The entry of multinational brands such as Microsoft and SAP into the mid-market enterprise resource planning (ERP) space in SA has brought the power of the brand into play and seriously affected the way companies arrive at their purchasing decisions.
It is a new and complex ball game in the mid-market ERP environment. The only common thread in today`s buying process is that all companies seem to want the same outcome - that the next system they buy is their last one!
Buying criteria fall into two classifications - "deal-breakers" and "deal-makers". There are just two of the former and many of the latter, and in this instance it is not a case of strength in numbers because the deal-breakers can override most of the deal-makers.
The deal-breakers are:
* Pricing, which must meet the prospective client`s expectations of fair value.
* Not achieving "the right fit" through total alignment with the prospective client`s business processes.
A dual-edged criterion is previous experience, because most prospective clients today are not first-time buyers or users, so their experience can be a deal-breaker if it has been negative, or a deal-maker if it was positive.
Deal-makers include:
* A "future-proof" solution. The ERP system needs to grow with the business and align with the future business plan. It needs to take into account that the rate of change over the past 10 years will double over the next 10. It should cater for the business information overload with the capability to provide data allowing management to make decisions based on exceptions while automating the routine day-to-day processes. The system must be capable of accommodating the multiple facilities and variances in processes that inevitably come with the acquisition of other companies. The design of agility into the ERP system at the outset is clearly an advantage in system "future-proofing".
It is a new and complex ball game in the mid-market ERP environment.
Errol Wills, MD of Lorge
* The delivery of relevant technology-driven solutions that provide demonstrated and sustained business advantages. This is the rock-solid approach that ERP industry leaders adopt, placing great emphasis on supplying their customers with the critical functionality that they need. The added value lies in building the desired functionality into the ERP system to establish bases from which the customers can gain individual competitive advantages in their markets. Too often software ideas become blurred purely because they are not sufficiently and critically evaluated on their relevance and potential to create value for the customer.
* The capability to vastly extend solutions through self-authored content and high levels of system-wide integration. Companies need to ensure the ERP system they evaluate firstly has the tools that will ensure the investment can be maximised through customisation, and secondly, object technologies and workflow technologies to ensure the right information is placed into the hands of the right decision-maker at the just right time.
* ERP system replacement know-how. This requires a business solutions provider with great experience of the process to minimise the costs and disruption of conversion, while maximising knowledge of the new system. Innovation and passion, tempered by risk management techniques, are qualities that will differentiate the company in its markets and ensure financial results that give a significant return on the ERP system investment. A solutions provider with a track record of achieving results is a distinct advantage.
* Consulting expertise, which is essential to stack the technology odds in favour of the purchaser. Applying technology in an ERP system is a strategic move that goes beyond the boundaries of a pure IT decision. By focusing on determining what technology is required to underpin the critical needs of the business, the best results are much more likely to be achieved.
* Vendors and business solutions providers that place emphasis on performance, reliability and the achievement of scalability as well as offering integrity, dedication and significant return on investment. To achieve scalability, the vendors and solution providers must have the ability to design the ERP system to accommodate simple, easy-to-implement upgrades that require few or, preferably, no customisations. Ideally there should be no limitations to accommodating user growth, whether it is numbers of employees, products, manufacturing lines or plants, branches, divisions, sales, customers or suppliers.
Although all of these criteria are relevant, purchasers generally now look to ways of simplifying the decision by applying deal-breaker criteria to act as a filter, or a means of either elevating or eliminating the solution offerings to them, while the deal-makers` criteria encapsulated under the power of the brand gives the purchaser the assurance when making the final buying decision.
The decision to implement or change an ERP system is one of the most important a business will make. It can take ordinary profits and ordinary growth into the extraordinary bracket, so it is most worthwhile adopting a structured process that will ensure, as far as is humanly possible, that the right selection is made.
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