and questions about integration with in-house developed system without no more information besides the name.

As an example:

Reconciliation of transactions with Fancy name systems

Fancy Name 1

Fancy Name 2

Fancy Name 3

Credit Card Providers (wonder name 1 and my own credit service).

That’s all information related with the requirement, no technology hint, which database, what the fancy name X service do, anything.

If the selection consultant is aware of the new technologies, he or she doesn’t need to send the next questions:

“Provide a locking mechanism, to prevent multiple users from making updates at the same time on the same record” or “The system must notify users when the record (s) they want to modify are blocked.”

The modern systems work with Hana, SQL Azure or Oracle, not Access, Paradox or Foxpro.

Also, they don’t need to ask if the system has some kind of backup process or strategy, they need to know that, that’s why they are “consultants”.

The consultants need to focus on the processes, as an example, the company import goods from other countries, how do the company do that?

Send purchase order to the vendor? Which INCOTERMS is used? The same INCOTERMS always?

Did you receive the items in transit? This means that the accountant wants to track the items cost in the ERP because he has the vendor invoice, even if the items are in the ship container as a purchase provision.

When you receive the items in the country entry port, are you paying the full taxes? Or you have a fiscal deposit strategy to delay the tax payment until you need the goods for sales?

Did you want to track the landed costs by import, by container?

Which import taxes did you need to cover to comply with the local laws?

When the consultant has the information, he needs to write the process in a comprehensible way for the user and after the internal selection team (yes, you need one team) validates the processes or questions, send this information to the ERP Vendor instead a boilerplate requirements document. Remember your “ERP selection consultant“ is charging you a lot of money, you and your company are worth what you pay.

Talking about the selection team, you need to select some people in your organization to give some direction to the request and selection. You always need an accountant, to be sure that the selected ERP meets the local laws, if you sell goods or services, someone from sales, with actual experience in your actual problems, same applies for production, warehouse and other areas. Select your people based on their experience and competence, not the hierarchical level.

Don’t focus on the company actual software, take the next step, and focus on your processes and how they can or need to be improved. Aim high but not ask for Cortana or HAL9000.

You also need to select which is your technological future path, are you going to stay on premise? Or you want to taste the cloud? Are you looking for a subscription solution? Or the ancient model (buy your licenses)?

Check the access method too, do you need a specific specs for the computer? Specific operating system or equipment? Or go for a totally independent platform software?

Put your selection consultant to work and ask him to give a talk to the people on your organization about “what is an ERP”, if the consultant has helped another company before, ask him for an interview with their previous clients and their satisfaction about the ERP selected.

When the previous points are covered, you need to target which ERP can you use, there is an ERP classification:

Tier 1: Software systems that can run the entire business, including CRM, Accounting, Human Resources, Payroll, Manufacturing, Supply Chain Management, etc.

Tier 2: ERP that can run a large component of a business, but not usually robust enough to include components like Human Resources and Payroll

Tier 3: ERP that is less robust than Tier 2, and while it may run several parts of the business, like CRM, Accounting and Inventory, it may not offer other key business functionality like Manufacturing.

Tier 4: Entry-level software that runs one area of the business and is low-cost to acquire and implement.  Appropriate for automating processes for a new activity that does not rely on integrations to other major business systems.

Remember tier 1 is more expensive than tier 2 and so on.

Check the vendor answers, not only by total numbers, if a vendor writes notes or comments, analyze them, sometimes you get a better insight of the proposed solution and take notes for the demo sessions.

Ask for demo sessions, not only one, ask for 3 or 4, try to send demo scripts, receive questions from vendors, allow them to be prepared, don’t play with the usual “we have a question session only and if you don’t ask in that session you cannot do it later”, let them surprise you with their knowledge and the software, the argument of “everybody needs to have the same information, that’s why we don’t accept more questions” is stupid, if one vendor asks form more information or some clarification, is because they are interested in you and your process, it is up to you to send the question and the answers to the other vendors.

A personal note here, when I have enough information for the customer, items, processes, a list of doubts, I personally focus on those points, but I like to have “unguided” demo sessions, I like to receive questions, to interact with the people, not just follow a script, it´s more fun and helps the users to get a more meaningful approach with the solution.

Keep track of the demo sessions, view the videos again (remember to record sessions), talk with the selection team, ask their opinion about the process coverage, ease of use, adherence to company needs.

Look which software and which methodology match better with the company philosophy, if you have chance, look for a change readiness analysis. A good “ERP selection consultant” will help you and guide you to get these tools.

Once you have selected the possible options, then start the process of negotiating prices, dates, scope, you should not leave aside any requirement defined as “Highly Required” for the company, maybe you can send the “nice to have” to a second phase to maintain lower costs but, remember, an ERP solution is expensive, is not a toy, you need to invest and anyway, you have hired an expert to help you choose so you can’t think it will be cheap.

Finally, if your “ERP Selection Expert” does not cover or help as indicated, or uses templates or does not have the possibility of showing a case of success of his own, not the ERP, then better not get in trouble or expenses and do it yourself

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