If you’ve spent any time at all shopping for an Enterprise Resource Planning(ERP) software package, you’ve probably been busily comparing the “features and benefits” inherent in the various systems. But shopping for an ERP system this way is putting the cart before the horse.
“If a CEO divorces himself from the ERP selection, the company is asking fortrouble,” says Lee Hagen, executive vice president of sales at MIS Group, a leading technology services provider. “CEOs are visionaries, or they wouldn’t bedoing what they’re doing. They are typically not afraid to make decisions. But they also typically don’t have a true understanding of what a good ERP system can do for them.”
Smart Business spoke with Hagen about how executives can make an intelligent ERP choice for their company.
How do most executives go about selectingan ERP system?
ERP systems are universally purchased because lower-level employees have some kind of accounting problem. Or maybe the operations guy is hitting asnag, so they start clamoring for a system that will do the things they want done. They interview people about potential systems, and they examine an endless list of features and functions. And it becomes a case of the Indians leading the tribe instead of the chief. It almost never works, because the CEO is not invested. He can’t be, because the system hasn’t been purchased to support his vision.
How can a CEO determine if an ERP systemwill support his vision for the company?
A few years back, the Gartner Groupsurveyed 1,000 companies who bought ERP software, and only 70 to 80 percent were happy with the benefits or value they received. Why is that? Because most CEOs have no idea why they even purchased the system in the first place.
To find out whether an ERP system will support your goals, you can follow a few simple steps.
- Make an honest evaluation of your company.
Ask yourself, ‘What are we good at? What are we not so good at? What do our competitors do better than we do?’ Make a list of the things you do well and change the rest.
- Consider the future.
Ask yourself, ‘Where do we want to be in one, three or five years?’ As the CEO, you have a vision. Unless you inherited the company and are simply maintaining someone else’s vision, you know where you want to be a year from now or two years from now. That vision should be on paper. And that vision must be clear. It also must be verbalized to your team, who can’t embrace it unless they hear it.
- Construct a game plan.
Once you have your vision outlined, ask yourself, ‘How do I accomplish this?’ You must have the right vehicle in place to get you where you want to go.
Once I have a game plan, what’s next?
With ERP, you’re buying more than just a software package. You’re engaging in a long-term relationship with a business partner. That business partner should be invested in supporting the vision you have for your company. Every provider says it cares, but it’s essential to find out who really does. Interview the companies that say they have something to offer. Start with the top people. Askthem, ‘How can your system help us accomplish our goals?’ If that company’s representatives cannot give you an adequate answer, move on to the next. The onus should be on the software provider to become a part of your team’s vision through the implementation of their ERP product.
You are the one who knows where your company needs to go. You may not know what decision support tools will help you get there, but that’s where the provider steps in. An ERP product exists to enable you to get the right information at the right time so you can make the right decisions for your company.
Why should the provider care about myvision for the company?
A good service provider isn’t just looking for a quick sale. It also recognizes the value of cultivating a long-term customer relationship. If you say, ‘Oh, I bought the product, but I really have no idea what it does,’ it’s not much of a coup for the provider. On the other hand, if you say, ‘I had this vision, but I didn’thave the tools to get there; but with the help of your company, my dream became a reality.’ Lower-level staffers might be satisfied with an ERP system, but when a CEO gets the tools needed to see a vision come to pass, that leader becomes a customer for life.
LEE HAGEN is the executive vice president of sales for MIS Group. Reach him at (866) 467-4181 or [email protected].
