6 Common Mistakes Businesses Make When Selecting ERP Software

6 Common Mistakes Businesses
Make When Selecting ERP Software

A Guide to Selecting the Right ERP Software for Business Executives
6 Common Mistakes Businesses Make When Selecting ERP Software
Page 2 of 13
Table of Contents
Introduction ........................................................................................................... 3
Overview................................................................................................................ 4
#1 Dont Assume Its Going to be Business as Usual. ............................................. 5
#2 Dont Avoid Proper Planning. ............................................................................ 6
#3 Dont Choose the Wrong Technology Partner. .................................................. 7
#4 Dont Underestimate Implementation Time or Resources. ............................... 8
#5 Dont Exclude Employees from Implementation Decisions. .............................. 9
#6 Dont Neglect Maintenance & Upgrades. ........................................................ 10
Conclusion ........................................................................................................... 11
About e2b teknologies ......................................................................................... 12
Sources ................................................................................................................ 13
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440.352.4700 | www.e2benterprise.com
Page 3 of 13
If youre reading this white paper, then chances are your ERP
selection will be a success. Not because of the valuable
information in here it is valuable but because youve made an
effort to make educated decisions about your selection and
implementation. Your desire to learn how to take the right course
of action is evidence in itself that you will do it right. As you will
come to learn, not many business leaders do what youre doing.
Many jump into the selection process without doing research and
come out with a system they have to eventually abandon. So
congratulations! Youre off to a great start.

Page 4 of 13
Overview
Software selection and implementation can be one of the most costly and time consuming projects that
your company embarks on. Thats why its imperative your ERP selection process is done right. You need
to plan for every step of this process and have complete understanding of things like your budget, time
required, people involved, and resources required. Failure to evaluate these important factors could
mean ditching your final ERP selection and starting the process all over again after just a few years. You
need to find a system thats strong enough to handle your business for many years, while also dynamic
enough to grow as your company grows.
It doesnt matter if youre a multi-billion dollar organization with locations spread out globally, or if
youre a smaller company with only a handful of employees, your ERP system needs to provide
functionality for all of your business processes from financials and HR to distribution and your supply
chain. A good ERP system should streamline all of these processes and more from one single database.
But be careful, because many solutions that call themselves ERP, really arent.
Since ERP systems entered the marketplace around 1990, there have been myriad software providers.
Some create powerful, full-scale ERP systems, but others bill their solution as an ERP when, in reality,
theyre only a small part or extension of a full system. For a business going through the ERP selection
process, this can make things very complicated. And even when you do find a system with full ERP
functionality, it still might not be the right fit for your industry or your company. This is why so many
implementations end up being disastrous because quick and uninformed decisions were made during
the selection phase.
How many ERP implementations blow up in failure? Well, in 2001, Robbins-Gioia did a survey [] of 232
companies in multiple industries about the perceptions of their ERP implementation. What they found
was that 51% viewed their implementations as unsuccessful. One decade later, Panorama Consulting
Solutions did a similar report []. But what they found was that 72% of ERP system implementations fail.
So, what happened in 10 years that brought the failure rate from 51% to 72%? This could depend on
several factors, but what it really boils down to is the growing need for ERP systems in businesses and a
lack of qualified experts helping these companies throughout their selection and implementation
processes.
2001 ERP Implementations
Failure,
51%
Success,
49%
2010 ERP Implemantations
Success,
28%
Failure,
72%

Page 5 of 13
When it comes to ERP comparison and implementation, the same mistakes get repeated over and over.
This white paper will aid in your ERP selection process, and shed light on some of the fatal mistakes that
could undermine not only your final decision, but possibly your entire company. This white paper will
walk you through six of the biggest mistakes you can make in your ERP decision process and show you
how you can avert them.
#1 Dont Assume Its Going to be Business as Usual.

No matter what organization or industry you work in, your business processes and environment will
change if not a conscious transformation, then unwilled and unexpected. Its much better to create
your own change in your business, rather than have unexpected change create your business for you.
The best time to re-evaluate your business processes is when youre about to implement a new business
system. Especially a system as multifaceted as ERP.
Many businesses get stuck in the thats the way weve always done it mind-trap. They refuse to give
up their old tactics. This compromises the ability of a new business system to really bolster your
company. In reality, businesses should be using their ERP implementation to reassess operating
processes, and address how a new system can best work with their needs. In most cases, business
software is only effective if its backed by a strong business model. Use your ERP selection to learn what
is and isnt working at your company, because its much easier to make these changes now than it is
when you already have a system in place.
According to the report by Lakelet Advisory Group [], the top reason that ERP implementations fail is
due to the inability to change processes:
ERP Implementations Fail Because

Inability to change
process
3%
Senior Management
9%
36%
11%
Customization
Training
17%
24%
The implementation was

IT based
Wrong solution selected

Page 6 of 13
#2 Dont Avoid Proper Planning.

