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E-mail: info@panorama-consulting.com
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10 STEPS TO GUIDE AN
ERP SOFTWARE SELECTION
©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved.
GUIDE TO

ERP SOFTWARE
SELECTION

Now that you have decided it is time to

invest in ERP software, it is time to make a
huge decision that will greatly impact the
success and growth of your business. Which
Enterprise Resource Planning (ERP) software
system should you opt to use?

It is a choice that requires tremendous

thought and effort. This may be one of the
most important business decisions you ever
make for your business. To simplify the
process and make the decision easier, the
following 10 steps will detail the best way to
select an ERP platform. With this guide you
can confidently obtain the best ERP for your
company.
 ERP SOFTWARE SELECTION

CONTENT
ASSESS YOUR BUSINESS - WHY YOU NEED AN ERP SYSTEM. 2

CHOOSE A SELECTION TEAM 4

EVALUATE YOUR BUSINESS REQUIREMENTS AND POTENTIAL RESOURCE 6

CONSTRAINTS

ESTABLISH YOUR SPECIFIC VENDOR SELECTION CRITERIA 9

IDENTIFY COMPATIBLE VENDORS 11

FULLY VET COMPATIBLE VENDORS TO CREATE A MANAGEABLE SHORTLIST 13

OPEN THE LINES OF COMMUNICATION WITH POTENTIAL VENDORS 15

EVALUATE YOUR POTENTIAL VENDORS 19

DETERMINE YOUR RETURN ON INVESTMENT (ROI) 23

SELECT THE RIGHT ERP - TEAM EVALUATION 24

ABOUT PANORAMA CONSULTING SOLUTIONS 25

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 1

ASSESS YOUR BUSINESS

WHY YOU NEED

AN ERP SYSTEM

2 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 ASSESS YOUR BUSINESS TO DETERMINE WHY YOU NEED AN ERP SYSTEM

1
START HERE
Start by sitting down and determining exactly why your business
needs an ERP system. This is especially important if you already
have an ERP system in place and are interested in making a
change. You will be looking for key gaps or challenges that a new
ERP system will help solve. Some of the most common reasons for
implementing an ERP system usually include:

Eliminate the need

for external help in
To improve efficiency maintaining the current
system’s requirements

Ensure you are compliant

with current industry
regulations, as well as
any upcoming changes in
Facilitate current and
regulations
future growth

Streamline processes and

put an end to the use of
multiple incompatible
Cut operating expenses systems

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 3

CHOOSE A SELECTION TEAM

CHOOSE A

2 SELECTION TEAM
THREE THINGS TO REMEMBER
The optimal selection team will include at least one member from
every department. Be sure to include human resources, IT, finance and
procurement, as well as any other pertinent departments. When selecting
your team, there are three important things to remember.

LEVEL OF COMPETENCE EXPRESS THEIR THOUGHTS EXCELLENT COMMUNICATION

Select a person based on their level
of competence and not necessarily
their job title. While it may seem
like common sense to choose
senior employees in management
positions, this can backfire. There
are two primary reasons for this.
One, people in these positions tend
to be busy, which could make the
selection process take much longer
than it should. Two, selecting non-
management employees with an
understanding of the process can
provide motivation, which may be
particularly beneficial during the
implementation process.
Choose people who are not afraid
to express their thoughts. Your
selection team will have some
decision making power. You will
want people who aren’t afraid to
step outside of their comfort zone
and express their ideas, even if
they are not popular. There is
a simple reason for this. Ideally
your team will have a clear picture
of how using an ERP system can
improve processes, but they will
need to have the courage to stand
up and make their ideas known.
Team members will need to be
more than vocal about ideas.
Equally important is the ability
to listen and understand the
ideas of other team members.
Opt for employees with excellent
communication and listening
skills. When it comes to this type of
project, you will want everyone to be
on the same page for the duration.
As a result, every member should
have the ability to communicate
their thoughts effectively, as well
as listen attentively to what others
have to say.

4 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

It is always a good idea to appoint someone as the full-time project lead. (In
most cases, this person should be someone who is already in a leadership
position and has a high level of authority within the company.) This person
will be responsible for ensuring the process continues through to completion.
After deciding on the project lead, you will want to sit down with him or her
and create a schedule that ensures the ERP system is selected in a timely
manner. The project lead will be given the task of keeping the process
moving, as well as assigning roles and responsibilities to different selection
team members.

Should You Hire an

Independent ERP Consultant?

