Five simple steps before you go to market for an ERP

Tens of millions, burned, for want of five simple steps. Nearly every programme recovery I'm called into has the same root cause: a procurement that never established what was being bought.

Here are five steps to complete before you go to market to buy an ERP and contract a systems integrator to implement it. They apply to almost any other type of system too.

1. Scope. Which processes are affected, and which capabilities in each one genuinely differentiate your business.
2. Requirements. Signed off, and split three ways: what the law requires of you, what gives you competitive advantage, and what is simply how you work today. The first two drive platform selection. The third is where you change the process, not the software.
3. Data. Where it lives, what state it's in, and what you are actually migrating. One of the largest costs in any implementation, and the one most often found late.
4. Integration. Point to point, or through an integration platform. Crucially, how many integrations you need the SI to build.
5. Commercial strategy. How you go to market, how you engage suppliers, and how you create enough competitive tension to get a great price.

All five agreed with process owners, stakeholders, procurement and the steering committee.

A tender is proof, not a buying exercise

I once inherited an ERP mid-delivery. Stakeholders said it was missing critical functionality, and they were right: employee expenses needed a licence nobody had bought. Then I looked for the paperwork. No requirements. No gap analysis. No evaluation notes. No record of why this platform and proposal won.

We rebuilt the paper trail by interviewing evaluation panel members and reviewing vendor submissions. It was enough, and the vendor funded the fix because it had oversold the platform. But it shouldn't have taken that.

A tender is how you prove, before you sign, that three things are true:

• The ERP meets your requirements and delivers the key capabilities your business needs.
• The integrator can deliver it, evidenced by case studies.
• Both can do it inside the budget you actually have.

Deliver the five steps and you're ready to procure. Skip them and you'll need someone like me in about twelve months.

Scott Armstrong is a programme director who recovers and delivers ERP, finance, data and CRM transformation for large organisations. Talk to Scott about your programme.