Planning should be one of the most important steps in your ERP selection process. ERP is a very costly
investment, and it takes time to implement successfully. Planning properly from the start can ensure
that youre spending less money and time on your project. More importantly, a strong plan will make
sure your final ERP selection is the right fit for your business. Some factors to consider in your planning
stage include:
Establishing your budget and your ability to afford the investment. If the investment amount comes
out higher than you feel comfortable with, the software provider may offer a Software as a Service
(SaaS) solution that allows you to essentially "rent" access to the software in the cloud, usually on a
month to month basis, decreasing your need for up-front cash.
Assigning the selection team and who will be working on this project. Be sure to identify the executive
sponsor and all critical stakeholders.
Classifying the areas of your business you want to improve. Also note areas in which you already do
well, so the solution provider can address your most important needs.
Identifying your staff's critical business
issues and needs. The list doesnt need to be
a 200-page document with 10,000
requirements. Even a checklist can help keep
your team focused on solving the problems
that are important to you.
Defining selection criteria (Request for
Proposal, or RFP) for the solution and the
provider partnership. Criteria such as longterm financial stability, in-depth knowledge
of your industry, investment in research and
development, implementation process, and
technology vision are all important factors to
consider.
As part of your planning phase, make sure to develop a timeframe in which you want specific tasks
completed. Its useful to document all of the evaluation activities you plan on completing during this
phase, such as discovery sessions, demos, site visits, meetings, and so forth. Then, set a tentative date
for the completion of each task. Planning during your ERP selection process is no different than planning
for any large decision; you need to establish what your goals are and then lay a blueprint for how each
goal is going to get accomplished.

Page 7 of 13
#3 Dont Choose the Wrong Technology Partner.

Would you undergo neurosurgery from a dentist? Of course not. Much like your body, a business is like
a living, breathing organism composed of several individual parts that work together. A change of ERP
system can be much like neurosurgery, because your ERP is the brain of your organization, managing
intelligence over all of the processes that make your business function.
If you have a problem or inefficiency within your company, software can act as the cure. In this sense, a
technology partner is much like a doctor. If you choose a technology partner that doesnt understand
your industry, they wont be able to properly understand what your needs are, and they certainly wont
understand how to fit an ERP system to your business.
You need to ask several questions of your technology partner to make sure youre getting the treatment
you require; questions such as:
How many of their other customers are in your industry?

How long has the company been serving industries like yours?
Who are the key people who will implement your software system and what is their
background?
What are their customers saying about them?
How many of their customers have had sustaining success with their ERP software after their
implementation
Make a list that defines specific attributes that are important to your company and you feel should be
represented by your technology partner. This list should highlight values that will illustrate your
partners competence working with your industry, your company size, your organizational structure,
your corporate culture, and so forth.

Page 8 of 13
#4 Dont Underestimate Implementation Time or Resources.

Most companies will far underestimate the amount of time and resources that are required for
implementing a new ERP system. Often, they believe their technology partner can just do the whole
thing easily, without much assistance needed on the customers end. This is a dangerous misconception,
because without the proper planning, your implementation can tie up your processes far longer than is
necessary.
In order to estimate the time involved in your implementation there is a simple formula:
Divide the total cost of your ERP software by 100. For instance, if your ERP software costs $25,000, then
you can expect to take about 250 man-hours or a little over six weeks to implement; assuming youre
using a certified consultant. If you plan to self-implement, which is not recommended, you can expect to
double that time.
To ensure the implementation goes as smoothly and as timely as possible you need to plan your time
accordingly. Its highly recommended that you assign a dedicated project manager to your
implementation. This project manager should be in charge of mapping out the implementation from
start to finish, taking into account such things as budget, time required, and people involved and key
contacts.

Page 9 of 13
#5 Dont Exclude Employees from Implementation Decisions.

Todays world is driven by technology. The decisions surrounding what technologies your company will
embrace are choices that will directly impact its success. For this reason, its imperative that the right
people at your company are involved when deciding which ERP system to implement. You need people
that are technically competent enough to understand the infrastructure of the system, people that will
know what functionality is required of the system, and high level executives that have a clear vision of
the companys future.
Since ERP takes part in almost every division of your organization, its important to involve the head
managers and decision makers from each division in the selection process. Even if your ERP is providing
executive oversights to only a few top employees, many more employees will be impacted by the
system, and including people such as line managers is very important to the selection process.
Depending on the size of your organization, it might be difficult to include every manager or decision
maker, but whats important is including those who have the most influence over particular business
processes. Here are some key people you would want to include in your ERP selection:
Executives
Managers
IT Staff
A CEO, Owner, Chief Financial

Officer, and other executives
provide long-range vision of the
company.
Line managers from each

discipline should confirm
proper functionality.
IT Staff, such as your CIO, can

ensure you have the best
technology infrastructure.