If you and your team members are not 100% familiar with ERP systems, you
will benefit from hiring an independent ERP consultant to help you through
the process. They can provide in-depth guidance as your team works through
the following steps. Their assistance during the RFI, RFP, RFQ stages can be
invaluable. They are also a great asset when your team is evaluating vendors
based on their functionality, limitations, and strengths.

Before hiring an independent ERP consultant, be sure to ask for references.

Always check them out before signing any type of contract.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 5

 EVALUATE YOUR BUSINESS REQUIREMENTS AND POTENTIAL RESOURCE CONSTRAINTS

3
EVALUATE
YOUR
BUSINESS
REQUIREMENTS AND
POTENTIAL RESOURCE CONSTRAINTS

NOW, YOU’VE MADE IT THROUGH THE EASY PART AND IT

IS TIME TO REALLY GET TO WORK. START BY ASKING YOUR
TEAM THIS QUESTION, “WHAT DOES THIS ERP SYSTEM
NEED TO ACHIEVE?”

It is highly advised that you allow each member time to brainstorm this idea
on their own for at least 24 to 72 hours. The focus should be on what the ERP
system needs to help their specific department achieve – now, as well as in
the foreseeable future. Be sure to allow them time to talk with others in their
department who may point out issues the team member hasn’t addressed.

6 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 “NEEDS” AND “WANTS” ARE NOT THE SAME THING.

There is one crucial distinction to make sure everyone understands before

they begin brainstorming. “Needs” and “wants” are not the same thing. Yes,
there are plenty of things each department might “love to have,” but these
features may come at the expense of your implementation plan or your
future flexibility.

Once everyone has had time to brainstorm and consult with their
department, regroup to discuss each individual list. The team will evaluate
each department’s needs to determine which ones are most important.

While the final list will depend on your company’s specific needs, you should
be sure that:
• The requirements are a fair representation of each department’s needs
• The requirements have been prioritized

ASSESSING POSSIBLE CONSTRAINTS

1. After you have finalized your list, look back over it to determine if there are
any time constraints or resources that may present an issue. For example,
Will the employees involved in the initial implementation have adequate
training time, as well as enough support with their daily duties?
2. If you already have an ERP system, when will the current contract be up for
review?
3. Is there a specific date that you need to go live by?

Although not necessarily a constraint, this is also the time to establish a

budget for your ERP system.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 7

EVALUATE YOUR BUSINESS REQUIREMENTS AND POTENTIAL RESOURCE CONSTRAINTS

SYSTEM REQUIREMENTS
This is also a good time to address your core network and hardware choices.
Create a list that your team can check off when they begin to search for
potential ERP system vendors.

Things your selection team will definitely need to consider include:

• Which languages and currencies will need to be supported

• How many users will require system access
• What are the mobile access requirements
• Will there be a need for mobile device compatibility, such as hand-held
scanners
• Is offline system access required
• What is the preferred software delivery platform (on-site, cloud, hybrid,
etc.)
• How will it integrate with your current systems
• How will you document your existing hardware and network environment

8 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

ESTABLISH YOUR SPECIFIC VENDOR SELECTION CRITERIA

4
ESTABLISH
YOUR SPECIFIC
VENDOR SELECTION CRITERIA

Now that your team has

identified and prioritized
exactly what your business
needs in an ERP system,
it is time to switch the
focus to choosing the right
vendor.

Create a list of specific criteria you expect the vendor to

meet. This list involves everything from price and platform
to features and anything else your selection team feels is
relevant.

9 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 As you begin to look into different vendors, you may add columns
for the vendor’s financial strength, whether or not they share
similar corporate values, or anything else that the team deems
pertinent.

To help you establish your vendor criteria, here is a short list of the most
popular factors other businesses used when selecting a new ERP system.
This list was created based on a survey by Deloitte and Touche. The factors
included:

1 Total combined 2 Ease of 3 Ease of use

price of ERP implementation
software,
hardware, and
customer support

4 5 6
Ability to fit scope Level of support Potential for
of business provided growth

7 8 9
Ability to work Vendor’s
Functionality with existing performance track
hardware record

10 11
Quality of
Keeping score
documentation

While there are several ways you can score vendors, one way involves
assigning a weight or rank (1, 2, 3 or low, medium, high) to each requirement.
After your team has developed a list of potential vendors, they can go back to
this list and score them accordingly.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 10

IDENTIFY COMPATIBLE VENDORS

5 IDENTIFY COMPATIBLE
VENDORS

START BY LOOKING FOR VENDORS THAT

TARGET YOUR PARTICULAR INDUSTRY.
The ideal vendor will have a strong presence
in your industry, as well as multiple references
attesting to their abilities. They should have
a clear product direction statement for their
ERP software. Also, consider geographic
coverage area, size, and breadth of product
range.

