ERP SOFTWARE EVALUATIONGUIDEINFO@AVANTIICO.COM949.613.8585 AVANTIICO.COM

Selecting a new Enterprise Resource Planning (ERP) system is a major decision for organizations due to all the factors that must be considered. This ERP Evaluation guide shows how having an evaluation process leads to the selection of the right enterprise resource planning solution for your organization. This evaluation process must be strategically thought out as the selection of the ERP system will impact your organization for the next 7-10 years.

THIS GUIDE WILL BE BENEFICIAL TO YOU IF: 1. You have been tasked to head/participate in the 3. You want a guide, to augment your organization, in ERP evaluation process selecting the right ERP system for your organization 2. You are seeking information about the ERP evaluation process

At Avantiico, we understand your journey. With over 400 years of Enterprise Resource Planning (ERP) implementation experience, Avantiico has developed this guide to help serve as your roadmap for preparing and executing a successful ERP evaluation.

Consider how you answer these starting point questions and you will have a be�er chance in ensuring that your evaluation process will lead to the acquisition of a new ERP system that meets your organizational, functional, technical, business and compliance needs. More importantly, your project has much be�er odds to be completed on time and within budget.

PRIOR TO YOUR JOURNEY, YOU MUST DETERMINE YOUR ORGANIZATION’S READINESS FOR EVALUATING A NEW ERP SYSTEM. DOES YOUR ORGANIZATION HAVE:

THE RIGHT EXPERIENCE?• Have you or your co-workers ever done an end-to-end ERP evaluation before?• Do you know if your management team has been previously involved in selecting or implementing a new company wide ERP solution?

THE RIGHT TEAM?• Do you have an inhouse team to help you with the ERP evaluation project? • How many team members do you have in mind?• How much time will your team members be devoted to the project?• Have you identified a team leader with strong project management experience?

THE REQUIREMENT FOR A BUSINESS CASE?• In your company or within your team, do you normally build a formal business case before making large purchase decisions such as for a new ERP solution?• If so, can you list 3-5 reasons for why there is a business case for changing ERP in your organization? • If not, why are you evaluating an ERP system now?

VENDOR CRITERIA?• Is there an understanding of what the criteria must be for vendors you are evaluating?

OUTDATED SYSTEMS?• What is the main reason for your ERP search? Is your current solution old, out of support, too inflexible for your users etc.? • Has your business changed? Are you growing into new geographic markets? Have you acquired a new business and started offering new products or services?• Is one department complaining more and more? Are customers complaining about support or late shipments?• Which business processes are not working that the new ERP system should address?• Do you have multiple systems not talking to each other?• Information about business performance is not readily available?

Is change an easy process to achieve within your organization? In the past, what has occurred in your organization when undergoing change? Typically, ERP implementations require a 6, 9, or 12-month timeline and significant resources. As such, executive management and the board will be looking for a justification to spend an exorbitant amount of money, time, and resources. Does this describe your organization?

If yes, frame your justification by building a proper business case that associates dollars (so� dollars, which relates to inefficiencies and hard dollars, which relates to money lost due to inefficiencies) to balance the cost of buying and implementing a new ERP system with the expected savings.

USING THIS GUIDE IN YOUR EVALUATION, YOU WILL SOON: • Understand the four key components in an ERP evaluation process that leads to a successful selection and deployment of an ERP solution • Be empowered with the tools necessary to justify the purchase of an enterprise resource planning system by assessing the pain points, benefits, risks, and costs of an ERP investment • Understand how to manage risks associated with the evaluation process • Ensure logical and prudent steps are taken to carefully vet vendors during the evaluation process.

04on a Vendor

COMPARE, CONTRAST & DECIDE

0301 business processes

EVALUATE02 to the ERP

evaluation process

ACCELERATE

01

for the journeyPREPARE

PREPARE: THE BUSINESS CASE FOR THE JOURNEY

Following this guide will shorten your learning curve allowing your organization to make the right vendor selection.

