ERP Package Selection A Well Rounded Evaluationspearmc.com/.../02/ERP-Package-Selection-A-Well-Rounded-Evaluatio… · ERP Package Selection A Well Rounded Evaluation Prepared by:

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ERP Package SelectionA Well Rounded Evaluation

Prepared by:

Stephen Coco

Managing Director

SpearMC Consulting

Selection should consider many factors. Align the selection with your long term strategy.

Session ID#: 103290

Agenda

About SpearMC and Your Presenter

Introduction

How a Selection Typically Occurs

Introduction of Evaluation Criteria

Using Evaluation Criteria

For Selection

For Negotiation

Third Party Information

How to get to an Answer

Questions

About SpearMC and Your Presenter

© 2015 SpearMC Consulting

Founded in 2004, SpearMC is a technology and professional services firm specializing in

PeopleSoft Financials and Supply Chain Management

PeopleSoft Human Capital Management and Payroll

ERP Architecture and Application Development

Project and Program Management (PMO)

Change Management

ERP Training

Mobile Technology

About SpearMC


We focus on local market delivery and capability development in line with industry focus areas unique to the regions we serve.

About SpearMC

Our local and well-connected network of top-tier business analysts, technical leads, developers and project managers keep travel cost to a minimum.


Industry focus areas include:

Energy

Transportation

Healthcare/Biotech

Government

Media/Technology

Consumer Products

Financial Services

Higher Education

About SpearMC

Services and Competencies.



Technology and Business Consulting

Full-service ERP and BI Selection, Implementation and Integration

o PeopleSoft

o JD Edwards

o Oracle EBS

o Hyperion

o Dynamics AX

ERP Training

IT Transformation and Strategy

Infrastructure and Architecture

ERP Application Development

Capability Assessment

Services and Competencies


Program and Project Management

Business Transformation

Project Management Office

Project Portfolio Management

Change Management

Operations Improvement (Six Sigma, Lean)

CIO and CTO Advisory Services

Strategy for Pricing and Revenue Enhancement

Services and Competencies


Stephen CocoManaging [email protected]

Your Presenter

22+ Years experience managing global, large scale ERP implementations, mergers/acquisitions and business transformations

Financial and operational expertise used to drive an increase in client’s financial performance and deliver operational efficiencies.

Managed full program/ project lifecycle for multiple global clients. Expertise implementing financial applications, including Six Sigma design and

Sarbanes-Oxley controls.

Introduction

ERP Selection Journey

■ ERP Selection is a vital process a company must employ to acquire modern information technology that will drive business process and business performance improvement.

■ An ERP Selection project is a key component to a successful ERP implementation. Implementation projects that fail to attain expectations can be traced back to poorly executed ERP Selection projects.

■ Business process definition (both current state and future state) drive evaluation projects. Your objectives should drive the required ERP selection criteria and align business processes in your industry.

Is Functional Fit and Cost the Only Criteria?

■ ERP Selection Projects Evaluate Vendors Based on a Proven Set of Criteria

▪ Software functional fit to the future state business process

needs

▪ Vendor’s presence and strength in our client’s industry

▪ Vendor’s technology direction

▪ Vendor’s support ecosystem

▪ Total cost of ownership

Is the Selection Process Like Shopping at the Store?

■ The Software Selection Process Should Deliver Results

▪ Identification of vendors

▪ A vendor interview process

▪ Development of “evaluation drivers”

▪ Decision criteria table

▪ Process driven demonstration scripts

▪ A vendor product presentation and evaluation process

▪ Evaluation vendor implementation capabilities

▪ Vendor price and contract negotiations

Determine Your Strategic Objectives

■ Opportunistic Strategy

■ Rear-view Mirror

■ Personality based organization

■ Unlimited Flexibility

■ Loose Federation of Business

■ Function / sub-function (piecemeal)

view

Current State Desired State

■ Calculated strategy

■ Planning/forecasting

■ Consistent processes and metrics

■ Common practice

▪ Discipline & rigor

■ Integrated Enterprise

■ Systems /holistic view

How a Selection Occurs

This is a subtitle or bulleted list

A System Evaluation Methodology that is broken down by phases and threads. The

purpose of the phases and threads is to ensure interlocking checks and balances for every

aspect of the selection process.