11 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 Filter out vendors based on cost. This tier should help you
eliminate any that cannot meet your budget.

TIERS

TIER I VENDORS TIER II VENDORS TIER III VENDORS TIER IV VENDORS

PROVIDE SOLUTIONS PROVIDE SOLUTIONS PROVIDE A PROVIDE A
BETWEEN $500,000 BETWEEN $300,000 SOLUTION BETWEEN SOLUTION FOR
AND $1 MILLION + AND $1 MILLION + $100,000 AND UNDER $100,000
$500,000

Now, evaluate your system requirements. Go back to the list of system

requirements that your selection team created in step 3. Quickly cross off your
list any potential vendors that cannot meet these requirements.

By now, your list of prospects should be much shorter, which means it is time
to start evaluating all of the small stuff. It is a good idea to look for a vendor
that shares your core objectives and values. A vendor needs to support your
business’s core mission. After all, you want this to be a long-term relationship.
It is critical they provide ongoing support to avoid repeating this entire process
again in the near future.

Next, look at their implementation process and their approach to training.

You want a vendor who is committed to training, coaching and mentoring
your entire team. This ensures that your team will walk away with a clear
understanding of your ERP system’s configuration and features. While each
vendor will have information on their website regarding implementation
procedures, it is always a good idea to look for reviews left by their previous
clients who can attest to what they are promising.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 12

FULLY VET COMPATIBLE VENDORS TO CREATE A MANAGEABLE SHORTLIST

6
FULLY VET
COMPATIBLE VENDORS TO CREATE A
MANAGEABLE SHORTLIST

Whether the entire selection team or
only certain members take part in vetting
your list of possibilities is up to you. Even
though thorough vetting each of your
compatible vendors will take time and a
bit of research, it is the best and most
effective way to narrow down your list to
the absolute best options.

REPUTATION AND SITUATION

You will want to begin by looking at the potential vendor’s reputation.
Look for reviews left by previous clients. Be sure to check reviews
left on websites other than the vendor’s. Specifically search for
reviews related to the vendor’s customer service and long-term
support. Investigate what current users have to say about how easy
the platform is to use, if it allows them to efficiently care for all
their daily tasks and how any problems have been resolved since
implementation.

Look at how long they have been in the industry and whether or not they have
undergone any organizational changes in the last few years.

What is the future direction of the vendor, specifically are they likely to continue
offering the same platform

Do they have previous experience providing ERP system solutions to businesses

that are a similar type and size to yours.

13 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 BUDGET
This is really a no-brainer. You don’t want to waste time gathering
information on a vendor that is out of your price range. Be sure their
prices are within your budget. This information isn’t always easily found on
vendor’s websites, so you may have to call the company for details.

Don’t forget to obtain a complete price for everything. (The price you are
quoted may not necessarily include all the services you will need.) This
includes ERP software pricing and hardware purchases, as well as user
licensing fees. Determine if implementation service fees are included and if
not, how much this will cost. Also, find out about any maintenance fees and
any other ongoing support costs.

TECHNOLOGIES AND FUNCTIONALITIES

You will want to take the time to evaluate each vendor’s technology, while
also being sure to evaluate their ERP system’s functionality and ease of use.
Again, make sure the vendor’s product will work seamlessly with your
current system. This is an absolute must or the ERP will create problems
instead of solutions. Examine their most recent products, as well as any
new products they plan to issue in the next few years. Determine whether
or not they have a proven methodology for smoothly transitioning from
your current system to the new system. Again, this information is probably
detailed on their website, but you will also want to look at actual customer
reviews for confirmation.

To evaluate functionality and ease of use, return to the reviews left by the
vendor’s current and past clients. Of course, the vendor believes the system
is highly functional and easy to use, but do their clients feel the same way?

After fully vetting potential vendors, your team should have a manageable
shortlist to move forward with. If the list is still long, you may want to go
back and reevaluate. After all, the longer your shortlist, the more work and
time it is going to take before you finally select an ERP system and begin the
implementation process.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 14

OPEN THE LINES OF COMMUNICATION WITH POTENTIAL VENDORS

7
OPEN THE LINES
OF COMMUNICATION WITH POTENTIAL VENDORS
Although your team may have already contacted some vendors for
pricing information, it is now time to delve into the details. At this point
vendors will likely begin by asking a variety of questions to gain a full
understanding of what your business’s ERP system requirements are.
This is done to ensure they will be able to meet your requirements and
not waste valuable time.

