Selecting a new business management solution can be a daunting task. If you've been thinking about implementing a new Enterprise Resource Planning (ERP) system but felt overwhelmed at the options or where to begin, we have the solution for you!

1. Pick Your Next
ERP System in 6 Steps
…an e-book by

2. Foreword
Contrary to what you may have been told, ERP is not only for large
organizations. As SMB operations become more complex, it is essential
for the software solutions to evolve and also become more complex,
making the adoption of a comprehensive ERP system a necessity.
If your Small to Medium Sized Business (SMB) is drowning in paperwork
and bad information from disparate systems, it might be ready to
implement an ERP (enterprise resource planning) System. You may be
overwhelmed by not only the software choices, but the best practices in
choosing a new ERP system.
There are many benefits to ERP - probably the most important is the
ability to get real-time information across the company from one system.
No more out-of-date spreadsheets from various departments that take
hours to dissect.
Another great benefit, especially for high-volume organizations, is the
capability to improve on-time deliveries and greater inventory control and
visibility. And improved efficiencies across the organization help your
company become lean operations that can better compete in an ever-
growing global marketplace.
In this e-book, Pick Your Next ERP System in 6 Steps, we’ll outline the
six steps you should take to ensure a successful selection and
implementation. From assembling your cross-functional ERP team to
finally selecting your ERP system, we’ll walk you through each step of the
process.
 The Encaptis Group
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Burnaby, BC V5G 4C9
Phone: 1-866-277-2736
www.encaptis.com

3. 1
H O W T O P I C K Y O U R N E X T E R P S Y S T E M I N 6 S T E P S
Chapter
Assemble Your Cross-Functional Team of Experts
Many companies believe an ERP project should
start with the IT team. While you certainly need
IT’s input and support, especially as it relates to
network and hardware issues, it’s really a cross-
functional process.
Key stakeholders from areas such as accounting,
purchasing and inventory, operations, IT and all
other instrumental areas of your business should
be tapped, as well as a member of the Executive
Management to keep the project focused, on task
and on budget.
The team will be responsible for a number of important tasks:
 Researching, evaluating and selecting the ERP system
 Setting specific goals and objectives
 Communicating the need for ERP and its benefits throughout the company
 Collaborating with the ERP vendor to create and execute the implementation plan
Keep the team to 5-8 members. Each team member should be responsible for getting
feedback from others in their business units and providing it to the team. And remember, the
team members don’t have to be the managers – but they should be well-respected, effective
communicators with a good understanding of how the current processes feed into the overall
company goals.
Be sure not to discount less experienced or junior team members. Employees with limited or
outside background can give valuable input into a process or system based on experience
with the systems or processes they have recently learned, or with systems they have used at
other organizations.
Once you establish your team, you are ready to move on to the next step, Assessing Your
ERP Readiness, which we will cover in the next chapter.
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4. 2
Chapter
Assessing Your Company’s ERP Readiness
So you’ve put together your ERP Selection Team
and think your company is ready to implement ERP
(enterprise resource planning), but are you sure?
While an ERP implementation can be a key element
of your company’s growth, if you’re not truly ready, it
can be a costly and time consuming undertaking. To
stay on time and in budget, it is critical to do your due
diligence to ensure that your entire organization is
prepared before making your decision.
Upfront preparation, clearly defining expectations
and goals, and doing your due diligence help to
ensure that your ERP implementation is a success.
In this chapter, we focus on assessing your company’s ERP readiness, and provide a list of
questions that can be used to guide you through the decision process.
There are many things to consider when reviewing and implementing ERP systems.
Assessing your company’s readiness is just one step, but an important one. Having a good
survey of the organization’s preparedness to undertake such a big project helps you to
predict whether or not it will be successful.
For instance, if your executives are not convinced of the need for ERP, then it is unlikely that
they will be supportive if issues arise during the selections process or implementation.
Similarly, if key user groups aren’t willing to make changes, then their use of the new system
will be limited, deeming the implementation a failure. And if goals, expectations and
anticipated ROI are not clearly defined, then it’s not possible to measure the success of the
overall project.
To help you assess your organization’s readiness for ERP implementation, we’ve compiled a
list of questions you should be able to answer positively and thoroughly before embarking on
your project.
1. What is your motivation for implementing ERP? Is there pressure across the
organization? Without pressure throughout the company, there will be little motivation
for change.
2. Are your business processes standardized across all departments and offices?
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5. 3. Have key stakeholders documented specific needs and wishes? Are all business
requirements documented in one place? Are they prioritized?
4. Has an ERP strategy and change management been fully identified and
documented?
5. Has your company had significant turmoil in the past few years? Examples include
management change, layoffs, other IT projects, etc. Are you still recovering from it?
