Manufacturers Still Taking Same Flawed Approach To ERP Evaluation & Selection

Manufacturers Still Taking Same Flawed Approach To ERP Evaluation & Selection

As an advisor to manufacturers, it is frustrating to see so many still getting caught in “traps” that certain ERP vendors set. This has been happening in manufacturing for a long time, unfortunately. Here is what we believe the traps are and how to avoid them.

To start, surveys conducted of small & mid-sized manufacturers reveal over 70% that have installed an ERP system have been highly frustrated by the vendor selection and implementation experience. This is consistent with our findings. We have yet to meet a manufacturer that was thoroughly pleased with how things went, which says a lot about why the word “failure” is frequently associated with ERP implementations.

These are manufacturer complaints we commonly hear. Any sound familiar?:

  • “The vendor assured us we wouldn’t have to change our business processes to suit their software.”
  • “We were promised that training wouldn’t be a lengthy process.”
  • “Finance and IT selected our ERP software. They didn’t include the people who actually use the software the most.”
  • “The demo was very impressive, but in hindsight the vendor made things look so much easier than they are in reality.”

Maybe the toughest part of determining why an ERP implementation went sideways is figuring out where most of the fault lies. Sometimes it’s the vendor, other times the implementation VAR, and certainly other times the manufacturer for poor planning. Whichever it is, the main reason usually boils down to mismatched expectations being set about how well the software fits with a manufacturer’s current business processes or can adapt when changes to these processes are made.

And this leads to our main point: No ERP system should be selected without some level of assistance from a qualified, objective source that brings no biases or financial conflict of interest to the process. To do otherwise is simply asking for trouble. The numbers speak for themselves in terms of failures, user dissatisfaction levels, unrealized ROI, etc.

A few more things to keep in mind:

  1. ERP vendors are much more likely to tell you what you want to hear rather than what you need to know.
  2. Systems like Epicor were originally designed for larger manufacturers and rarely operate well out of the box for smaller manufacturers.
  3. ERP vendors invest a lot of time in discovery and developing exactly what a potential client wants to see as part of a demo. It’s a show. It’s meant to look slick. And it rarely translates to your day-to-day operating environment.
  4. Implementation consultants who are paid by software vendors should not be in the ERP software selection business, period. It’s a conflict of interest.

Any manufacturer making ERP-related decisions should ask itself what can be done to eliminate as much bias as possible, including internal biases and agendas. Keeping everyone honest by asking the tough questions and challenging assertions is essential to a successful outcome. Unfortunately, this is often not done (thoroughly) because no independent resource is invited in to do it. And when objectivity is removed from something complicated like ERP evaluation and selection, the likelihood of a less-than-satisfactory outcome becomes far greater.

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