You’ve seen those articles.  The ones giving you the steps you need to go through when choosing an ERP system?  Sure you have.  Eight simple steps.  Or ten.  Twelve if you are really detailed or have a bizarre sense of humor. 

 

There’s nothing wrong with them, of course, George Goodall has a nine point plan out on the MC Press blog right now that’s good reading.  Problem is, any list with more than five things in it is just too long to keep people’s interest.  You read the first, the seventh, and the eleventh point and skip the rest.    Too many balls to keep up in the air, if you follow my meaning. 

 

I like to think if you can’t distill something down into three points you’re not going to be able to explain it without using calculus.  I mean it’s no accident that it’s three strikes and you’re out.  And so, I’ve got my own three point list.  Take care of these things and the rest is just common sense. 

 

The first thing you want to do is make a list of what your business needs. 

Now I know when I say that everyone got there notebooks out and started jotting down their wish list.  Let’s see, we need a system that lets us enter regular customer orders, plus ‘quick’ orders, plus EDI orders, customer entered online orders, distributor entered online master orders and . . .

 

Truth is, most of us think we are pretty special.  Unique.  And the number of adjectives that it would take to fully describe the depth and richness of the personality that makes us the miracle that we are is huge.  Unfortunately, some of us (i.e., most of us) are not quite as complex as we might like to think and usually 90% of us can be summed up by four or five descriptive words.   Companies are no different. 

 

So don’t make a wish list.  Make a descriptive list.  What are the business capabilities that we are using right now?  Then add in a weighting factor that describes how much of the total pie this particular attribute is.  So, if you take in customer orders on the phone (30%), and by mail (10%) and via EDI (60%) be sure your list reflects that so that you are sure to look for a solution that is heavy on the EDI side but also allows easy entry at your site.

 

And when you make the wish list keep your eyes on the big ticket items.  For example, what type of manufacturing do you do; discrete, repetitive, orderless?   I can’t tell you how many people I’ve talked to who run an orderless style manufacturing plant but who have purchased a software package that requires every item produced to be done on a work order attached to a discrete sales order. 

 

And don’t go overboard with futuristic predictions about company growth either.  You might go global in the next five years and then again you might experience a 40% decline in orders and have to learn how to hang on with your finger nails.  Include only those future items that are pretty much in the bag. 

 

Second, think about what kind of technology you want to be on. 

Fortunately, this decision can be pretty independent of the first one.  Today there are so many packages out there, running on so many platforms that you can afford to make these two decisions separately.  Probably. 

 

Of course today everybody wants to be GUI (or browser based) and for many people that automatically says Windows which is, of course, WRONG.   I spoke to a client recently that had committed to an ERP package that was going to almost double the cost of their data center.  Interestingly enough they didn’t seem to see that as a problem.  Up to them, I guess. 

 

You need to evaluate the initial and ongoing cost of the technology, the difficulty in moving to that technology (does your entire staff need to be retrained or replaced by androids), it’s reliability, yada, yada, yada.   What good does it do if you save money on the supply chain side (you probably won’t but for the sake of argument) if your IT goes all to pieces?

 

And finally, decide just how much you can afford. 

Don’t just open the cash drawer.  And you will be tempted, my friend, the dour faced folks in finance most of all because the ghost of ‘this is the last system we will ever need and it will do everything we ever dreamed of’ will rise before you and seduce you with it’s siren call.  Believe me, ‘it’s not’ and ‘it won’t’. 

 

It’s like your parents use to say when you were a kid.  ‘Don’t order it if you don’t think you can eat all of it’.

 

There are other things, of course, but these are the key ones, everything else is icing.  Just  be honest with yourself (and I would be lying here if I didn’t mention that it’s almost always easier to do that if you bring in an outsider who is cynically enough  (hint, hint, nudge, nudge) to help you with that process), and go from there.  And here’s one more hint – these steps also work very well to help you see how effective your current system is and whether you should be looking.  (Again, hint, hint, nudge, nudge.)  Â