6. Does the ERP implementation have executive sponsorship?
7. Have you assembled your selection and implementation team? Have you appointed a
Project Leader?
8. Have you identified early system adoption users (initial key users)? Early adoption is
critical to the success of your implementation.
9. Do you have documented the business case, assumptions and anticipated ROI?
10. Have you outlined your key performance indicators (measurements of success)?
11. Is the company culture open to the project or will key stakeholders have to be
convinced of its usefulness and ROI?
12. Is your ERP Implementation project fully funded - including miscellaneous and
unexpected expenses (plan for about 10% for additional programming and
miscellaneous expenses)?
13. Is your data ERP-ready? The data going in is only
as good as the data coming out.
Implementing ERP can be a great way to help your
company compete on a national or global scale, if
implemented properly – start to finish. Don’t underestimate
the importance of assessing your company’s readiness,
and if you’re not ready, start preparing for the future now!
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6. 3
Chapter
Defining the Business Requirements
Oftentimes, an executive will walk into the IT person’s
office and say, “We need ERP.” The IT person goes
about lining up several ERP providers, interviews them
on their software functionality (not necessarily
considering user requirements), and if it seems to fit
and is reasonably priced, they select their vendor and
schedule implementation. As we explained in
Assessing Your Company’s ERP Readiness, this
sets up the company up for failure by not fully exploring
several areas and processes related to the ERP
implementation.
Considering the high failure rate of ERP implementations, you want to make sure you have
carefully considered all aspects of the organization and the impact the ERP implementation
will have. With proper foresight and planning, ERP does not have to be a failure and in fact,
is key to many companies successfully expanding their business on a national or global
scale.
In chapter 3, we walk you through Defining the Business Requirements when selecting an
ERP system. We will help you define the areas where you expect to receive benefits, as well
as identify budgetary constraints. Correctly outlining these areas upfront will assist you when
you are ready to review and qualify solutions.
The most important question to ask yourself and others is, “What do you want to achieve
with ERP?” Getting a clearly defined answer will help you have a good understanding of
what your organization hopes to accomplish with an ERP implementation. Without this key
answer, you won’t be able to accurately define its success later.
Here are two questions you should ask your team:
What is the business objective for implementing ERP?
Have we defined the strategy?
If you cannot clearly and succinctly answer these questions,
it is unlikely that you will achieve ERP success. The point of
the strategy is to define the objectives of the ERP
implementation and define the measurements of success.
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7. There can be a number of objectives, each with its own measurement of success:
 Is your organization trying to standardize operations across the company (and
perhaps many offices and geographic locations)?
 Do you want to improve customer service by improved fill rates and service levels?
 Does your company need improved visibility throughout the organization?
 Are you already using ERP but need to upgrade to a more robust system?
 Do you want to reduce overhead by streamlining operations?
How will the ERP implementation contribute to the individual objectives?
Without understanding how the ERP implementation
contributes to the individual objectives, it will be difficult to
measure success at some point in the future. Don’t forget
that some objectives may not have a measurable
contribution. Things like improved visibility or reduced
business risk may not be quantifiable in dollars but they
do contribute to the overall success of the company and
the ERP implementation. Here are a few questions to consider:
 Have you identified the objectives you are trying to achieve?
 Can you put a value on the objective, if successful?
 Is it possible to achieve the objective without ERP?
 Is there a deadline that your organization is trying to meet with the ERP
implementation?
Once you clearly document the answers to the questions above, you will be able to better
identify if an ERP system is going to benefit your company. If you decide ERP is indeed right
for your company, you will be able to move on to the next step, Review & Qualify Software
Solutions, which we will discuss in the next chapter.
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8. 4
Chapter
Review and Qualify ERP Solutions
In this chapter, we will guide you through the steps to help you narrow down your choices.
Before reviewing solutions, it’s important that you identify key areas about your company to
help you determine which solutions are right for your business.
Define Your Success
The most important step is to thoroughly understand
your measurements of success, specifically, Critical
Success Factors. Critical Success Factors are the
necessary elements for an organization or project to
achieve its goals. While you no doubt have an
extensive list of needs and wants developed by your
ERP Selection Team, not all of the items listed are
critical to the success of your project.
During your research, you should have identified key savings from your ERP
implementation. The savings don’t necessarily have to translate into cash savings, but
should impact the bottom line. Streamlining operations, visibility to inventory and data and
increased customer satisfaction may not be immediately translatable to cash, but will affect
operations at some point. Easily identifiable things like increased revenues have an
immediate impact on the company’s cash flow.
Develop a numbering system to prioritize your requirements. A “5” could be essential with “1”
being non-essential. If you have mostly 5’s, you should take another look at your
requirements. Not all requirements are must-haves.
