erp package selection a well rounded evaluation · erp selection journey erp selection is a vital...
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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
© 2015 SpearMC Consulting
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.
© 2015 SpearMC Consulting
Industry focus areas include:
Energy
Transportation
Healthcare/Biotech
Government
Media/Technology
Consumer Products
Financial Services
Higher Education
About SpearMC
Services and Competencies.
© 2015 SpearMC Consulting
© 2015 SpearMC Consulting
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
© 2015 SpearMC Consulting
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
© 2015 SpearMC Consulting
Stephen CocoManaging DirectorStephen.Coco@spearmc.com630-215-7115www.SpearMC.com
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
This is a subtitle or bulleted list
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
Evaluation Criteria and Weighting
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%
Evaluation Criteria and Weighting
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
This is a subtitle or bulleted list
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
This is a subtitle or bulleted list
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
This is a subtitle or bulleted list
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
This is a subtitle or bulleted list
Get in touch
Stephen CocoManaging Director
Stephen.Coco@spearmc.com
630-215-7115
www.SpearMC.com
Please complete the session evaluationWe appreciate your feedback and insight
Session ID#: 103290
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