BUILD THE PERFECT ERP RFP DOCUMENT

Size: px

Start display at page:

Download "BUILD THE PERFECT ERP RFP DOCUMENT"

Brent Hampton
6 years ago
Views:

1 WorkWise Presents BUILD THE PERFECT ERP RFP DOCUMENT WITH THESE 8 TIPS WORKWISELLC.COM

2 Table of Contents What's an ERP RFP Document? 3 Why Do I Need One? Tips for Building an ERP RFP #1: Start With Your Company's Background Information 5 #2: Establish Straightforward Timelines #3: Set a Clear Budget 6 7 #4: List Accurate Criteria for Final Selection #5: Keep it Short and Sweet #6: Focus on Needs, Not Wants #7: Do As Much as you Can Without a Consultant #8: Ask for a Similar Company's Success Stories

What's an ERP RFP Document? If your company needs a new ERP (Enterprise Resource Planning) solution, there is no better place to start than to create a Request for Proposal (RFP).

3 What's an ERP RFP Document? If your company needs a new ERP (Enterprise Resource Planning) solution, there is no better place to start than to create a Request for Proposal (RFP). Specifically, an RFP document consists of a plethora of specifications that your business will need within and alongside your prospective ERP, as well as your limitations and expectations as a company before, during, and after the software implementation process. This can include a description of purpose for the request, a company summary, budget details, and much more. Creating an RFP document should be a team effort among executives who are involved in the ERP selection and implementation process. If there is any confusion or debate among your team, which there likely will be, you can put it in the RFP as a question or open-ended statement you would like the vendors to elaborate on, to get some outside input. Summary Purpose Goals Needs Budget Timeline

4 Why Do I Need One? This document can help you narrow a long list of potential vendors down to a select few in a relatively short period of time. Rather than spending the time viewing each vendor and dealing with many different sales representatives, you can utilize an RFP document to look internally and get a better understanding of your company s wants and needs, as well as specifications of a vendor beyond surface-level information. Be Focused Give your ERP selection committee focus and specificity through learning details about a variety of ERP vendors, their software, and their support services. Share Information Let your prospective ERP vendors know more about your business by sharing budgetary information, an executive summary of your business and its processes, a purpose statement, and much more. Compare and Contrast Creating a well thought-out RFP document is a great way to get a fair and accurate comparison of ERP products/vendors on a level beyond just simple comparison of software features. Know the Specifics Get details that are necessary in a major software onboarding such as actual cost, support availability, implementation assistance, training, and more. Evaluate Vendors AND Your Business An RFP document allows you to evaluate an ERP vendor; the document also gives you a chance to evaluate the needs of your business, the purpose of an implementation, and any limitations with bringing on new software from your business s perspective. Make an Educated Decision Don t go into such a major financial investment and business-changing decision without knowing every detail, and knowing that an ERP vendor is the perfect fit for your business s unique needs.

5 1 Start with Your Company s Background Begin by introducing your company's details, including size, revenue, locations, etc. if you are comfortable enough to do so. This will come into play later when you look for references of similar businesses. It also gives the ERP vendors an understanding of the numbers to help determine if they want to pursue the opportunity or not. The key here is to state what you do, how you do it, what you want to do, how you d like to do it, or what you want and need to improve on. Give specifics and details to help create a better picture in the mind of the companies you are sending it out to. Mention if there are any future plans in particular, as well as finding an ERP you can grow with is just as important as finding one that fits right now. PRO TIP When writing about your company's background, think about what makes you unique and why what you do matters. This will better your chances of finding a vendor that fits your unique requirements and values. Build the Perfect ERP RFP Document 5

6 2 Establish Straightforward Timelines First, set a date by which you want to receive the responses back. Giving a week or two should be more than enough. If a vendor needs more time, sends it late, or gives excuses as to why they cannot fill it out (such as it is not detailed enough or too detailed), it may be wise to reconsider doing business with them. Second, determine a timeline for the evaluation process. From the initial selection from the RFP, to the next round of demos, to the final round or final decision. These do not have to be set in stone, but making an educated guess will suffice. Finally, set a plan for post-purchase to include an ideal time for implementation and training, though this will likely change. This is done so that high level descriptions and longer time gaps won t come back to hurt you if not accurate. The key is to have something to go off of for future reference. RFP Evaluation Demos Implementation Interviews Decision Build the Perfect ERP RFP Document 6

