Download Selecting an ERP System

Selecting an ERP System
The good the bad and the ugly!
Local Vendors
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Less cost
Faster response
Market knowledge
Accessible
Cannot hide or
disappear!
Here to establish a
market
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No ‘wow’ factor!
Too small
Little or no marketing
No or few packaged
solutions
Low self esteem
Foreign Vendors
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Large size
 Packaged software
 Can be Experienced
 Can allocate resources
to project
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High cost
No local support
Can hide or run away
Customisation woes
Here to make a quick
buck?!
Difficult to assess
No local market
knowledge
Typical Foreign Vendor
100 Employees or more!
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15 Management and secretarial
10 Sales
70 Support
5 developers, 1-2 experienced, 3-4 rookies!
HIGH developer turnover!
Typical Local Vendor
15 Employees or more!
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5 Management and secretarial
2 Sales
7 Support
1-2 developers
Developer turnover! Leaving developers set up own
business! Initially offer good service/support until
they become a typical local vendor. Cycle repeats!
Reality!
Local
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Many times
inexperienced
 Can also run and hide.
Many times they do!
 Many times expensive
Foreign
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Many times
inexperienced
 Can run and hide
 Always expensive
Let’s bind them with a contract!
•3 out of the 4 Cypriot companies who bought
from the largest ERP vendor in the world are
in court with them!
•The fourth was convinced that everything is
OK. Nevertheless, they don’t ask for any
support or customisations as they cost too
much. They now use Excel to produce many
of their reports!
TCO – What they tell you!
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Application Price
 Customisation
 Implementation (whatever this is!)
 Training
TCO – What they don’t say!
Customisation
Write the application!
Implementation
Fix all bugs of customisation
Training
You just pay for this! No time to do it.
We are still implementing…
The training that should be!
Support
Infrastructure
Maintenance
Expensive licenses, telecomm lines,
Royalties, hourly fees, hardware, more
hardware, more software packages…
You pay for it but you don’t know
what it covers!
The big question
What do we do?!
Ask yourself!
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Do we really need it?
 Are we ready for it?
 Do we understand our business needs?
 Are there any other alternatives?
Ask others who did it!
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Are they happy with it?
 What was the real cost?
 How long did it take?
 Would they do it again?
 Can they account for the cost savings?
 In general, ask around about the vendors.
Cyprus is a small place!
Check the vendors
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Other installations at similar companies?
Can you visit these other sites?
Check to see if they understand your business
processes
Do they have a sense of proportion? (e.g. did they
ask you what your turnover is, etc.?)
Ask how long it will take. Usually it does take
long!
If you sign
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Break the project into small pieces with
well defined boundaries
 Pay only for work delivered so far
 Keep money for one year or so as warranty
 Make sure management is actively involved
and follows the project closely
 Pay attention to training
Keep in mind
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It does take a long time to decide.
It takes much longer to implement!
Don’t be impressed by buzzwords/tech talk. They
usually mean nothing. For sure they will not make
the project work by themselves!
Before calling anybody, call your
accountant/business consultant. Evaluate your
processes for bottlenecks etc. If you don’t know
what you need, who does?
Have your requirements clearly laid out and
written in a small document. It will help the
company immensely.
Conclusions
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Do your homework well in advance. Evaluate and
re-evaluate the company’s management model
Set a reasonable budget
Develop a firm set of company
procedures/processes. An IT solution is only as
good as the processes it automates
Set up a firm set of specs/requirements
Negotiate a total, firm cost in advance
Keep in mind: They prey, you pray!