Abstract

Everyone is aware of the fact that accounting and ERP software selection projects seem to have an excessively high failure rate. A month doesn’t go by without hearing that a customer has sued their ERP vendor or implementer/reseller for a failed project. While this is certainly an issue, some of the blame may need to be placed on the shoulders of the buyer and for any number of reasons. While reimbursement could be collected, the lost time and lost productivity can never be recovered. Maybe the following can be used as a checklist to reduce the likelihood of failure.

Introduction

If I attempt to list every step in a typical accounting/ERP software selection project, I could publish a book. Instead, I want to concentrate on those steps you should take before you actually launch the formal project. If you are organized for success, the likelihood of failure will be reduced significantly.

Share the Responsibility

Never launch a software selection project thinking that the vendor/reseller is 100% responsible for the outcome. That almost guarantees failure. Your primary objective in any ERP software selection project should be a successful outcome and that means you need to take whatever steps are necessary to do what needs to be done.

This philosophy also applies to the purchase decision making process. While there is no doubt that you need to appoint a project manager to make sure things get done, no one person should be totally responsible for an ERP software selection project. Every person should be responsible for the final outcome and therefore each person must make the “selection”. The only way this project is going to stand a chance of succeeding is for each person to participate equally in the final decision. The key concept here is mutual responsibility.

Secure Buy In or Kill the Project

It’s really quite simple. If you do not have the active support of each significant stakeholder, go no further. Your ERP software selection project has been significantly compromised.

Educate Yourself

Selecting a new accounting / ERP system isn’t something to be taken lightly. Any project of this magnitude and critical importance can fail simply because you get off on the wrong foot. Start this ERP software selection project by taking no direct action. Instead, spend some time educating yourself so that the decisions you make as you proceed will be based on realistic facts, not dreams or the marketing hype of software vendors. One of the most important steps you can take is learning how a software selection project should be organized. If you don’t understand what needs to be done and by whom, how can you possibly know whether you are on the right track?

Construct a Foundation for Greater Success

Rather than duplicating what you are doing today, take your business apart and create a stronger, more effective structure. While formal Process Improvement should not be undertaken lightly, maybe you don’t need such radical change. Maybe you do. The key concept here is creating an organization that is more efficient, more effective, more productive and therefore more profitable. Then you can determine what you need in terms of business functionality that will help you move to this future vision.

Assess Your Ability to Change

Even though you may have recognized the need to change, and have identified specific areas of the business or business management system that need to be changed and to what degree, if you cannot manage effectively such a n ERP software selection project, or your management and employees are not ready to change to the same degree you believe is required, the project’s basic foundation will be compromised.

Develop an Understanding of what’s Possible

This is to some extent an educational step, but focused more on the software functionality you might need. The more you know about the potential that can be released through current accounting / ERP systems, the better prepared you will be to define exactly what you require to improve your own operations. Learn what other people are doing. Contact prospective vendors or resellers to learn more about what’s possible in terms of functionality. At this stage make it very clear that you are conducting research, not buying.

Remember to Include your Customers

Since your customers are your most valuable business partners next to your employees, involve them in this process. Ask them how you can serve them more effectively.

Build from the Bottom Up

One of the mistakes firms make is driving software selection from the top down. Executives, managers and project leaders will all contribute significantly to this project from defining requirements to making the purchase decision. What about everyone else? Is their input important? Are they ready to change? Will they accept the new system? Any person who will be using the new accounting/ERP system is a vital contributor to the firm’s success and the success of this project. Their contribution may shed light on important software requirements or business improvements. If you want to increase the likelihood of failure, leave these people out of the process.

Answer the Critical Questions

Your first step is giving people the ability to critique their own jobs as well as the organization as a whole. Give people the ability to describe their job objectives as they see them, critique the information that flows into them from other sources, critique their portion of the accounting/ERP system, and put into their own words what they believe the organization does well or does not do well. Maybe you should ask and answer the following questions.

• What do we do now?
• What works and doesn’t work?
• What can we do individually to improve?
• What should we be doing that we are not right now?
• What changes should be made in the business management system to help us work more effectively?
• What can other people do to help us do better?
• Are these goals or changes reasonable?
• Where is the organization today?
• Where should it be in the future?

Please keep in mind the fact that everyone needs to be involved in these initial questions. Leave people out at your own risk.

Build an Effective Information Management System

Let’s admit that it’s now possible to track anything you want. That isn’t the issue. Modern accounting and ERP systems can analyze data and spit out reports and graphs and dashboards that have the potential to either overwhelm people or give them information that they don’t need. Instead, you need to use this power to your advantage. As I have discussed in previous posts, what we need is a truly effective decision management system, not multi-page status reports or meaningless metrics and useless dashboards.

• Start by designing a targeted reporting system. Ask yourself why you need the information. If it doesn’t lead to a decision, then you don’t need it.
• Build a system of business metrics that gives people the ability to “see” where they need to concentrate their attention and to “see” if decisions they have made are leading to improved results.
• Finally, design truly effective Exception Management systems that give people the ability to identify and address issues that need to be addressed.

Summary

I have chosen to address only those software selection tasks that should be undertaken by the buyer and only the most important steps that precede  any form of needs analysis and product evaluation. While I would certainly hope that vendors and resellers would help people understand what needs to be done and by whom, I choose to follow the maxim “Let the buyer beware”. If you are contemplating the purchase of a new accounting or ERP system, you need to take responsibility for the project. If you organize yourself for success, it’s very likely you will succeed.