Custom Information Services (CIS)

ERP Selection: Recognizing the Pain and Steps for Evaluation

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Business owners often times ignore the warning signs that they need to ditch their current ERP system or at a minimum complete an upgrade.  Clearly, there are more pressing expenses that need to be addressed and often times the business software is last on the list.   Over the last 15 years as an ERP sales person, I have met with a lot of companies that do recognize the need for a new business solution due to the following business pains:

  • Business is growing and the current software is not flexible enough to take on these new challenges.
  • Inefficient processes are in place which is costing the company money in labor and dissatisfied customers.
  • Inventory is not accurate and more labor is spent figuring out where it went and what the cost should be.  I have been hearing business owners/managers stating that they have TWO cost accountants.  These are mid-market companies… why would you need a cost accountant if you have a good ERP system in place?  I also talked to another company this week that needs to add manufacturing and the controller stated that she would need to hire a cost accountant.  I stated that if you have the right software and implementation then you would not need a cost accountant.  I would love some feedback on this topic!
  • Software system is outdated, unsupported by the software vendor and the current installation is so old that it can not be ran on the latest server operating systems.  However, with virtualization this is becoming more of a non-issue.   But why would anyone run their most critical business software on an old version that is not supported anymore?
  • Personnel turnover is a major problem since staff are walking around with business data and processes in their head or in a special spreadsheet that no one understands.
  • Each department has their own spreadsheet to do their tasks that does not connect with any other departments spreadsheets… or they use the spreadsheet because the do not trust the data in the ERP.
  • Numerous company databases with lots of intercompany and/or cutting checks out of multiple companies for AP.   More wasted labor.

There are many more reasons but I will get more to the point of my article.

Sales Person’s Point of View

I always complete a discovery visit if a prospect is serious about a new system.  Discovery allows me to understand what the business owners expect from a new system.  Talking to managers and end-users is often very eye opening for the business owner if they are part of this portion of my discovery.  It is amazing to me that some owners don’t even know the pain that their staff goes through just to do their job.  If you are a business owner or similar and want to start the research into an ERP system then first and for most decide why you need a new software package.  Is it financial reporting that is a problem?  Customer service?  Inventory?  Then spend time with you end-users discussing their pains or ask them to provide a wish list of items they would like to see in a new system.  You will get good insight into what their problems are with the current system and perhaps get better buy-in from stubborn staff that never wants to change packages… You may also find that the current system is just not being used correctly!  Imagine that!  You may be able to fix what you have and save a bundle of money.

I often find that during discovery that folks state their system will not do this or that and in fact, I know that it will.  Maybe the software was not setup right in the first place or there is a lack of training, which leads to distrust in the system data and staff stop using it effectively.    However, in some cases it is better for the business to implement a new system.  Changing or upgrading software is a good excuse to get folks using the tools they have instead of wasting labor costs for the next 5 years.

I don’t like RFP documents since they are just lists of functions needed and don’t address business processes.  Most software packages can run head to head on an RFP.   Not a good way to start a software selection process.

Experienced Advice on Steps for Evaluation

After you recognize your pain and make the decision to shop here are a few steps that as a seasoned software sales consultant are highly recommended:

  • Ask your friends and business associates what ERP or business software that they use and are they satisfied with the solution and vendor.
  • Have a realistic budget in mind for a new system.   Software from reputable vendors is not cheap.  There are often promotional discounts, but you can’t always count on a discount.  If you cannot see the value of the software and vendor then perhaps you are looking at the wrong product. Maybe your business can take advantage of the Section 179 tax deduction to help pay for the solution and/or setup a lease with a buy out option.
  • Complete research on sites such as The Accounting Library.  Charles Chewning runs an unbiased company and has some wonderful tools to help you find a vendor.   I like his comment in an article he has on the site:  The real problem is unsolicited RFIs and RFPs. How can you possibly ask a vendor or reseller to answer detailed questions about functionality and project costs when they have spent no time with you? This is a complete waste of time and you accomplish nothing. The vendor or reseller doesn’t know you and you certainly don’t know them or their product. How can you possibly form a business relationship if you are strangers?”
  • Create a project team that includes managers from each department
  • Find two to three software vendors that you trust and that are not just software investment companies.  We have been a Sage reseller and now are a Microsoft Dynamics GP partner.  I can tell you that it is important to ask what their annual spend is on product development and do they have a product roadmap.  Ask your reseller or partner about getting this information.
  • Find a partner to work with since most good software vendors do not sell direct.  I(n my opinion software vendors know that they can not possibly do a good job at developing AND managing customers and implementations.    I don’t think that you can get the attention you need in the direct sales model.
  • Do commit time to each reseller to discuss your business issues.  Do include your project team.
  • To get buy-in it is best to remain positive about the process.  Don’t say things like; no software can fit our business.  This is NOT true.   Many years ago this might have been the case, but after selling ERP for 15 years I can state that there is software available that works for most companies no matter what the industry or business process.
  • Do not hold back on discussions with your reseller.  They are trying to help you and your business so try to be as open as possible.  If you are concerned about your company information then ask for a non-disclosure.
  • Do keep an open mind in changing some of your processing… resellers are more than software sales companies.  They make their money on consulting not software.
  • Do look for a reseller that has experience in your industry; not specific industry per say, but in the high level industry type such as discrete or process manufacturing, services, distribution, etc.
  • Utilizing a firm that has some experience, can often times provide good best practices and in the end not only provide you with new software, but improve your operations.
  • Discuss deployment options in detail and turn to your trusted IT advisor on which option is best for your company based on your current IT infrastructure.  Cloud solutions are all the buzz but long-term they are not a good investment unless you are a start-up or don’t have any network infrastructure in place.  Hosted software is a good option since you own the software and yet you don’t have to make a large IT expenditure.
  • Always ask about the network needed to support your software of choice since this can add at times a significant number to the cost of the implementation.
  • Ask about post-go-live services and what to expect from them once you are live.  Is there a procedure in place?
  • Ask about their invoicing and payment terms.  You do not want to get a huge invoice once a month for services and then have questions about what work was completed.
  • Ask about annual maintenance plans.  How much is it and what is included.  For example, Sage maintenance is 20%.  Microsoft Dynamics ranges from 16% to 25%.   Most of our customers choose the 18% support plan.  For more information on support plans visit this article.

Final Words from a Tenacious Sales Person

Be courteous to your sales person.  We spend hours working for you at no charge to make sure you are getting the solution you need.  Not all of us are bad people!  If I have a rude prospect then I really do not want to help them as much.  I will help them, but I may not go that extra step to get them a good deal.  Sorry, it is the truth.   Sales people have families and bosses too.  If we seem pushy it is because we have deadlines to meet and other prospects to talk to.  We like to define the sales process at the beginning to ensure a deal does not get out of control.  If you promise to get back to us by a certain date, then please do so even if it is to say you don’t have the answer yet.   You also won’t get as many emails or phone calls from us!   I once had a customer tell me that I was like a bulldog; once I got a hold of something I didn’t let go.  Yes, I am tenacious and yes, I will do a good job for you!

Custom Information Services or CIS is a Microsoft Dynamics GP reseller in North Texas.   If you would like more information on our product and service offerings for manufacturers, distributors and complex accounting, please contact me through email at or by phone at 817-640-0016 x 109.

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