REQUEST FOR INFORMATION (RFI)

In the past, businesses evaluating potential ERP vendors would create
and submit a Request for Information (RFI). It often included dozens,
if not hundreds, of detailed questions. This was a tedious process for
everyone involved. The client was expected to detail all of their own
information, such as specific requirements, business details, etc. Today,
RFIs are rarely used. When they are, it is often a shortened form that
includes most of the questions you will find below. In most cases, it
is much less time consuming to schedule a phone call to take care of
these questions and omit the need for any forms to go back and forth,
which almost always slows down the process.

Be aware that the initial conversations you have with a potential vendor
tend to be lengthy. Therefore, your first call may simply be to set up a
time for an initial phone consultation. Ask to schedule the call as soon
as possible. If a vendor is not able to give you a date within a reasonable
time period, it is probably in your best interest to cross them off your list
and move on. Either they are very busy or they are not that interested in
working with you. In either case, you are sure to feel the negative effects.

15 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 QUESTIONS TO
ASK VENDORS
While the vendor will be asking
lots of questions, your team
should be prepared to ask
plenty of their own. You may
1. What application areas do you cover and have already found some of the
what type of cloud hosting options do you
answers to the questions below
offer?
2. What technology platforms, such as when researching potential
databases and operating systems, do your vendors. If not, this is the time
applications run on? to ask. Here are a few sample
3. How long have you been in this industry?
questions to get your team
4. How many clients do you currently have?
started.
Don’t hesitate to ask for references to gather
further information on the vendor’s services
and skillset.
5. Are any in a similar industry or of a similar size to our business? What type of
experience have you had while working with them?
6. Do you write, design, and sell your own ERP system solutions or are you a reseller?
7. Does your company also take care of the implementation process or do you
subcontract out to a third party? Regardless of the answer, ask about their experience in
working with similar businesses.
8. How long does ERP implementation typically take and what type of training will be
provided to our implementation team and users?
9. If your business is interested in customizing the ERP software, ask what is involved in
this process.
10. How will your ERP system effectively support our business now?

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 16

OPEN THE LINES OF COMMUNICATION WITH POTENTIAL VENDORS

MORE QUESTIONS
TO ASK VENDORS
11. How will your ERP system effectively support our business in the future?
Discuss the flexibility and scalability of the ERP system software.
12. How often are upgrades and releases performed? What support do you offer
during this time?
13. In general, what kind of support do your offer?
14. If adjustments are needed after implementation, what would be required?
15. How adaptable to growth and regulatory changes is your ERP system?
16. What type of influence, if any, do your clients have over your future product
developments/ direction?

17 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 QUESTIONS POTENTIAL VENDORS
May Ask Your Business
To give your team an idea of what to expect and to allow them to prepare a
list of of answers beforehand, here are several sample questions they should
be prepared to answer when first making contact.
1. What is the industry and nature of your business?
2. How many staff members and sites do you have?
3. How many users will you have for each application area?
4. What is pushing your need for an ERP system? If you already have an ERP system, what
is forcing you to make a change?
5. What is scope of the project?
6. Do you have a specific budget allocated for the project?
7. Do you have a team/plan in place for implementation?
8. What is your annual revenue/ operational budget?
9. Currently, what is your IT infrastructure?
10. What other main systems will need to be integrated with the new ERP system?
11. What hosting option do you plan to use?
12. What types of documents and transactions do you process each day? Week? Month?
13. Where are you at in the decision making process and are there any other vendors you
are considering?
14. When do you want to go live?

QUESTIONS ABOUT PRICING

In addition, this is the time your selection team should get any questions they
may have regarding pricing out of the way. It can’t be stressed enough how
important it is to ask about the ERP pricing itself, as well as maintenance fees,
ongoing support costs, and the costs of implementation.

Your selection team may be a bit overwhelmed by all the information they
have in front of them. If you have hired an independent ERP consultant, they
will definitely be instrumental in helping you to shorten your list of potential
vendors. If you have not hired a consultant, you can still do so.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 18

EVALUATE YOUR POTENTIAL VENDORS

8
EVALUATE
YOUR POTENTIAL VENDORS
It is time for the selection team to carefully go through all the information
they have gathered and compare it to the list of vendor criteria created in
Step 4. They may choose to simply look at the information as a whole or if
they have assigned weights/ ranks to each requirement, they may want to
use this. This evaluation period will take time and it shouldn’t be rushed.
Remember, an ERP system is a huge investment and you want your selection
team to make the right choice for your business.

19 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 SUBMITTING A RFP AND RFQ
Request for Proposal & Request for Quote

Once they have determined their list of frontrunners, it is time to send out
a Request for Proposal (RFP). It’s impossible to put an exact number of how
many vendors should be on your list of frontrunners. However, keep in mind,
that the longer the list, the more time it will take to work through them.

