ERP Selection and Implementation Myths, Part 1

MYTH#1:  “In order to select the best ERP system for your company, you’ll need to generate a detailed RFP (Request for Proposal) to send to each vendor that you’re considering.”

Presumably, the purpose of an RFP is to gather detailed information about your selection criteria, make an “apples to apples” comparison of the vendors, and evaluate them based on scoring a weighted analysis of their answers.   In reality, RFPs often equate to a huge waste of everyone’s time and company resources.  (A significant waste, since completed RFPs can be hundreds of pages in length!)

Here's my premise:  Historically, the RFP process occasionally uncovered glaring deficiencies and red flags.  Today, however, the General Ledger modules of the top ten accounting systems just aren’t functionally that much different from each other.   In many ways, the functionality differences between the most popular systems are insignificant enough that they’ve practically become a commodity.   Because of this, the analysis provided by an RFP process today is more likely to turn up red herrings than anything truly problematic or outstanding. So, what’s the alternative?   Instead of creating and evaluating massive RFPs, invest time in drilling into the exact nature of the business problems that you’d like the new system to solve. 

For example, if one of the business issues that you’d like to solve with your new ERP system is how to handle very complex revenue, billing and/or contract management scenarios, that should be a primary focus for evaluation.   Identify several other business issues that you’re currently experiencing, and evaluate specifically how vendors would solve these top priority issues for you.