System Selection in the Digital Age
Over the years the process of system selection has changed. From the early days when any system was a new system, to the current Cloud platforms, selecting a system might be the most important decision a company makes. Today’s business management software is much more comprehensive than “the books of record.” “Enterprise Resource Management” (ERP) software has become the single source of truth for most companies. With embedded artificial intelligence (AI), ERP is now helping managers and staff become more efficient and make better decisions.
Reasons for Changing Systems
Companies looking for new business management software are typically in one of three categories:
- Outgrowing Entry Level Systems – Quickbooks, Xero and Sage 50 are great products for a small business or a startup. As companies grow they may hit limits of functionality, file sizes or user counts.
- Technology Obsolescence – Although the current system is feature rich it may lack the ability to interact with other systems or modern digital tools like AI. Sometimes the publisher has decided it is too expensive to upgrade to modern technology forcing a migration.
- Business Changes – Companies often expand operations due to competitive pressures, market changes, vertical integration, acquisitions and divestitures or other changes.
Generational Changes
With the retirement of baby boomers we also see companies that need more knowledge in the business management system to capture the institutional knowledge of the owner. Generations raised with computers and cell phones expect:
- Instant Access to Information – ERP is expected to be accessible on the mobile phone, tablet, or via the internet.
- Management by Exception – Rather than sifting through reports to find information, modern users expect dashboards, worklists and approval workflows.
- Fully Integrated Systems – Not only are all “modules” expected to work from a common set of data, companies expect to be integrated with suppliers and customers.
Selecting Your Next System
Most companies have managers and staff who have previously changed systems. Common ways to select a new system include:
- Expert Referrals – A CPA, industry association, or friendly competitor can share their expertise to recommend one or more potential systems.
- Online Selection Tools – Websites with a series of questions determine “potential future systems.” Sometimes these sites have extensive lists of features and functions and match those to software to determine which packages will meet your requirements. Some provide good advice while others are selling your information to potential solution providers.
- Request for Proposals (RFP) – There are service providers who have developed extensive requirements documents similar to the online tools. These are sent to potential service providers to submit their solutions along with estimates of costs.
Hiring an Expert
Companies often go to their CPA or current service provider to discuss concerns about their current system. These “trusted advisors” often have your best interest in mind. Most “value added resellers” of ERP systems now carry multiple products and have developed migration programs from “legacy” to modern cloud platforms.
More importantly, companies who regularly work on software implementations and migrations have processes which ensure success. The specific methodology is less important than understanding and following a process which mitigates risk. For system selection these methodologies include:
- Discovery – Ensuring the key business processes and business capabilities are understood.
- Visioning – Helping the business owners, managers and staff envision a better future state.
- Selection – Reviewing potential future systems for capability match and potential future value.
- Contracting – Review and selection licensing, deployment, and implementation methods.
- Licensing – Purchasing perpetual licenses may still be an option, but many systems are subscribed. Subscription costs may be by user, transaction volume or component functionality.
- Deployment – You may still be able to install software on your own server, but some systems are only available in the cloud. Some have hybrid models with manufacturing or WMS on premises and core ERP in the cloud.
- Implementation – How much involvement you have in the implementation is a choice. Will you prepare your data for conversion? Today’s solution providers also offer different consumption models for their services. Will you pay by the hour, a fixed fee, or subscribe for professional services?
Scenario Based Selection
As systems have evolved so have selection methodologies. Many ERP partners have chosen not too utilize online sites or reply to RFPs for a variety of reasons. As modern systems have tons of third party enhancements and customization capabilities, most providers will say yes to almost any question on an RFP.
At I-BN, we use the information gathered during the discovery and visioning phases to develop scenarios for system demonstrations. Using transaction from your operations, we create 3 or 4 scenarios that represent approximately 80% of your key business requirements. Solution providers are required to demonstrate their systems with the same data you provide. This process makes your evaluation more consistent, recognizable and equivalent..
Using a Professional Advocate
A professional system selection advocate provides an independent source of process and advice for a company seeking a new business management system. There are many sources of System Selection Advocates.
- Many of the larger solution providers have a dedicated group of professionals who work independently from their “sales” organizations and help their clients through a systems transition.
- I-Business Network has a roster of independent advocates. that are former business owners or solution provider executives.
- CPA firms have Client Advisory Services (CAS) departments that provide outsourced services and many have expertise in system selection.
Choosing a System Selection Professional
- Your current solution provider should know your business and current systems capabilities. They may also have incentives or restrictions on which systems they can recommend.
- Similarly a CPA CAS department has access to your current accountant who knows your business. For better or worse, they may also be inclined to suggest products they support.
- I-BN works with many solution providers and CPA firms both independently and as a subcontractor. We do not have a team of implementers, so our knowledge is not as deep in any one system as a partner for a particular solution.
I-BN as your System Selection Advocate
I-Business Network is not always the best choice for your System Selection project. We suggest you start with a free System Selection Exploration to see if we are a good fit. I-BN matches customers with the advocate best suited for their selection. For example, a manufacturer of discrete items is very different than an engineer to order or continuous flow operation. A $5 million operation is quite different than a $50 million company or $500 million enterprise.
I-BN systems selection projects are fixed fee based upon the size and complexity of your organization. Larger organizations tend to have more decision makers, more complex process, integration requirements and other complexities. Using our methodology and understanding your organization before we contract provides cost certainty.
We take cultural factors into our process. Some companies have strong IT departments and want ownership of their systems investments. Other organizations prefer outsourcing and full service solution providers. Similarly, some companies have more experience with systems transitions and can provide internal resources for report and query development while others require everything “out-of-the-box.” Our executives consider these and other qualitative factors into our matching of service providers with your company.
Although we can continue service beyond the selection in an advisory role, we do not perform implementations. I-BN is not a reseller of any software. Accordingly, we will not provide traditional implementation services such as data conversion, configuration or support services post selection.