The process of vendor shootout can be very risky and tough because the success of ERP depends on the initial selection phases. The software is designed to provide measurable business benefits and to improve ROI. The executives should prepare the project and then the buyer can tackle the problems of vendor evaluation and make a request for proposal.
Risks Involved in Vendor Shootout
1. Risk of buying software from a vendor having great marketing skills.
2. Risk of buying a solution which is not appropriate for the business type.
3. Buying expensive software and more modules which are not required by the organization.
4. Risk of buying software having architectural incompatibilities and selecting inefficient implementation partners.
How to Select From a Pool of ERP Vendors?
1. The selection of vendor can be made only after assessing the need of the organization. It is also advisable to know how other companies fared with the system and up-to date knowledge of various vendors and their capabilities is required.
2. To select a vendor one can look at the list of vendors and search for information on internet. One should not be biased by expert views and not overlook vendors that are new because many not-so-famous companies may provide a better solution at a low cost.
3. Vendor shootout is dependent on performance, ease of use, integration and maintenance of the software.
4. The negotiation on a deal can be made after a few rounds of meetings. The marketing executives can bargain on the future prospect of the software, on the background of the providers and the resources devoted for implementation. Concentrate only on the modules and features which are required by the company and do not get biased into buying modules which are not relevant for your business.
5. Shortlist the vendors that best suits the requirements of the company, and one can go for demonstrations and meet the implementation team of the vendor to assess the strengths of the team and compare it with other sellers.
6. Organize marathon session where the technical team, end users, the finance team, functional experts, business managers and stakeholders can meet the vendor and understand the critical needs of the system and how the solutions will be provided by the new system.
7. Asses the resources and analyze the excess resources which will be required during the process. Always keep at least two to three vendors in list before finalizing because it will help the buyer to negotiate better.
8. Ensure the vendor is aware of the needs of your company and one can ask for prototypes, which is necessary if the company follows unique business functionalities or if the data volume is large in some departments. Prototype also helps to assess the performance of hardware and plan accordingly before implementation.
9. The cost of implementation, time of project and impact on business should be analyzed before starting the process because when a company undergoes the process of automation - the everyday work may be hindered and this may delay work plans. The company should analyze which is the right time of implementation to start the project.