Buying a new car? Long before hitting the showroom, you’re probably across every specification, option, bell and whistle. You probably know the details of the vehicle better than the unfortunate salesperson and you’re not afraid to show it.
So why would you not, then, apply the same level of rigour when buying an Enterprise Resource Planning (ERP) solution to run your business? One of these decisions is important. The other is just transport.
It’s an issue which confounds Simon Bishop. Bishop is a director at Melbourne-based Inecom, a provider of ERP and supply chain solutions, and he put it this way: “With so much riding on an ERP selection, the amount of information that is on-line from whitepapers, case studies and demos you’d think that product selection could be narrowed down earlier in the piece. But instead, what one often finds is the customer puts a consultant into an RFP process with the expectation that they will quickly learn the ropes and advise the best solution. But what consultant actually decides the final choice? At the end of the day the decision will always rest with the client.”
The internet provides a deep resource for car and other shopping, and it’s just as good for evaluating business software. After all, if in, say, manufacturing, it isn’t difficult to identify those software providers with broadly suitable solutions. Yes of course there are misleading statements and websites which “dress to impress” as Bishop put it, where substance is lacking behind the puffery, but decision makers need to invest the time to drill beyond that, and they don’t.
The problem isn’t that customers are casting the net too wide in the initial selection process. The issue is when they go to market with a complex RFP expecting detailed responses from all potential providers. These days, the best partners are busy implementing solutions. “With full ERP licenses priced as low as A$99 per user per month, how on earth does this support the cost of an RFP process?” asked Bishop. “The devil is in the detail, and it often takes 2-3 sessions just to confirm requirements, and sometimes results in a no-fit. If the RFP exercise amounts to nothing more than a fishing expedition, the resources are better spent servicing existing customers.” Or actually fishing.
In Auckland, GM of ERP provider Realtech Joanne Hand shares Bishop’s frustration. “ERP selection should start with the customer, but in many cases, it can be difficult for business owners to step back and evaluate it all [to start selecting]. Knowledge of software can be lacking, particularly if the major experience up to that time is with an accounting system, rather than an appreciation that an ERP implementation is more about mapping key business processes long before talking about software per se.”
Hand said she believes the RFP process can become a hindrance rather than a help as it can devolve into a box-ticking exercise which puts distance between customer and solution provider. “We prefer to engage directly with a customer to understand what their challenges are. To get a feel for their business and the business processes. It’s not about talking software and all the jargon which comes with the IT industry, it is about business problems and talking the language of the customer.”
But that doesn’t mean there isn’t room for consultants, noted Hand. “Is the traditional RFP process an issue? Absolutely,” she said. “But if you are struggling to get to grips with a growing business, there is room for a consultant to assess it and particularly to provide help with mapping business processes well before getting to software and what’s best for you.”
Is the RFP process broken?
Where Bishop and Hand also agree is that the weight of an RFP process is also felt by the customer.
“It’s not just us who will be spending a lot of time and effort putting together War and Peace,” said Bishop. “The customer, who has a business to run and who is experiencing the sort of difficulties which set them on the path of finding an ERP solution, now has a lot of paperwork to get through,” he pointed out. “The costs cut both ways.”
The idea that the RFP isn’t the best way to go about selecting an ERP solution isn’t novel. The idea that solution providers don’t like it is obvious, in much the same way that car salespeople have an aversion to ‘tyre kickers’. But if the time-wasting cuts both ways, and it is easy to see the case, then why not improve the process?
Having just recently been through no fewer than five consultant-driven RFPs, Hand questioned just who the process is serving. “It is disruptive and time consuming in the extreme. We couldn’t engage directly with the customer to ask about the nuances of what they need. This is what drives it to box ticking – when the RFP arrives at the business owner, it’s a lot of ‘yes, yes, yes’. Of course the answer is going to be ‘yes’ if you can’t meet with the business process owners to fully evaluate what they need.”
Enlightened self interest
If it sounds a bit like ERP providers are having a gripe about the lack of project awards, consider the concept of enlightened self-interest, the ethical philosophy which holds that by acting to further the interests of others, one’s own self-interest is served. For ERP vendors and their implementation partners alike, choosing the wrong projects is disastrous. Any short-term fillip in license revenue will, in the fullness of time, go up in acrid and acrimonious smoke.
“A mature partner and vendor won’t take every opportunity,” confirmed Bishop. “If it is not the right fit, then we must advise so.”
And parting ways may not only be because the software is wrong. (“Only desperate partners will shoehorn software. That is a certain road to failure,” he reckoned). It also comes down to decidedly human factors, including cultural fit and whether you get on as a team. “Which customer wants to interview your key team members? The answer is nobody thinks about it. We see this as key and recommend it wholeheartedly.”
Therefore, both he and Hand stress the necessity for altogether more organic methods of engagement after the initial digital evaluations are complete: the old-fashioned business meeting. “Too often the buying process just doesn’t involve people coming to see you,” said Bishop. “Instead, they are sat in the comfort of their office. Far better to come and see who you are dealing with and get an idea of their setup.”
Hand said a great place to start narrowing it down is case studies and reference sites. “These are great as you can easily identify with a similar business, get a quick overview and then go and talk to the people involved. And for a mature implementation partner, we’ll put prospects in touch with customers, so you can gauge, ask questions and exchange knowledge. Go and visit them at their coal face, check out their operations. They will explain the issues and how they were solved. And meet with the people who will be working on your implementation, start from day one with a direct relationship.”
With ERP projects notoriously demanding, actually liking the people you will work with is a big deal, added Bishop. “There is value in personal relationships. Meet them. They will make the difference if the proverbial hits the fan.”
Making the decision
Where a consulting engagement might last several months, selecting an ERP partner is a long-term relationship. Comparing it to marriage isn’t unreasonable: it takes work, there will be good times and bad, and done right it should last decades. Divorce, too, is costly and seriously unpleasant.
That’s why Hand and Bishop are adamant that the selection should be largely self-driven. “Remember, the consultant isn’t going to make the choice for you anyway,” he pointed out. “And customers today can readily browse through resources out there and get huge amounts of information.”
About cars, to be certain, but also about the software which drives better business. “When an informed customer comes to us, they should be around 70 percent ready from their own research. All you need do is have a read, watch some YouTube videos and do some self-selection before meeting with likely candidates. You’d do that for your new car,” Bishop concluded.
Realtech and Inecom participated as panellists on the Lunch Box webinar event held on Nov 29. Listen to the recording now for “Finding and Selecting the Right Software” to get more free advice and tips from experts.