7 3 Set a Clear Budget There are generally three costs for an ERP software. The first is the initial cost for each license, next would be the cost for initial implementation of the software, and lastly, there is usually an annual cost for maintenance of the system. Typically, companies will set a budget of X amount for initial costs and let the ongoing be open to a later date. It wouldn t hurt to take a look at the company s cash flow and see what the max is, and budget for slightly under to try and cap it at a comfortable price. With ERP purchases, costs tend to go up, not down. Also, be wary of any ERP with ongoing costs that are outrageously higher than their competitors. PRO TIP One of the biggest mistakes a company can make is to withhold any budgetary parameters. Build the Perfect ERP RFP Document 7

4 List Accurate Criteria for Final Selection Although you still have a few stages to get through, stating the top priorities at the beginning will be key for the ERP providers, as well as

If it ever comes down to a toss-up, making the final decision based on what is most important would be a good decision.

8 4 List Accurate Criteria for Final Selection Although you still have a few stages to get through, stating the top priorities at the beginning will be key for the ERP providers, as well as yourself. If an ERP vendor is a fit for most of your wants, but not for the key criteria, they will probably drop out knowing this and not wanting to waste their time. If it ever comes down to a toss-up, making the final decision based on what is most important would be a good decision. People tend to get caught up in bells and whistles, but keeping this criteria in mind will help you make the best selection. Product Configurator Shop Floor Control Mobile Alerts Advanced Forecasting Lean/Kanban SolidWorks CAD Integration Build the Perfect ERP RFP Document 8

9 5 Keep It Short and Sweet There is a tendency once you begin the process to put in as much information as possible. This common error can be a time consuming task that makes little difference. Experienced vendors know based on the basics whether or not they will be a fit and can elaborate on their product based on the important pieces. Also, one that is too detailed could defer ERP providers from filling it out, as they have other things to do for their work. The RFP is meant to be a high level document to review, not a detailed description of the company and its processes. The demo stage is where you get into the lengthy conversations; this is only meant to help narrow the field down, not prep the final candidates. Keep that in mind throughout and it will save you time and resources better spent at later stages of the evaluation. PRO TIP Save details & complexities for the interviewing and demos stages. The RFP should help you evaluate your options at a high level. Build the Perfect ERP RFP Document 9

10 6 Focus on Needs, Not Wants Building off of tip #5, this is a good way to keep it short. Before sending off the RFP, check to ensure that it includes both needs and wants. Tailoring it to the needs is critical in narrowing it down to the best fitting ERP solutions. It is better to have it match the needs 50% and the wants 50% rather than the wants 100% and the needs 25%. Many times, the wants are the flashy, new functions a vendor will add. They may promote or even push it on you as a huge differentiator, which it may be. However, sacrificing the fit of their accounting, production, HR, etc. is rarely a decision that pays off later on. Focus on the core first, then the outliers. PRO TIP There may be debates internally on what constitutes a need vs a want, but a conclusion needs to be reached. If it cannot, concede to the highest ranking employee (President, VP, etc.) Build the Perfect ERP RFP Document 10

11 7 Do as Much as you Can Without a Consultant No one knows your company and your processes better than you. Consultants, as much as they may say they are objective and unbiased, rarely are. They get significant money from selling certain solutions by upping the price tag and pocketing the difference. You will be the one to best represent your company s wants, needs, strengths, and weaknesses in the RFP, as well as the demos and final selection. Although a consultant s input can be valuable, use it more as a guide to open your eyes to new ideas and revelations on what you may not realize internally. A fresh perspective can certainly be a good thing, especially if you have been involved for a long period of time; just keep in mind any ulterior motives that might be in the consultant s mind. PRO TIP If you must work with a consultant, be sure to ask them tough questions to determine their level of bias toward their specific software. Build the Perfect ERP RFP Document 11

12 8 Ask for a Similar Company s Success Stories This is where tip #1 becomes a major factor. After giving information regarding your company and its background, you can ask for specific examples of customers they have from each. The vendor may want to give names at this point, or they may not. As long as they can give a detailed description, that should be enough. You can get references and other details later in the evaluation process. In addition, you can ask for success stories of similar companies based on size, final product, revenues, or any combination of data based on what you share. This will also help you see what companies may be geared towards and if your company falls within that range. Or, they may realize that they are not a fit and save you the time of evaluating their RFP. PRO TIP When calling references, ask about customer service quality, budgets, false promises, reliability, and more. Build the Perfect ERP RFP Document 12

Candidate Experience From End-to-End: What s Your Weakest Link?

Candidate Experience From End-to-End: What s Your Weakest Link? THERE S A DISCONNECT 0% 50% 100% 47% 0% 50% 100% 78% of candidates say employers do a good job of setting expectations in terms of communication