A brief, direct RFP should be sent out to your list of frontrunners. It should
identify your business’s most important requirements, short/long-term
business goals and provide information about your business process. The
vendors can then create a presentation/demonstration for an ERP that meets
your needs. Request that the RFP be returned in a timely manner, but also be
sure to allow them enough time to create a presentation.

In addition to your RFP, you may want to go ahead and submit a Request for
Quote (RFQ). When responding to this request, each vendor will specify all
of their financial conditions, including initial licensing costs, implementation
costs, annual maintenance costs, payment terms, etc.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 20

SCHEDULING THE DEMOS

RED FLAGS TO LOOK OUT FOR INCLUDE:

Demos should be
scheduled according to
your selection team’s
timetable and how they
want to do them.
Insist on conducting the demo on
Put off their demo by expressing they
don’t have enough time to fulfill your
their own terms
request

Create doubt by criticizing your team’s approach or selection process

Refuse to follow your “demo scripts,” Hesitant to work with your team and
which involves you providing them only want to work with executives
with your own data set

21 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

 DEMO PREP TIME

With that being said, make sure to give vendors enough time to prepare and
fully understand your business. Here’s one important rule to remember.
ERP vendors who are almost impossible to work with during the selection/
demonstration process will not be any easier to work with during the
implementation process.

Before the vendor leaves, be sure to get clarification on when the

implementation process could be started if they are selected.

WHAT TO LOOK FOR DURING THE VENDOR

DEMONSTRATIONS
The demonstration will allow your team the chance to see the ERP system in
action, get an in-depth look at various features and ask any questions they
may have. Make sure everyone knows that there are no stupid questions.
If they need any type of clarification about anything, they should stop the
vendor and ask for it. This is also the time to raise any concerns they may
have.

Once the demonstration is over, your selection team will need to be ready
to give feedback. Pay specific attention to whether or not the ERP system will
meet each department’s needs. Also, be ready to discuss the look and feel
of the ERP system and how easy it is to use. If there are concerns, do not be
afraid to contact the vendor.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 22

DETERMINE YOUR RETURN ON INVESTMENT

9
DETERMINE
YOUR RETURN ON INVESTMENT (RIO)

Regardless of what type of business you are in, your return on investment
(ROI) is crucial. To make this easy for you, Panorama Consulting Solutions has
created an ERP ROI Calculator that you can take advantage of. This is also a
time when an independent ERP consultant who is familiar with evaluating the
ROI on ERP systems can be invaluable.

Click Here for Panorama Consulting Solutions ERP ROI Calculator

23 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com

EVALUATE EVERYTHING YOU HAVE LEARNED TO IDENTIFY THE RIGHT ERP SYSTEM

10
SELECT
THE RIGHT ERP - TEAM EVALUATION

Your selection team is almost at the end. After reviewing the demonstrations
and responses to any questions, particularly those asked of potential vendors
during the 7th step, the team should work together to rank your shortlist
of vendors. While doing this, they should keep in mind the vendor selection
criteria they came up with in step 4, as well as which vendor best meets the
overall fit for your business.

This is a significant step and although everyone is most likely ready for the
selection process to be over, it should not be taken lightly. Their decision will
have long-term consequences for your business and marks the beginning
of a partnership with a vendor that should continue to grow into the
foreseeable future.

©Copyright 2018 Panorama Consulting Solutions. All Rights Reserved. 24

ABOUT PANORAMA CONSULTING SOLUTIONS

ABOUT
PANORAMA CONSULTING SOLUTIONS

Panorama Consulting Solutions is an independent, niche consulting firm

specializing in digital transformation and ERP systems expertise for mid- to
large-sized private- and public-sector organizations worldwide. One-hundred
percent technology agnostic and independent of vendor affiliation, Panorama
offers a phased and integrated top-down strategic alignment approach and/
or a bottom-up tactical execution, enabling each client to achieve its own,
unique business transformation objectives by transforming their people,
processes and technology challenges to successfully implement change.
Panorama’s services include: Digital Strategy, Organizational Assessment,
ERP Selection, ERP Implementation, Change Management, Human Capital
Management, IT Staffing, Business Process Management, Business Process
Reengineering, Value Stream Mapping, M&A Integration, Project Auditing,
Project Recovery and Software Expert Witness Testimony.

Schedule Your Free 30-minute Consultation With an ERP Systems Expert Today!

Free Consultation

25 10 STEPS TO GUIDE AN ERP SOFTWARE SELECTION www.panorama-consulting.com