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The document at the heart of ERP installation success - and how to create it

When it comes to IT projects, they rarely come much bigger than the company-wide installation of an enterprise resource planning (ERP) system. The right system will integrate core processes across your firm and transform it through improving productivity and securing future profitability.

However, the installation of a new ERP system is not only big news for your business, it could also provide you as an IT professional with an opportunity to make a significant impact on your firm's prospects. This is because the unique blend of technical knowledge you bring to the table will prove invaluable in identifying and implementing the right system from the moment your firm considers the investment.

With so much at stake, you'll want to do everything you can to prepare yourself for the journey ahead.

Central document

It's therefore valuable to know that in most cases a successful ERP installation begins with just one thing, and that is a well-researched 'request for proposal' document (RFP) that clearly states expectations and requirements from both the provider and the system itself. Getting this important document right will greatly enhance your firm's chances of success from the outset.

The RFP document should clearly establish what your firm wants and needs from the ERP system it deploys. It sounds straightforward - and there's no reason it shouldn't be - however many RFP's compromise the end result of an ERP installation because they have been hurried, ill-researched or without crucial information.

Understanding how to approach the task of creating an RFP will stand you and your firm in good stead for the technological journey ahead, and will give you a unique chance to showcase your skills and expertise by overseeing what could be one of the most important investments your firm makes.

Team effort

Embarking on such a significant IT venture may sound quite ominous; however it shouldn't be something you tackle in isolation. Make sure a high degree of collaboration takes place before any concrete decisions are made by organising an internal ERP committee comprising of specialists in IT, client management, finance, marketing, HR and sales who can quantify the various different processes that join your firm together. These processes will include project administration, resource and employee management, time and expense recording, accounts payable and receivable, cash management and client management.

Valuable insight

Interacting with each specialist on your internal committee will provide you with insight into workflow and business issues that may be negatively affecting progress. You'll no doubt already be familiar with the systems your colleagues are using but it is important to step out of 'IT manager mode' to get an alternative view about the effectiveness of your firm's applications from the people who use them day in - day out.

Wherever you find numerous and disparate platforms, consider unifying processes with a single platform that will help with managerial and strategic decision-making by providing a 360 degree view of the company. Connecting departments via one robust system in this way will also save employee time and reduce risk of human error - both of which will contribute to your firm's profitability and operational security in the long run.

Executive expectations

Liaising with the key stakeholders in your firm to gauge their expectations in terms of establishing the system's core criteria and formulating an all-important return on investment (ROI) model is also a very important preliminary step in the ERP selection process.

The senior leaders of your firm along with the CFO will play an integral part in providing the desired return-on-investment (ROI) indicators and timescales; along with an outline about how the firm will benchmark this ROI and when. These projections are not only valuable to potential vendors in that they will use the data to assess the viability of delivering to your firm's requirements within any given timeframe; agreeing to this information 'up-front' will also have the effect of aligning the individuals in your firm to a set of objectives, thus avoiding disappointment further down the line.

All that glitters

Conducting an analysis of the market place before deciding which vendors you will approach is vital for knowing who you intend to target with the finalised RFP. For instance, a business platform built for a professional services firm will differ significantly from a system that is designed for retail or manufacturing, so look for the best fit for your industry.

Similarly, the technology industry moves quickly, and vendors are constantly updating their products to provide ever-more sophisticated features and applications. Consciously avoid getting drawn in with 'whistles and bells' that in the end will offer little practical benefit to your firm.

Instead focus on the functionality and accessibility features that will enhance the way in which your firm does business: Consider mobile access for remote workers, social connectivity to enable project collaboration, and dashboards and analytics capabilities for concise and accessible management reporting.

Research and reach out

Creating a vendor shortlist on the back of some initial research will help identify the most attractive potential suppliers and systems. It helps to know, for instance, what systems your competitors are using. What do industry analysts have to say about certain products and suppliers? You can find out this and more by reading the trade press and by completing the requisite Internet search.

Additionally, distributing a brief 'request for information' document to potential vendors before sending out the finalised RFP will help you identify the strongest players and exclude any that do not meet the most basic of your requirements or budget. If in any doubt, speak directly to the ERP vendors as their experience and insight will prove essential in leading you to a future-proof system that absolutely fits the bill.

Key document

The knowledge you have gathered from your committee discussions and industry research will mean you are armed with the information you need to create the final RFP document. Its main goal is to communicate your firm's key assessment criteria to the vendors, covering a wide range of factors such as functionality, support, timescales and flexibility. Whilst most of these elements are likely to be important within your organisation, it is important to prioritise your specific needs and ascertain what matters most.

The RFP document should encourage vendors to develop and share their expertise and help identify where their technology should be able to make a positive difference to your firm's processes. Ask open-ended questions that cannot be answered with a single word response such as "yes" or "no". By requesting fuller statements with more detail, ERP suppliers will be more likely to give coherent and useful responses about how they are able to match your firm's requirements.

Paint a picture

As well as focusing on the finer detail of the intended installation, it's necessary to go to some lengths to describe the broader reasons behind why you are looking to invest in ERP. Through adding context, potential vendors will better understand your firm's motivations and reasons for change. It will also supplement the vendor's own understanding and knowledge of your industry, ultimately helping them provide a fresh or unique insight into your operation.

For instance, include details of your company's strategy and future plans so the vendor can visualise your aspirations for the system. If an element of the current technological make-up is no longer fit for purpose, or business processes have changed, be clear about it. Similarly, explain if your company is undergoing a period of expansion or transformation and requires a greater or different degree of control and visibility.

Cross referencing

When it comes to evaluating responses, the RFP should provide you with a straightforward way of analysing the suitability of an ERP system. Adopting an objective section-by-section marking structure and weighting each area and requirement by how important it is to your business will help when cross-referencing vendor feedback.

The chances of a single platform meeting absolutely every functional requirement you stipulate is slim, so it's important to rank your needs carefully by providing a list of 'mandatory' and 'desirable' features, which the vendor can use as quick reference to showcase their capabilities. It is also sensible to allow plenty of space for comments, so that vendors can supply supplementary information such as whether their system is fully or partially compliant with each requirement.

Decision time

Having issued the RFP, grant vendors enough time to respond accordingly and take your time reviewing the proposals they send back. The aim is to find a compatible partner for the long term interests of your firm – and this is something that cannot be rushed.

Encouraging an open dialogue during the negotiations will go a long way in promoting trust and openness and provide vendors with the chance to ask questions about your firm in return. Finally, having received and evaluated responses, don't forget to follow through on customer and business references, and allow time for system testing.

As an IT professional you will undoubtedly have a leading role to play in guiding your firm through an ERP installation. Ensuring you start off on the right foot with a detailed and focused RFP document will play an important part in the deployment of a strong, coherent business system that will bring company-wide benefits for years to come.

Fergus Gilmore is the managing director of Deltek UK, a provider of enterprise resource management (ERP), cloud and resource planning solutions.

Image: Flickr (Jean-Francois Phillips; Victor1558)