Top Tips for Choosing an ERP Solution through a Government RFP
So how do you select an A R P solution?
Analyzing Business Processes
The last time we did this was about 20 years ago, 15 years ago, when the E R P landscape was a lot different. There were fewer vendors, more vendors were willing to build you a new system than go out and buy one today. Software as a service hosted solutions cloud services have made it much easier for you to implement a solution. You don't have to build anything from scratch. All of the best solutions are built and out there for you to use. You can think about it as components of a Lego system. You can buy the right Legos and make your operations more efficient and more automated. So where do you start? The first thing you do is think about why you wanna modernize. And we have another video that goes into the details of why you wanna modernize, but you have to think about whether or not you're ready for an E R P change.
Are your processes so broken that you don't have any choice but to go forward and buy something new? Once again, this is a once in a career project that shouldn't be taken lightly. So how do you select new e r P? Our recommendation always is to work with your purchasing department to put out an rfp. Or if there is an RFP out there that has been vetted and has some piggyback clauses, you can always use that. But start from scratch. Don't just go out and buy something that looks shiny or the sales guy is really good. And our recommendation, our experience is that the selection process itself can take anywhere up to eight to 12 months. So where do you begin? Study your business processes. Look at what's broken. Look at what's extraneous and non-automated. Look at what takes a lot of paper. Look at what's working wrong for you.
Look at where there are many Excel sheets. Take every process starting with your financials and all the components within that and study them. Map them out in the BPM and 2.0 format to understand how things are flowing today. The next thing you do is then take those as-is processes and study them and come up with your desired state two B processes. How do you want payables to run in the future? How do you want, ideally, inventory control to run in the future? How do you want your purchasing process to run in the future? With the right automation, with the right handoffs, and with the right kind of reporting coming out of it, when you map all of these things and think about your future state, you will then come up with a process map that shows you end-to-end how each process should work. Based on that, you then come up with your business process requirements.
What do you want your system to do at a very detailed level within each module, within each function, within each activity? How should the system act? How should the system automate? This part is very, very critical because it allows you to not only select the right system, it allows you to have vendor accountability. Because when you put a very detailed system requirements document in your RFP or in the market, the vendors are then requested or required to check off on each solution, on each line item in the requirements document confirming or declining that they can or that their system can do a certain thing. This document also becomes your support when you're implementing a certain thing because vendors, in my experience, they, it's easy to say we do a certain thing or it's easy to say it's coming in the next release, but more often than not, it's not true.
Building the RFP
So when they check off on something that says that we're going to do this function for your organization, you can then hold them accountable for it because it then becomes part of your contract and it becomes a really important contract compliance tool. So what do you do next? You take the requirements, you put it in an RFP and you release it. You invite vendors to send proposals in. So when this vendors send their proposals, you have to make sure that they're giving you everything you've asked for. Number one, that from a procurement standpoint, everything is in the proposal that the requirements have been answered. Based on that, you will then rank proposals on how you see the solution being offered, fitting into your organization, how it fits the two B processes, how it fits your requirements, does the price point fit into your budget? You take all of that, you make a short list selection.
So let's say you got five proposals coming in, you wanna see the top three come in and do demos for you. And you don't just want them to come and demo the shiny and the bells and whistles. You want them to demo how they can specifically deliver on your processes, on your requirements. To do that, you have to give them proper demo scripts that say, for my AP process, I want to see these five things for my payroll process, I want to see these 10 things for my inventory control. I wanna see these seven things. And if the vendor can't show you how their system can automate your processes, there is no fit. So you're going to take the requirements, the proposal, the demo scripts, and further call vendor references to see how a system worked, not just after implementation, but it's really important to know how a vendor, a software vendor, dealt with a client during the implementation process.
Making the Right Decision
It's, it's easy for the salespeople to sell something and go away, and now you lose that relationship. In comes the implementation team and they have no idea what the sales guy sold them. So it's very important that we talk to references to see how other clients were treated, to see how the implementations went, and consider all of that as part of your selection process. Once you've had all of these due diligence items covered, you then can collate this information, put it in a quantitative and qualitative matrix to see which system, which vendor stood out the most to you and your selection team. And once that is done, you can then make a recommendation to your council or board saying, this is the system we want to go with. And when you're asked why, you have a treasure trove of information that says, here's where they scored more, here's where the other vendors scored, and a good justification on why you're asking council or commission to approve this big ticket item. If you want to learn more about vendor selection and how it plays a big role in your E R P modernization efforts, get in touch with Vero.