Selecting a new ERP system is a gruelling exercise, particularly for mid-market companies that are often economically constrained and resource bound. Choosing the 'right' system, identifying any hidden costs and properly identifying implementation timescales are just a few of the typical concerns that loom large when assessing a new system. Mindful of the strains of the traditional selection process, SAP is offering a different approach based on its recently developed SAP Business All-in-One Configurator. Gary Simon FSN's managing editor looks at this novel approach which is designed to take the cost, stress and time out of ERP selection.
In years gone by, fully fledged ERP systems were the sole province of very large companies, but over the last decade the breadth of functionality associated with mainstream ERP packages has percolated into the mid-market. To the uninitiated the scope of these systems can seem overwhelming, touching every functional area and crevice of an organisation. Even packages designed for SMEs at the smaller end of the range can opt for job costing, HR modules, material requirements planning and workflow as well as a formidable battery of business intelligence capability.
With most solutions sharing similar scope and common technology platforms, choosing between the different packages on offer can be mind-boggling especially when the 'look and feel' of so many solutions is similar. Traditional approaches to resolving this dilemma look more and more unappealing. The need to specify functionality in a detailed Statement of Requirements (SOR) seems unhelpful in situations where nearly all of the mainstream products offer similar rich functionality. Besides which it can take several weeks of patient work to develop a SOR or Invitation to Tender (ITT). These huge volumes can be very costly to produce (especially when consultants are involved) and tend to be of limited value when nearly all vendors can tick the "Yes" box against more than 90 percent of the requirements. The SOQ or ITT approach may have been appropriate when packages were widely differentiated but in today's highly refined market the technique can seem outmoded, clunky and redundant.
The traditional approach also suffers from the mismatch in perspective taken by software vendors and their customers. The ITT sets out the customer's functionality 'wish list' whereas a supplier works from its own specification. Quite often a supplier will not commit formally (contractually) to meeting the customer's specification. Instead it might hedge the issue by agreeing to meet the requirements of the ITT as adjusted by its own systems specification – rendering the ITT worthless. The customer is left with doubts about exactly what functionality will be delivered and at what price.
In fact getting a price – even a rough or indicative price can be a major problem for would be purchasers. The uncertainty around requirements means that it can take weeks for the supplier to offer a firm price and even then it is often difficult to understand what is included and what parameters affect the total cost.
These problems are only too familiar to Thomas Burkhardt of SAP. After years of dealing with mid-market companies he decided to come up with the SAP "Configurator" or ready reckoner for the SAP All-in-One business software. This innovative tool is designed to overcome the limitations of the traditional ERP selection approach using a simple on-line web based tool to capture the size of the organisation and the main functionality it needs. Armed with this information the SAP Configurator suggests the cost of software licences, servers and implementation, including preliminary end user training. To view an independent FSN test drive of the application just click here .
The advantage of the SAP Configurator is that within the space of a few hours (even a few minutes) a potential purchaser can see in great detail the functionality that will be delivered based on industry best practice and broadly how much it will cost. Interestingly, SAP is not precious about anyone else sharing in its easy to use tool. Available over the web and without restriction, it allows anyone to develop a list of functionality. But SAP is confident that few organisations will be able to match the combination of price and functionality it can offer.
One of the significant advantages of the Configurator tool is that it provides a common language between SAP, its partners and potential customers, allowing them to discuss and refine the solution before final decisions are taken. All of this says Burkhardt leads to reduced implementation timescales, certainty around pricing and comfort around the exact system that is being acquired.
Burkhardt is very modest about what has been achieved – but it is a major step forward. Take a look for yourself and see how it could help you!
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