THE FOLLOWING STEPS ARE YOUR JOURNEY THROUGHOUT THIS GUIDE:

Avantiico has cra�ed this guide to outline the steps your organization must take to fully realize the time, effort and investments for a successful ERP selection and deployment. Following the completion of this exercise, we will assign you an experienced ERP Evaluation Coach who can review your responses, answer any questions and assist you on your ERP evaluation journey. Your assigned ERP Coach will be an ERP veteran who has experienced multiple implementations and have been invoked in multiple ERP evaluations from a vendor selection perspective. They have been involved in many successful implementations as well as vendor evaluation face-offs. The ERP Coach is available for assistance throughout your ERP evaluation journey and will provide insight into how careful selection of ERP vendors leads to successful ERP deployments.

1. We have given a couple of examples. Were they relevant to your business? 2. Do you have, or can you prepare a list of top 10 pain points for your business? 3. Do people within your organization agree on what the top 5 priorities are?

4. What would you say are the expected benefits from this new ERP project? How are you measuring the benefits? 5. Do you know of any risks associated with this project? 6. Can doing nothing be an option? Is there a cost to not do anything?

SOME EXAMPLES THAT MAY PERTAIN TO YOUR ORGANIZATION COULD BE: 1. The approval process for a requisition, purchase order, invoicing, and cu�ing a related check takes an inordinate amount of time. This process causes inefficiencies and may lead to a loss of vendor discounts. 2. Sales forecasting is incorrect on a recurring basis. Due to inefficiencies, finished goods are not available when required by customers and that leads to an increase in customer dissatisfaction.

ADDITIONALLY, ASK YOURSELVES THESE QUESTIONS:

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ERPCOACH

The formation of the business case will help senior management understand that a new ERP system will transform the business so ge�ing their buy-in will help you launch your evaluation on the right track. In this manner, you will be building consensus around the evaluation effort, se�ing realistic expectations, and receiving the senior management support you require for a successful evaluation. This may take time, but your organization will have a smoother, more effective, and ultimately a be�er-run ERP evaluation process that will lead to the organization making the right choice for a new ERP system.

02 ACCELERATE: TO THE EVALUATION PROCESS

1. Have you defined a proper evaluation process? For example: a. Have you defined a decision date on when you are going to select your vendor? b. When do you want to be live with the new system? c. How many vendors will you be looking at? 2. Will you be building an ERP Request for Proposal (RFP) document?

3. Have you identified key internal stakeholders that will prepare/participate/score responses in the ERP evaluation process? 4. Have you defined your requirements and prioritized? 5. Will you be preparing demo scripts for vendors that recreate your major business processes? 6. Do you require an outside consultant to assist you during the RFP process?

Now that you have prepared a business case and defined your evaluation process, the organiza-tion needs to investigate their business processes to determine what is not working, what can be improved, and what is working. Subsequently, focus on areas of improvement that will bring benefits to the organization in terms of time savings, money, and productivity gains.

03 EVALUATE: CONDUCT A THOROUGH ANALYSIS ON WHAT’S WORKING AND NOT WORKING IN THE ORGANIZATION’S MAJOR BUSINESS PROCESSES

1. Month end, Quarter-end, and Year-end Closing and subsequent reporting of results. 2. Procurement Process

3. Supply Chain Process 4. Manufacturing Process 5. Sales Process

What must you highlight to achieve buy in from senior management?IN YOUR BUSINESS CASE, BE SURE TO HIGHLIGHT: 1. The competitive advantage a new system will bring 2. Enhanced collaboration across the enterprise 3. Enhanced productivity due to streamlined processes 4. Be�er customer service leading to higher customer satisfaction 5. Be�er management, statutory, and compliance reporting. 6. The elimination of duplicate processes, manual processes, and unnecessary applications

ONCE YOU’VE RECEIVED BUY-IN FROM SENIOR MANAGEMENT, THE PROCESS TO EVALUATE AN ERP SYSTEM OFFICIALLY BEGINS. AT THIS POINT, ASK YOURSELVES THESE QUESTIONS:

FOR EXAMPLE, THESE QUESTIONS PERTAINING TO YOUR BUSINESS PROCESSES WILL HIGHLIGHT WHAT’S WORKING, NOT WORKING, OR CAN BE IMPROVED: • How much are manual processes being used in your current system? • Do you have many manual processes that are unique and known to a few users? If that user leaves, will you be impacted? • Do you have multiple systems for different business processes? • Are you using excel spreadsheets due to your current system’s limitations? • At month end, do you have to reconcile the numbers generated by your current system?

