How to select an ERP vendor

Selecting a new vendor for your ERP system is an activity that needs several steps. It requires significant throughput time to conduct all the steps.

However, a choice for a new ERP system is a choice for several years. Therefore, it is important that there is a strategic and cultural fit between your company and your vendor. Q7 Consulting recommends the following steps:

Business Case – What is the business reasoning why we do this? How does this fit with the overall business and IT strategy?

Internal Information Gathering – How do we do things now? What requirements need to be covered and what do we currently not have yet in place? What game changers do we foresee or desire?

Request for Information (RFI) – What vendors are potential vendors who can cover our needs?

Request for Proposal (RFP) –  How do the final quotations look like with shortlisted vendors?

Conduct Customer reference visits – How do customers of potential vendors perceive the services/product?

Round of rough price negotiations –  RFP’s are always negotiable; can we improve further the pricing?

Vendor Audit – For compliance reasons, a Quality Audit might be required, but it is a good practice to conduct this audit by default.

Vendor Evaluation and Selection – What vendor or product best meets our needs?

Contract Negotiation – Negotiate the contracts (Master Agreement, Service Agreement(s) and other sub-agreements like Service Level Agreement (SLA), Quality Agreement, etc.)

Periodical Review – Sit at least every half year around the table with your vendor, review the initial business case and the quality of services.