Identify Your Existing Business Processes
If you aren’t sure of what it is exactly that you wish to accomplish with your ERP
implementation, then you’re not ready to move on to evaluating systems. Be sure to clearly
and fully understand what it is that the employees are doing on a daily basis, and what each
business requirement is. Then, you will be able to recognize a good ERP fit when you see it,
and be able to clearly communicate your need to the vendors.
 Do you fully understand your existing business processes?
 Have you talked with employees about their daily activities?
 Can you identify areas where you need improvement?
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9. Identify Preferred Solution
First, determine if you want an off-the-shelf product with many basic and advanced features
already built in. This is a great way to save money, get a stable product and get great
support. Be aware that you may be required to change some of your processes to fit the
product (which may not necessarily be a bad thing).
You may also consider a vertical solution, developed for and used solely by companies in
your industry. The advantage of a vertical solution can include additional functionality
specific to your industry and deeper level of knowledge of the specific best practices.
Finally, you can also have a totally custom solution built for your company. The vendor will
start with a base product and will build a solution that exactly fits your needs and wants.
Beware that custom solutions will most likely be the most expensive and time consuming to
implement (which may also not be a bad thing).
Develop a Vendor List
There are many ways to identify potential vendors – starting
with your computer! Do a thorough internet search to develop a
list of vendors that seem to meet your needs. You can also
learn of solutions through a number of more traditional
methods – trade shows, trade journals, colleagues, and
consultants/accountants.
Be sure to find a reputable VAR for your identified solutions.
Your VAR can make or break your implementation. Once
you’ve narrowed down your top two or three vendors, be sure
to do a thorough reference check. Create a checklist of questions so you ask each reference
the same questions.
Issue a Request for Proposal
Use your RFP to get a good picture of each vendor’s capabilities. Your questions should
include those related to technology, user experience, implementation and cost. Grade each
solution to identify the fit of the vendor solution to your requirements. Once you’ve identified
the solutions that could be a fit, it’s time to schedule the demonstrations. Create an
evaluation scale such as:
 5-included in current release and cost estimate
 4-available in current year
 3-minor workaround
 2-third party solution
 1-major workaround/custom development
 0-not available
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10. Schedule the Demonstrations
Each person on your ERP Selection Team should clear their calendar to attend the solution
demonstrations. They should each have a copy of the business requirements and grading
criteria.
Be sure the vendor demonstrates all critical features in a live version of the software. Do not
settle for a Power Point slide show or demo version of the software. Each attendee should
provide feedback and their score for the vendor solution.
In the next chapter, Qualify ERP Vendors, we’ll cover how to dig deeper into the vendor
offering to make sure you select the best ERP solution for you.
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11. 5
Chapter
Picking the Right ERP Implementation Partner
In this chapter, we’ll explain why it’s important to choose the right ERP partner and how to
tell if a vendor is the right one for you.
Choose the Right Partner
Choosing the right partner is as important as selecting the
right ERP system. Establishing a long-term working
relationship will help with internal adoption and increase
the likelihood of a successful ERP implementation.
Narrow the Field
Once you’ve narrowed your selections down to 1-2
providers, allow them to conduct interviews with ERP
Selection Team. The ERP team should clearly communicate the business requirements
outlined when they defined the business requirements. Once the vendors are brought up to
speed on your needs, they will be able to build a meaningful presentation that sets your
business in the context of their product offering. Their demonstration should illustrate how
the gaps in your current processes will be filled, how existing processes can be improved or
how new processes will impact your business (such as e-commerce).
Prove It
It’s very easy for a vendor to walk you through how their system completes specific tasks.
But what does it look like for your business? Preparing a script with a few business
processes that the vendor will work through the system not only ensures they understand
your requirements but helps you to see if the system will work for you (and possibly improve
your processes). As mentioned previously, never allow a vendor to “demonstrate” the
software via Power Point slides. It’s a huge red flag – run!
Know the Costs (all of them!)
You’ve probably heard stories of how ERP implementation costs spiraled out of control,
costing thousands more than the original estimate. Unfortunately, this happens, but it doesn’t
have to happen to you. Ask the vendor to provide you with the Total Cost of Ownership
(TCO) which should include:
 license fees (including 3rd party)
 implementation fees (training and consulting)
 support & maintenance fees (including maintenance on custom development & 3 rd
party products)
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12.  hardware
 software
 networks/communication
 software customization
 any other fees not included in the proposal
If you’re convinced you need an ERP system but are not sure you can afford it, ask the
vendor for a phased-approach. You can break up the costs over a longer period of time, and
it may be less stressful on your staff.