Which business processes might experience inefficiencies?MAJOR BUSINESS PROCESSES TO BE REVIEWED INCLUDE BUT ARE NOT LIMITED TO:

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As we discussed previously, senior management needs to ensure that their ERP systems can support and enhance your business, not only for today but for the future. We have already prepared a business case, a�ained buy-in to the evaluation process, and reviewed your business processes. Before hiring outside help, also consider your own team.

Do you have commitment within the organization to support change?

04 COMPARE, CONTRAST & DECIDE ON: CHOOSING AN ERP VENDOR

1. Read Gartner’s Magic Quadrant on ERP vendors or get other industry experts to see if the vendor is on the cusp of current trends and are investing in emerging technologies. It's not enough to solve your business pain points today. The ERP vendor should be able to demonstrate a longer-term growth strategy that can help you stay competitive into the future. 2. Are you looking for a local vendor/partner? 3. Is strong support a criterion for selecting a vendor/partner? 4. List Vendor Requirements.

• Don’t waste time on basic functionality as ERP systems have matured and focus on must-haves unique to your business. • Gather a list of your most mission-critical requirements, including functional; user-friendliness; scalability; workflows; systems integrations; governance, risks and compliance; data migration and conversion. • Focus on specific business processes and system requirements. The more specific you can be upfront, the more detailed your vendors can be in their proposals. Few things derail project budgets and timelines as the 'assumptive' or absent requirements. • Prepare high level RFP template for vendors. This will help focus on key requirements.

KEY PREPARATION REQUIRED WITHIN THE ORGANIZATION:Before reaching out to vendors, you must prepare the organization for change internally and to ensure the success of the project. If the organization is not prepared, project success is diminished.

1. Make sure you engage with end users, IT and senior management. 2. Create a team from that mix and a go to person for each functional area if possible. 3. Have you considered doing ERP training for your core team members? 4. Change Management. Get employee involvement as most people do not like change. They are quite comfortable with what they are doing today. Get their buy in by asking for their input. Consider who are your best change management champions across each department. 5. Appoint an ERP champion/ Project Manager and surround her/him with good people. A product champion/ Project Manager is someone well respected in the organization. This person is willing to do whatever it takes to get the job done. He/she will ask all the tough questions and ensure that all the timelines set by individuals are met. Assign this individual at the beginning of the vendor selection process

Once organizational-wide commitment is established, you can finally consider the a�ributes of each vendor and select the ones that brings benefit to your organization.

What does your ideal vendor look like?

KEY ERP VENDOR ATTRIBUTES:You are now ready to begin scoping the criteria for selecting the vendor of choice for your ERP solution. You need to establish a baseline with vendors that can demonstrate solutions to your requirements, bring value to your organization, and you must give thought to the following.

Assign a score for each capability so that you have an objective capability to evaluate RFP responses.• Prepare detailed requirements by application area (i.e. General Ledger, Accounts Payable, Accounts Receivable, Inventory, Purchasing, Order Processing, manufacturing, production control, warehouse management, service management, etc.) In addition, have sections on key vendor a�ributes required (revenue, number of professionals, clients, years in business, financial statements, etc.) Also, have the technology, architecture, and sections.• Prepare Demo Scripts

5. Industry Expertise. Does your vendor have expertise in your industry? 6. Avoid Packages that require too many Customizations. Consider the amount of customization required to configure and deploy as a highly customized system will generate higher cost, not only in the initial deployment but when upgrading from release to release. While some customization is essential, too many organizations over-customize their so�ware, to the point where years later, they can't upgrade the system without losing all this custom work.

