Decision anxiety when choosing ERP system

Making a decision about the choice of ERP systems often turns out to be more difficult than the customer had anticipated. Not because it is hard to find a system that meets the specified needs, but because the decision must be based on a comprehensive assessment of many criteria. And where the customer finds it difficult to evaluate the significance of these criteria against each other.  

For example, how important is the licence price compared to meeting the functional requirements? How important is it that the system covers all business processes compared to it being a young system built on a modern platform? How do you evaluate the significance of the vendor’s consulting capacity against the availability or absence of an active user association for the system? How do you value an open and flexible system that requires more installation time compared to a more limited system with relatively short installation? And how do you assess the need for or risk of an open and flexible system for a customer with very low understanding of process work and IT systems? And how do you evaluate a system presentation that landed badly with another system presentation that went well but where the functionality is lower?  

There are often a number of questions that create confusion and anxiety for the customer if no structure has been created in the issues at hand. Nor has the transition to a cloud-based world simplified the choice for the customer.  

The above are questions and issues we quite often encounter with customers who have contacted us for support before the final choice of system. However, it is difficult to start managing the decision process and restructuring the questions at the final stage of a completed procurement. The usual result is often that it becomes clear that several perspectives have not been considered early in the procurement and which are difficult to recover at the end of the procurement. And redoing the procurement is rarely an option. The reason for the situation is usually that the customer has focused 100% on putting together the functional requirements and has not considered other criteria that are at least as important when choosing both system and vendor.  

The list of appropriate decision criteria can be long but it can also vary from situation to situation. Some of the most common criteria are:  

• The system’s functional breadth and depth in standard execution
• The system’s openness/flexibility in architecture and APIs
• Access to packaged additional functions/modules or Apps
• Price structure for licences/usage rights both in the short and long term
• Capacity and competence of the vendor both short-term and long-term
• The vendor’s ability to maintain a high pace of system development (not least technically)
• Complexity and extent of the installation (i.e. what can the customer manage?)
• Possibilities for a gradual implementation instead of a Big Bang
• Availability of consulting support and partners nationally and internationally

Perhaps the most important criterion concerns which system has the greatest potential to realise the improvements and benefits that hopefully underpin the investment, and which will carry the customer into the future. And this very point is often given the least attention. For the simple reason that few customers have created a picture of how they want and can develop with new system support.  

The questions easily become many and it can be difficult to weigh one thing against another. However, there is help and support available on the market. Most important, however, is that the customer tries to gain insight into the change that may occur as a result of the new system, and the opportunities it offers in the longer term. It then becomes a little easier to weigh the cost of the investment against the value that can be created for the business. Comparing two systems and only discussing cheap and expensive and which has the most functions is rarely the right way forward to a decision.