Selecting an ERP System

1
Selecting an ERP System

• The good the bad and the ugly!

2
Local Vendors

• Less cost
• Faster response
• Market knowledge
• Accessible
• Cannot hide or disappear!
• Here to establish a market

• No wow factor!
• Too small
• Little or no marketing
• No or few packaged solutions
• Low self esteem

3
Foreign Vendors

• Large size
• Packaged software
• Can be Experienced
• Can allocate resources to project

• 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

4
Typical Foreign Vendor
100 Employees or more!

• 15 Management and secretarial
• 10 Sales
• 70 Support
• 5 developers, 1-2 experienced, 3-4 rookies!
• HIGH developer turnover!

5
Typical Local Vendor
15 Employees or more!

• 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!

6
Reality!
Local
Foreign

• Many times inexperienced
• Can also run and hide. Many times they do!
• Many times expensive

• Many times inexperienced
• Can run and hide
• Always expensive

7
Lets 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 dont ask for any support or
  customisations as they cost too much. They now
  use Excel to produce many of their reports!

8
TCO What they tell you!

• Application Price
• Customisation
• Implementation (whatever this is!)
• Training

9
TCO What they dont 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
Support The training that should be!
Infrastructure Expensive licenses, telecomm lines, Royalties, hourly fees, hardware, more hardware, more software packages
Maintenance You pay for it but you dont know what it covers!
10
The big question

• What do we do?!

11
Ask yourself!

• Do we really need it?
• Are we ready for it?
• Do we understand our business needs?
• Are there any other alternatives?

12
Ask others who did it!

• 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!

13
Check the vendors

• 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!

14
If you sign

• 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

15
Keep in mind

• It does take a long time to decide.
• It takes much longer to implement!
• Dont 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 dont know
  what you need, who does?
• Have your requirements clearly laid out and
  written in a small document. It will help the
  company immensely.

16
Conclusions

• Do your homework well in advance. Evaluate and
  re-evaluate the companys 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!