Tips on Producing a Request for Proposal for a Long-Term ERP Solution
Posted by Clarence Gray
Is your organization thinking about implementing a new Enterprise Resource Planning (ERP) system? The process to select an ERP system can be daunting for an organization, particularly if there are a number of stakeholders and functional departments involved. One of the common tools used in the selection process is a Request for Proposal (RFP). An RFP can certainly be helpful in gathering information about what’s available in the marketplace and in comparing vendors’ solutions, services and pricing. It can also help you look at how well each system may address your business needs, challenges and goals.
Before constructing an RFP, it’s important to think about what your true needs are. In my ten years of experience on responding to RFPs, most of them seem to focus on whether the software solution has hundreds (or even thousands) of features and functionalities. Typically, this is done with a multi-tab spreadsheet that contains specific, often routine, business functions and requirements. But does this approach address whether the vendors’ systems are able to achieve your organization’s higher level business needs?
I’d like to suggest that zeroing in solely on whether the software solution can meet an ocean of specific functional requirements misses the point. Instead, an organization would have greater success in meeting its higher level business objectives by ensuring that the RFP addresses those objectives. The first step in this process is to identify what those objectives are and then make sure those are reflected in the RFP. Further, since most organizations keep their ERP systems for a long time, organizations really need to think about what their long term needs are for the system. Think about all those hundreds or thousands of feature and functional requirements that reflect current processes; how many of those will change over the next two years? How about the next five or ten? In other words, the system you buy today needs to be able to change and respond to business changes next year, the year after, five years later, and so on.
For example, an organization needs to know that it can easily set up a chart of accounts and reports that meet today’s requirements and that reflect today’s organizational structure. But what happens in a couple of years when a new line of business is identified and a new department is needed? Wouldn’t it be good to know how difficult and time consuming it would be to re-configure the system?
In an RFP, don’t get bogged down in detailing hundreds of functional requirements. Remember that most vendors have been around a long time and features and functionalities aren’t all that different across each software solution. What does make a difference is the evaluation of which ERP solutions are able to meet your higher level objectives and your longer term needs, including integration of the system, ease of use of reporting tools by users, and cost and time involved in re-configuring the system down the road.