Phases

Systems Evaluation Methodology

Current Needs

Project Management

Business Processes and Applications

Information Technology and Infrastructure

Change Management

Th

read

s

Visioning &

Requirements

Definition

Vendor

Analysis and

Selection

Procurement

Support

Scoping and

Planning

Project organization • risk management • planning • monitoring •

communication • budgeting • staffing • quality assurance

Business processes and enabling systems requirements• improve business

performance • benefits • business process modeling

Defining technology requirements and the evaluation and selection of vendors

capable of meeting the identified requirements

Leadership commitment • organizational design and change readiness

•performance measurement

EXAMPLE - Process Segmentation

• Maintain customer Account Info

• Suggest Products/ Services

• Solution Design and Capture Orders

• Configure and Calculate Order Price

• Manage Back Orders

• gATP Planning

• gATP check execution

• Internet Sales

• Call centers

• E-Business

• Process Inquiries

• Manage and Track Orders

• Process Complaints

• Bill revenue

• Close loop on sales channels with Mktg. and SCM

• Manage Customer Credit

• Manage Rebates

• Manage Chargebacks

• Provide Field Support and Service

• Manage Warranties

• Manage Repairs

• Manage Returns and Exchanges

• Process Receipts

• Process Manual Receipts

• Manage Collections

• Manage Deductions

Quote to Cash ProcessInvestment/

Process Design

Focus

Strive for

“Best in Class”

Strive for

Low Cost

StrategicDifferentiators

InfrastructuralProcesses

CoreProcesses

EXAMPLE – Demo Script

StepTest

Condition Execution Steps Results Comments1 Refund of Gift Cards Exceeds Expectations

Met Expectations Below Expectations Not Acceptable

2 Even Exchange A) Exchange same itemB) Exchange two different itemsC) Exchange with different tax rates

Exceeds Expectations Met Expectations Below Expectations Not Acceptable

3 Price Adjustment Exceeds Expectations Met Expectations Below Expectations Not Acceptable

4 Uneven Exchange A) Return of buy 3/4th free but only return of 3

B) Exchange with different tax ratesC) 2nd exchange for same customer with

refund due (will this pull original payment method)

Exceeds Expectations Met Expectations Below Expectations Not Acceptable

Script Category: Return TransactionsObjective: To verify that refund transactions are processed accurately.

Vendor:______________________

Reviewed by:__________________________ Reviewed date:____________________________

Evaluation Criteria


Evaluation Criteria and Weighting■ Company Profile

▪ Background: Rate the general information describing the number of years in business,

global coverage, software revenue vs. service revenue.

▪ Partnering: Rate the companies strategy on partnering with customers and in the your

industry.

▪ Stability: Rate the companies financial performance and strength in the market place.

▪ Product Strategy / Direction: Software offering by module and platform. Measure and

rate the intended direction and functionality for your. The software version they want to

install at ABC Company and the intended upgrade path.

▪ Industry Focus: Rate the companies commitment to the your industry and your current

and intended strategy around the supporting software solution.

▪ your Customers: Measure and rate the number of your companies that use your software

and the percentage of vanilla software vs. custom.

▪ Executive Commitment: Rate the partnering strategy and what is the software companies

executive commitment to ABC Company’s transformation.

▪ Global Footprint: Evaluate where the software company is imbedded around the globe.

Include sales offices vs. product development and support.

Evaluation Criteria and Weighting

• Product Functionality

– General Supply Chain Requirements: Measure the overall rating of the general

supply chain requirements defined in the RFI. What was the response by the

vendor and who did the functionality perform in the demonstration.

– Key/ Signature Processes/ Sub Processes: Measure and rate the key process

and sub process functionality that makes ABC Company unique as a wholesale

distributor of semiconductors. Some examples include mass maintenance,

quoting, pricing, ship and debit.

– Unique requirements specific to ABC Company but required: Measure and rate

the key requirements that are specific to ABC Company, but necessary for

everyday business performance.

