Implementation Partner Selection
Very few companies implement their own ERP system, if any. In fact, it is a best practice to hire outside help. Some companies hire what the industry calls ‘Partners’ or ‘Consultants’ to perform the entire task end to end, while other hire or outsource few key tasks. This all depends on their level of experience in such projects. However, it is always advisable to outsource the project to external partners for a number of reasons namely; you don’t have the time, you don’t have the expertise inhouse, etc.
So, how do you select a partner? Well, before you do that, you need to first understand what you need them for. Do you need them for pre-project or project tasks? This leads you to have a good understanding of the tasks involved going forward. I will list a few of the important tasks in this article without going into the details today.
Pre-Project tasks include:
Business Plan – You need to have your business plan for the coming 5 years at least documented and approved by the board of directors. It will define the future structure of the company needed for success.
Organization Structure – After the business plan is clear, HR will have to create the organization structure that will support it. Depending on the size of your organization, external help might be required because once created you will also have to revisit the Job Descriptions, the Salary Scales, the Benefits and Commissions, Succession Plans, etc.
Business Processes – Next in line is the Business Processes. They need to be well documented and adhered to. Having your ISO certification always helps.
Policies and Procedures – by definition, the ERP will get into all corners of your company. Having clear policies and procedures, coupled with the business processes is one of the keys to the success of the ERP project. The clearer they are, the faster the project will take. While if they are not documented or clear, I assure you the project will fail or take a very long to time to succeed.
Detailed Requirements –I don’t mean listing the names of the modules or high-level features required. Saying you need a budgeting or manufacturing feature is meaningless to an ERP vendor. They all do it to a certain extent. For instance, the requirements from the sales module for a company that produces one sales order a month differs from another that produces a million. Be clear and detailed in your requirements.
As for Project oriented phases, they include:
Discovery Phase – This occurs prior to agreeing on the scope of work and the contract. This is led by the consultants in order for them to understand the details of the project, how many man-days they will require and what skill set will be required. This is usually non-billable.
Analysis Phase – This phase starts after the contract is signed. The consultants will lead in this effort through multiple workshops across the departments and lines of business. They will also dig into all the material created in the pre-project phase. The outcome is knowing how to map all the requirements into the new ERP.
Design & Deployment – This phase is where the technical part of the project starts. This is when the consultants do their magic in deploying the ERP to make it look like your company.
Data Migration – This includes the Static and Dynamics data. Static data includes your item definitions, customers and vendors databases, fixed assets, etc. This has to be gathered and cleaned by you the client and transferred across to the new system in a structured manner. Dynamic data is the actual historical transactions; however, I seldom encounter companies that do this. But if you do, my advice is to treat it as a separate project.
Training and Knowledge Transfer – Everything will change for your employees. Respect and own this phase. There is never ‘not enough training’. There are multiple training scenarios you can follow; classroom and simulation are a couple. Invest in this phase with your consultants while creating your own internal ‘Champions’ teams who will also serve as your support team in your extended company.
Customizations – No ERP will fit any company 100%. Someone with deep knowledge of the new system on the technical level must do this part.
Switchover – This phase is the toughest of all. Change management comes into play here. Internal and external teams are required to get you over this period. From experience, this when everything changes on your employees and if you allow resistance to talk hold, it will be disastrous.
Future Support – Partners with direct relationship with the vendors will be required after the switchover.
Whether for Pre-Project or Project phases, I have seen the following ten criteria come into focus when making the selection. The more you give these points respect, the more you increase the success of your project. After all, you are giving the keys to your kingdom to these folks:
Their Certification – Request to see an updated list of their certifications as a company and as the individuals that will be working on your project. Request to study their full resume portfolio and the number of projects they each delivered, and in what capacity.
Team Leader Experience – Interview the one individual that will be in charge of the whole project. Ask him/her all the tough questions and don’t be reserved. Take nothing for granted.
Project Managers Experience – PMs are the accumulation of their history. Further, small ERP projects differ completely from large ones. Interview them if you have to. Ask the tough questions; what other similar projects have they delivered? What experience level do they have with the products at hand? Ask them to share some of their tough situations and how they solved them.
Methodology – While meeting the PMs, request to be walked through the project methodology they will be following. Ask to see samples of a finalized Gantt chart, the documentation they use, how they will manage risks, their communications plan, the escalation paths, the approval process they plan to adhere to, etc.
Company experience (General) – There is a reason why vendors call them partners. Consulting firms should be regarded as your partners, because there will come a time when they will know more about the intricate components of your company than your top management. In addition, good partners understand this very important point and know how to manage it and turn it into win-win scenarios instead of some who fall into the ‘hit and run’ category.
Company experience (Industry) – It goes without saying that the partner that you hire should have good to deep knowledge of your industry.
Resources Turnover – Understanding the partner business model should be very important to you, and turnover must be taken into consideration. There are mainly two reasons this is important; First, partner companies are quite unique, similar to any other industry. It takes them time to turn a new hire into a profitable (billable) person. Turnovers usually sets them back if they do not have a good succession plan. Second, every time a new consultant is introduced to the project when someone else has resigned will cause you to have to explain again and again what has been already discussed and approved, even though documentation has been good. This is quite a headache. Therefore, stability is important.
Management Involvement - Remember the keys to your kingdom statement above, it then makes perfect sense to ensure that the top management are involved to an extent with your project. After all, it is their signature that is on the bottom line and not the consulting delivery team.
Service & Support – upon the completion of the project and the switchover has occurred, the relationship does not stop there. A partner company with a well-structured support department is necessary. They will be relied on to solve technical issues as well as respond to new business requirements, training of new staff, upgrades, etc. Further, insist to see their response time criteria.
Cultural compatibility – I left this point to last, but it is as important as all the others, if not more. If your teams do not click with the partners of choice, it will simply not work.
In conclusion, ERP selection starts with you, the company Decision Makers. It is your project, not IT, not the vendor nor the implementer because there will come a day when you will take ownership of the decisions you have taken. If it was the right decision you will shine, but if it was the wrong decision, God help you and your company.