7. Implementation and Training Services. Make time to consider the abilities of the vendor when it comes to the ability to implement of the system on time and within budget. Are there technical, functional, development consultants capable? Have you review their CVs? Who will be assigned to your engagement? How will they perform knowledge transfer? Learning a new way of operating will require a significant time commitment for everyone, so the project team must take proactive measures to reduce the burden on employees. Identify department-specific needs, allowing for sufficient time to develop and deliver training programs. Use the train the trainer methodologies. 8. SaaS or on-premise deployment. What ERP delivery model is right for my company? The three primary options are on premise ERP, hosted/managed service ERP and cloud ERP solutions. 9. Mobility. As mobility requirements increase accessing ERP systems from desktops is no longer the only option. Choose an ERP solution that allows users to be productive on smartphones and tablets yet at the same time will ensure that sensitive information is secure. The more people can work remotely and provide data, the timelier your data will be. 10. Other criteria for ERP selection.

• Poorly run and ill-defined evaluation projects can lead to poor implementations. In addition, lack of participation and input from key stakeholders in the evaluation stage can lead to poor acceptance and user adoption. • Delays running the evaluation project itself ultimately delay the go-live date and the time to benefit. • Find a good Value-Added Reseller (VAR)/ Implementation partner such as Avantiico who will get you live on time and within budget. • Determine your timeframe if you will have an implementation that will be for all modules purchased or a phased approach. How complex will your data migration/

conversions be? Are you looking to migrate summary vs. transaction detail? How 'clean' is your data today? • Issue a Request for Information (RFI) or a Request for Proposal (RFP) based on how complex your requirements are. Ask vendors questions running the gamut as it relates to cost, technology, hardware requirements, training, customer base, customizations and qualifications of the services team. • Don't forget about your IT team when selecting a solution. Do you have a well-defined ERP IT plan? What IT skills do you have in-house today versus skills you need help with? By answering these questions, you will have a much be�er handle on what you need in an ERP system and be be�er positioned for success.

11. Compare and Contrast Vendor Solutions. There are multiple ERP vendors operating globally and each ERP may or may not satisfy 100 percent of your organization's requirements. Therefore, it's important to prioritize and create a matrix of functionalities required by the business and rank different ERPs with this matrix. By doing so, it will be easier to choose an ERP that provides the maximum number of required functionalities and gives the expected ROI/Payback. Be prepared for vendor demonstrations and make sure they are addressing your key accounting/business/ technology and financial criteria. 12. Call references. You will be amazed at how much you will learn by speaking to the vendor’s customers. Select references that are in the same industry and revenue/user size if possible. Ask for 3-4 references. Have a standard questionnaire prepared. Some of the questions, but not all, to pose are.

a. Modules installed and if liveb. Number of End Users both – Don’t forget mobile or casual usersc. Who was assigned to the implementation?d. Is it user friendly?e. Are modifications required?

f. Come in on time and within budget?g. Ongoing supporth. Why did you select the vendor?i. Issues that have arisenj. Would you still select the vendor?

13. Make your decision 14. Select one vendor to begin negotiation with. Maintain contact with your second choice in case negotiations fail with the first.

INFO@AVANTIICO.COM949.613.8585 AVANTIICO.COM

Moving to a new enterprise resource planning system is challenging but with the right solution and an experienced provider, it can help unleash your business' true growth potential. That is why the right evaluation process is key.

Avantiico, trusted by over 100 organizations and subsidiaries—some public across multiple verticals and countries with over 12,000 users deployed worldwide, is proud to be a Microso� Dynamics 365 partner.

Here at Avantiico, we have a strong track record of providing flexible, reliable world-class ERP systems and deployment. Our aim is to bring you clarity into your daunting task of evaluating your organization’s next ERP solution. Schedule time with our ERP veteran for complimentary coaching.

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