Avoid Customization if Possible
ERP gets a bad rap when it comes to costs, and a lot of that is due to software
customization. During the demonstrations, be open to new processes that are standard in
the software but may be different than how you currently do something. You might be
surprised to see that there’s a better and easier way to do something, and it’s already
included in the software. This also helps to avoid future maintenance and support costs.
Time is Money
Your ERP vendor should have experience in fast,
streamlined implementation of ERP systems. The faster it’s
running, the greater your user buy-in, the sooner you will
start seeing a return on investment. Ask your vendor about
their methodology for smooth implementation, and their
long-term support to ensure the system works and your
goals have been met.
Show Your Expertise
The ERP vendor you choose should have a broad view of the organization, one that goes
beyond functionality in the software. Understanding the entire business cycle is critical to a
successful ERP implementation. Ask your top vendors to demonstrate their knowledge of
your industry or business and have them demonstrate how that will translate into results for
your company.
Look for a vendor who has deep experience in the industry, with a stellar reputation for
implementing solutions on time and in budget (be sure to check references). And one with
extensive experience is more likely to be as committed to your success in the future, as they
are during the initial sale.
You’ve Made It (almost)
Choosing the right ERP vendor and system for your company doesn’t have to be a
complicated process. Following these tips will direct you through the process and help you to
choose the best ERP vendor for your project.
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13. 6
Chapter
Selecting Your ERP System
You’re almost there – you’re almost ready to choose your ERP system and start
implementation. In the previous post, Picking the Right ERP Vendor, we explained how to
choose the best partner for your business, which is as important as selecting the right
product. In this final chapter, Selecting Your ERP System, we will give you tips for
choosing the right solution for your company.
You already know that you need timely and accurate
information to make smart business decisions and the
software you’re currently using is no longer suitable for
your growing business. You need an ERP system that
will not only provide visibility to the information your
managers need to make better decisions, you need an
ERP system that will provide you with key competitive
advantages.
With so many ERP systems to choose from, it can be
overwhelming to pick the right one. But, if you’ve been following along in this series, you are
armed and ready to make your decision – and it will be the right one if you’ve done your
homework.
Consider All the Options
There are many ERP choices in the market today so be sure to fully explore your choices
and choose the best one for your business. Don’t pick solely on name or reputation.
Consider what your organization’s needs are, and select the best one to give you that
competitive advantage.
Review Your Business Requirements
It may be many months since you first developed your
ERP team and drafted your wish lists, so it’s a great time
to go back through those lists and make sure that your
RFP addressed the most important items, and most
importantly, that your top ERP vendor choices can meet
those needs. Also, review your current processes and
what those processes will look like in a new ERP system.
The potential vendors should have clearly demonstrated
how your processes will look in their system.
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14. Evaluate Technical Fit
It’s important to understand how the new ERP solution will dovetail with your current
infrastructure. Implementing software built on a completely different platform can cause
issues (and increase costs) later on.
Know the Total Cost of Ownership
As mentioned in Picking the Right ERP Vendor, it’s critical that you fully understand the total
cost of ownership (preferably before you become invested in a particular system). Despite
the sales reps being completely committed to your success, they are still trying to sell
software, so they may downplay some costs associated with their software. Be sure to ask
about hidden costs that aren’t apparent in the quote. Things to consider:
 license fees (including 3rd party)
 implementation fees (training and consulting)
 support & maintenance fees (including maintenance on custom development & 3rd
party products)
 hardware
 software
 networks/communication
 software customization
 any other fees not included in the proposal
Be Realistic with Your Implementation Plan
Prior to making your final ERP system decision, ask for a comprehensive implementation
plan that includes installing the software, ensuring it is functional, tested and accepted by
key users (including those on the original ERP Selection Team). Having this plan up front will
help you completely understand the costs and resources required to successfully kick off
your new ERP implementation. In your plan, include things like business processes,
workflow design, data migration, testing and any change management activities. Prior to
installation, make sure your data is fully scrubbed and useable. The data out of your new
system is only as good as the data you put into it.
Track the Success of the Project
Going back to Defining Business Requirements, you should pull
out your original list to track the success of your ERP
implementation. Have you improved visibility, reduced costs,
increased customer service levels, or any of the other items on
your list? Go back over it to measure your success and make
any necessary adjustments.
Selecting the right technology for your company will give you
the edge over your competition. But you must go through all the
steps for success. Once you know what you need, you will be able to make a smart choice
to keep moving forward.
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15. Want to learn more about picking ERP systems? Ready to learn how SAP Business One or
Microsoft Dynamics AX can transform your business?
Contact Derin Hildebrandt at 1.866.460.7765 ext. 100 to talk about your business goals for
your move to ERP and to schedule your initial complimentary consultation. And be sure to
visit our website to learn more about The Encaptis Group, our offerings and to view product
information and videos.
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