Evaluation Criteria and Weighting• Technology

– Scalability: Measure and rate the software providers ability to scale to the large volume required by

the your semiconductor business. The rating need to include number of users, transaction volumes

and number of data records

– Architecture: Measure and rate the architecture environments and the software solution(s) that work

in that setting. Does that fit with the current ABC Company architecture (Sun with a Oracle

database)?

– Infrastructure: Measure and rate based on the required infrastructure requirements and how that fits

with ABC Company current footprint.

– Tools: Measure and rate the tools that are required to install and run the software solutions.

– Development Tools: Measure and rate the ease of use for developing in or along side the respective

software. What do they recommend to work with their software.

– Integration: Measure and rate the interface architecture and standards they support.

– Security: Measure and rate the security controls for screen, user, roles, etc.

– Workflow: Measure and rate workflow capability and application.

– Compliance SOX: Measure and rate the Sarbanes-Oxley compliance capability and monitoring of

the software and intended company direction.

Evaluation Criteria and Weighting• Implementation

– Number of implementations ABC Company’s size: Evaluate the number of

implementations and success rate of software transformations equal to ABC

Company’s size.

– Number of implementations in your industry: Evaluate the number of successful

implementations in the your industry. Specify if specific to semiconductor

distributors.

– Methodology: Measure and rate the method for implementing the vendors

software, the version, the development required and the upgrade path.

– Tools: Rate the tools required to implement the software, run the software and

upgrade the software.

– Resource types and availability: Measure and rate the resources typically

required to implement and run the software.

– On time successful implementations: Rate the number of on-time

implementations. Include a review of which modules implemented and the

global footprint.

Evaluation Criteria and Weighting• Total Cost of Ownership

– Benefits: Measure and rate the benefits projected by ABC Company and/or the

software vendor. Include the direct and indirect benefits.

– Payback: Measure the payback timeline. Include development cost and factor

in the next upgrade.

– Total cost including run: Measure the total cost including 2 years of run and the

next upgrade of the software. You may want to factor in strategic company

direction such as mergers, acquisitions, divestitures, etc.

– Cost of upgrade: Measure the cost of upgrade and alignment of the software

vendor product strategy with ABC Company’s future needs.

– Cost of upgrade with modification: Measure any cost that includes development

and integration of modifications

This is a slide title that can be up to two lines of text without losing readability

■ ERP Support

▪ ERP vendors have a number of ways to support their client. The larger

firms have significant support ecosystems to support their market.

Buyers should evaluate all of their support systems including the

following:

— Consulting organization

— Implementation methodology

— Education

— ERP implementation methodology

— Maintenance and phone support

— User groups

— Partner network


Drivers and Evaluation Criteria Weighting

Company Profile

Background, Partnering, Stability, Product strategy/ direction, Industry Focus, Consumer Business

Customers, Executive Commitment, Global Footprint

20%

Product Functionality

General Supply Chain Requirements, Key/ Signature Processes/ Sub Processes, Unique requirements

specific to ABC Company but required

20%

Product Demonstrations

Demo 1 & 2 combined5%

Technology

Scalability, Architecture, Infrastructure, Tools, Development Tools, Integration, Security, Workflow,

Compliance SOX Support

10%

Implementation# of this size, # in MFG and Consumer Business, Methodology, Tools, Resource types and availability, On

time successful implementations

25%

Cost of OwnershipBenefits, Payback , Total cost including run, Cost of upgrade, Cost of upgrade with modification

20%


Drivers and

Evaluation

Criteria

Company

Profile

• Background

• Partnering

• Stability

• Product

strategy/

direction

• Industry Focus

• WD Customers

• Executive

Commitment

• Global

Footprint

Product

Functionality

• General Supply

Chain

Requirements

• Key/ Signature

Processes/ Sub

Processes

• Unique

requirements

specific to ABC

Company but

required

Technology

• Scalability

• Architecture

• Infrastructure

• Tools

• Development

Tools

• Integration

• Security

• Workflow

• Compliance

SOX

• Support

Implementation

• # of this size

• # in your

• Methodology

• Tools

• Resource types

and availability

• On time

successful

implementations

Cost of

Ownership

• Benefits

• Payback

• Total cost

including run

• Cost of

upgrade

• Cost of

upgrade with

modification

Total

RFI 20% 50% 20% 10% 100%

Vendor Demos 5% 70% 15% 10% 100%

Reference

Checks

5% 15% 20% 50% 10% 100%

Site Visits 5% 15% 25% 50% 5% 100%

Business Case 5% 5% 90% 100%

Using Evaluation Criteria


Strategy – Functions – Demo - Rank

Ability to take an order?Revenue

recognition

occurs this

way?