Page 10 of 13
#6 Dont Neglect Maintenance & Upgrades.

Selecting and implementing your ERP system is just the first step in a larger process. After you have the
system up and running, its obvious that you will eventually have to undergo upgrades and maintenance.
When it comes to ERP, maintenance is much more than just doing repairs to the system when
something goes wrong; its also preventative. According to a study done by the National Institute of
Statistical Sciences, only about 21% of software maintenance goes toward bug fixes [4]. The other 79% of
software maintenance goes mostly toward product enhancements.
Bug Fixes
Enhancements
and other
Maintenance
Maintenance must be able to stay informed on key issues and security alerts, be able to cost-effectively
troubleshoot bugs, provide migration support, and keep up-to-date with global upgrades and changes
made to the system by the developer. Do you know who will be able to handle these responsibilities?
Usually, the software reseller or original
publisher assists with the maintenance of your
ERP. Some companies even outsource the
maintenance of their software to independent
support consultants. It is rare that the IT staff or
other direct employees at your company would
perform the upgrades and maintenance of an
enterprise business system. You will need to
have a maintenance strategy in place before
going forward with your ERP implementation.
This way, you will know who to rely on when
changes to the system need to be made.
In addition to having a strong maintenance strategy for your ERP system, you should also make sure this
strategy is cost-effective in the long run. According to SSi Consulting, companies typically spend around
15-20% of their software license fees on maintenance and support every year [5]. This makes choosing
your maintenance provider almost as important as choosing your software provider. When selecting
your technology partner, its best to pick a candidate that can provide a full 360 degree range of ERP
services. By selecting a candidate that can deliver the whole package, you can greatly reduce cost and
confusion, while also making sure they are fully invested with your business and ERP system.

Page 11 of 13
Conclusion
Selecting and implementing an ERP system is no small effort. It involves plenty of time, energy, and
participation from several divisions and employees at your business. Often, the time to complete the
initial planning right through to the final implementation can take several months sometimes years.
But dont let that discourage you. A properly utilized ERP system can provide a return on investment
that will exceed your highest expectations.
This white paper should be just the start of your research into ERP selection methodology. The more you
educate yourself, the better your chances of a successful implementation. Although internet research
and white papers alone can only go so far. Eventually, you will need to lean on a technology partner or
industry expert to provide you with answers to the many questions you will have along the way. Picking
this partner is just as important as picking the solution itself, because your partner will guide you to
ultimately make your final ERP decision.
If done correctly, a properly implemented ERP system can greatly improve your company from every
angle from efficiency, to productivity, to revenue increases. Start planning right from the start, and
you will have no trouble finding an ERP system that maximizes your business.

Page 12 of 13
About e2b teknologies

e2b teknologies (www.e2btek.com) sells, supports, and implements Epicor 9, Sage 500 ERP, and Intacct
Financials enterprise resources planning (ERP) accounting software for distribution, manufacturing and
service companies. e2b also resells, develops and implements SugarCRM, the fastest growing CRM on
the market. Learn about our Sage ERP X3 consulting, Sage 500 ERP consultant, Sage 100 ERP consulting,
and Epicor consulting and development services.
Industry solutions are available for automotive, HVAC & plumbing, food and beverage, high technology,
and professional services organizations. ERP solutions include integrated systems for Supply Chain
Management (SCM), Enterprise Content Management (ECM), Customer Relationship Management
(CRM), Human Resources Management Systems, (HRMS), Warehouse Management Systems (WMS),
and more.
Customers have access to senior-level engineers and consultants and are supported through an online
customer portal and dedicated team of knowledgeable support analysts.

Page 13 of 13
Sources
1. "Statistics over IT Failure Rate." Statistics over IT Failure Rate. Robbins-Gioia, 2001. Web. 17
June 2013. <http://www.it-cortex.com/Stat_Failure_Rate.htm>.
2. Kimberling, Eric. "One Key Reason Why 72% of ERP System Implementations Fail."Panorama
Consulting Solutions. Panorama Consulting Solutions, 9 Mar. 2010. Web. 17 June 2013.
3. "Reimplementation of ERP/CRM....." Lakelet Advisory Group, LLC. N.p., 21 Jan. 2013. Web. 15
June 2013.
4. Eick, S., Graves, T., Karr, A., Marron, J., and Mockus, A. 2001. Does Code Decay? Assessing
Evidence from Change Management Data. IEEE Transactions on Software Engineering. 27(1) 112.
5. Riordan, Karen. "Advantages of Staying Current on ERP Maintenance." ERP Software Blog. SSi
Consulting, 14 June 2010. Web. 21 June 2013.


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