Well Begun is Half Done -- Select the right ERP package
What is ERP Package
Evaluation? It is a process that typically involves the following stages
·
Evaluation of available ERP packages on
different parameters
o
Will it help meet the immediate, medium term and
long-term business and IT objectives of the organization?
·
Make the right choice of ERP package
The next obvious question is Why
carry out the ERP Package Evaluation exercise? Reasons are many,
following is a partial list
- · There are numerous ERP packages available in the market and there is a need to make an informed choice
- · Constantly changing/evolving technologies, business/IT paradigms
- · Need to align information technology solution choice with business vision
- · Enable better preparedness to negotiate with package vendors
- · Complexity of integrating disparate systems - post consolidation / merger / acquisition
The following methodology can be used for the ERP package evaluation process
Understanding Business
Landscape & Requirements
This is the first step and involves
internalizing the organization's vision and mission, getting a firm grip over
the organization's company-level and industry-level critical success factors,
key value drivers, current and future economic climate, important issues &
considerations and competitive landscape. This should be followed by
discussions with the organization's top management and A-team to get several
key questions answered. A detailed questionnaire could prove useful. Following is
a partial set of questions. The objective of the discovery should be to get a
clear list of expectations from the ERP package-based transformation
- · Organization Structure, operation locations, departments and functions in each location
- · Details of product and service lines, R&D effort & spend
- · Turnover information - overall and product/service line wise breakup
- · Business processes/ functions proposed to be mapped to the ERP package
- · List of mission critical processes
- · Growth expectations (turnover, employees, geographies, product/ service lines)
- · Master data elements and expected data volumes
- · Reporting requirements (statutory, compliance, operational)
- · Detailed understanding of existing IT system landscape
- · Details of systems in-place, functionalities supported, process flows
o
Server specifications and locations, networking
landscape
o
Interaction between current systems, details of
systems approaching sunset
o
Security features around systems/ infrastructure
o Disaster Recovery/ Business Continuity plans
Developing Business Scenarios
The objective of this step is to arrive at the list of business scenarios (based on information gathered in the previous step) whose fitment will become a key success factor for the ERP package in the fray. Failure of the package to address the identified scenarios could result in disqualification. A structured approach is necessary to develop the scenarios, with scenario description, data input, expected output, actual output, data considerations/variations, user interface requirements. Scenarios possible in the future could also be conceptualized. Process flows of the various identified scenarios need to be documented along with known variations/ twists
The fitment assessment could be based on extent of fitment, available options to address gaps. To assess satisfaction levels, the dimensions could be overall comfort level, UI effectiveness / ease of navigation / look & feel, ease of data manipulation, control and security
Tailor Evaluation Criteria
& Scoring Matrix
With business scenarios clearly
listed, the next step in the package evaluation process is to list the
evaluation criteria and scoring matrix
The evaluation framework should
comprise the following
- · Criteria category (e.g. technical assessment)
- · Detailed criteria per category
- · Weightage for each criterion/ category
- · Scoring key for each criterion
- · Method to arrive at final composite score
Decision on weightages for
identified criterion is critical. Following is a sample
- · Product Functionality: 40-45%
- · Technical Evaluation: 20-25%
- · Costs Involved: 20%
- · Vendor Credentials/expertise: 15%
For the criteria category of technical assessment, the following criteria could be applicable
Criteria |
Details |
Platform Support |
•
Operating System •
Database •
Web Server •
Application Server •
Portal |
Architecture |
•
Application architecture •
Architecture characteristics (openness,
accessibility, configurability, integrability) •
Development environment |
Interface and Integration Support |
•
Out of the box integration •
Built-in web services integration •
Data loading and migration •
Process oriented integration |
Reporting Support |
•
Facility for end users to create and run
ad-hoc queries •
Create/customize web-based point & click
reports |
Security Features |
•
HTTPS and SSL support for secure content
delivery to browser •
Authentication and authorization security
(including single sign-on) •
Organizational security (role, dept etc.) •
Data Security features •
Audit Trail feature |
Support for DW and BI |
•
Nature of multi-dimensional reporting •
Integration with external data warehouse |
Flexibility |
•
Flexibility in deployment options (application
and database servers on same physical box versus multiple boxes, support for
distributed databases etc.) •
Flexibility in customization •
Scalability |
Messaging |
•
Integration with standard/ widely used email
applications •
Integration with standard fax servers |
Maintenance, Support & Upgrade |
•
Diagnostic and technical support •
Remote Support •
Patch Management •
Upgrade Management •
Performance testing •
Data Archiving |
Usability |
•
Intuitive navigation •
Configurability •
Task oriented dashboards •
Web client enablement |
Recommendation on package
selection
The following aspects are
considered before arriving at the recommendation
Evaluation Framework Dimensions
•
Score from Functionality Assessment
•
Score from Technology Assessment
Other Key Considerations
•
Market's assessment of the package (perception
in the market)
•
Ease of Implementation, Operations &
Maintenance
•
Infrastructure hosting and maintenance
•
TCO
o
Licensing cost
o
Hardware cost
o
Consulting, Implementation & training costs
o
Recurring annual costs
Infosys Experience
Infosys has vast experience in
carrying out ERP package evaluation exercises for organizations in various
industries across the globe. Following are key takeaways based on experience
•
Stakeholder Buy-in à It is vital to seek and
obtain the blessings of all key organizational stakeholders
•
Clarity in evaluation approach à It is advisable to
develop the criteria before looking at the application
•
Go past the hype à
The key is to focus on the effectiveness of the business scenarios & the
scoring model
•
Focus on essential features à Prudently
differentiating the Must have's and the Good-to-have's
•
The package vendor's financial viability needs
to be factored in
•
It will be important to work with realistic
projections - on customizations, training, ongoing support etc.