Who makes the decision to choose an ERP System - the IT Department or the Finance Department? How do you ensure the correct system is purchased that best suits the individual organisation?
The chance of failure in an Enterprise Resource Planning (ERP) implementation increases significantly in a company if the selection decision has been made without the full participation of all departments within the business.
Unfortunately, it is not unusual to find that the decision on which ERP system to purchase is made by one individual or by one department within the company. This is wrong for two major reasons:
- Users in one department usually do not have sufficient knowledge of the process intricacies in another department. True requirements can only be gleaned from information system users who are accessing the system on a day to day basis.
- Because of the way they evolved, many ERP systems do not have equal levels of functionality across all processes. For example, some started out as financial systems and subsequently added other modules such as manufacturing. Often, such add-ons do not have the same depth of functionality as the originals, at least not for the first few versions. Similarly, other systems started out as shop floor information systems before evolving into ERP systems with manufacturing and financial capabilities. There are further examples of Warehouse Management Systems (WMS) taking on orders-to-cash and purchase-to-pay modules and even more recent examples of complaint management systems evolving into customer relationship management (CRM) systems with order processing capability.
The key point is that ERP systems are certainly not equal and companies in the same industry are not exactly the same when examined to the required level of detail. The main focus of a system selection is to get a system within budget that best suits the individual organisation (i.e. a best fit). Full participation by all functions (e.g. Finance, Sales, Purchasing, Materials, etc.) in the requirements elicitation process, the preparation of the invitation to tender (ITT) and the assessment of vendor demonstrations will ensure that the ‘pernickety’ issues are addressed. The company will then be able to select the system that is the “best fit” for the business.
This Opinion was written by Martin Commins, Senior IS Consultant at BSM. If you would like further information on Cross-Functional Involvement in ERP System Selection please send an e-mail to Martin Commins.
Martin Commins will respond to your query.