What major gaps exist? Does

the solution support future

direction?

What is need to grow

the company?

What option best suits our

Companies short and long term

needs?

What is the right fit for our business?

DetermineBusiness Strategy and

Functional Needs

Demo Strategic Functionality

Rank how the solution will work for your business

Demonstrate the System and how it supports our

business

Based on the vision, overall business objectives, and functional needs………………………..

What makes our

company unique?

Software Vendor Ranking

Drivers and

Evaluation CriteriaWeight Joe’s EZ Software

Oracle JD

Edwards

EnterpriseOne

(E1)

Winning

Highlights

Company Profile 20% 3 7

$35.6 billion vs. $2.8 billion sales

36 vs. 11 years in business

13% vs. 6% market share (2012)

6000+ E1 vs. 2500 M3 installations

Product Functionality 20% 5 5 Both can satisfy ABC”s business requirements

M3 pre-configured Strategic Mgt reporting

E1 lag & consensus forecasting capabilities

Product Demonstrations 5% 7 3 Related well to ABC Company business

Technology 10% 5 5

M3 is easier to support than E1

Faster turn-around of ABC user requests

User level productivity & personalization

Enterprise-wide document search capability

Import / Export data with validations

Implementation 25% 4 6 6000+ E1 vs. 2000+ M3 installations

300+ E1 vs. x M3 projected 2013 new customers

Cost of Ownership 20% 7 3 Integration cost equal

Software & Maintenance cost 50% more

$185K Difference in Software & Integration

Total 100% 4.85 5.15

Rank 2 1

Using Third Party Information


WHAT ABOUT THEM?

■ Gartner’s magic quadrant

■ Tier 1 vendors vs Tier 2

▪ Understand the difference

▪ Which is the better investment for

you business

■ Quadrant breakdown

▪ Leaders

▪ Challengers

▪ Visionaries

▪ Niche Players

■ Is up and to the right correct for our business?

■ Use independent resources

What did the Experts say: 2012 ERP Magic Quadrant

Magic Quadrant Figure 1. Magic Quadrant for Single-Instance ERP for Product-Centric Midmarket Companies

Source: Gartner (June 2012)

Challengers Broad and mature ERP system Strong international presence Can be configured to midmarket companies Use of latest technologies Will not disappear as a software or vendor Stable consulting and support structure Satisfied customers and industry base

Niche Players Solution is functionally adequate Can be good solution for many seeking ERP systems Lack the full depth and breadth of the robustness of

functionality No vision for attaining the next level of next-

generation ERP product Lack broad experience of new ERP clients May have lack of skilled consulting resources

Getting the Answer


How do we decide?

■ Scoring your vendors using the criteria

▪ More than function and cost

■ Third party analysis should be considered

▪ Gartner’s magic quadrant

— Quadrant breakdown and what that means to our business

■ Planning for the next steps

▪ Time to negotiate

▪ A high level view of the implementation/transformation

■ What can we commit to?

▪ Not just the software solution, but also the commitment to

— Change for the better: short and long term

20 % Unique Functional and

Technical Fit for ABC

• Maturity of Company and Solution

• Current number of Product installations

• Project number of Installations

• Resources for Support

• Product roadmap

External Analysis and Expertise

Method and Implementation

Approach

Selected Vendor for

ABC Company?

• Function fit for current & future business

• Capability and ease of use

• Global capability• Business

transformation capability

• Tools and Accelerators

• Resources for Implementation

The right answer for ABC Company is?

Key Discussion Points for Vendor Ranking

Questions


Get in touch

Stephen CocoManaging Director

[email protected]

630-215-7115

www.SpearMC.com

Please complete the session evaluationWe appreciate your feedback and insight

Session ID#: 103290

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