Solving the ERP riddle: what is the right platform for my environment?
Signposts for strategic software selection
Imagine a world where your core ERP platform adapts to your business needs and supports you in reacting quickly to new opportunities as they arise. In today’s world of greater uncertainty and volatility, many CFOs are longing for such a smooth ’scenario’.
A modern ERP system provides seamless interaction between the different functions. It also acts as a reliable data source for deriving business insights. Analytical capabilities depend on having access to a wealth of relevant, connected company data, which an ERP system can provide. So, what are the key criteria that should determine a ’once-in-a-generation’ ERP selection decision?
This Deloitte Point of View offers the following insights:
- Demystify the ERP selection process and break it down into its fundamental questions and answers
- Provide guidance for an objective assessment of the main ERP platforms from a financial perspective
- Share ideas to kick-start the ERP selection and implementation process
Demystify the ERP selection process
Deciding which ERP to select depends on an assessment of many different factors. Asking the right questions in the first place will bring you to a well-informed decision.
Provide an objective assessment
What are the key challenges to consider? The Deloitte ERP Playbook* defines 9 dimensions for assessing vendors and avoiding the common pitfalls. These dimensions can be tailored and weighted to map to the specific requirements of your organisation.
This is a fundamental decision, because the location and maintenance of the processing environment defines the level of control over data privacy and residence, and the total cost of ownership
- Is both an on-premise and a cloud-based solution available? Or is just one of these options available?
- In a cloud-based solution, does the client data remain resident in Switzerland?
- Does the vendor provide public, private and hybrid cloud solutions?
- Is Software-as-a-Service (SaaS) an option?
- How frequently does the vendor upgrade its software?
The time that will be required for all users to become fluent with using the solution is a key aspect, because their expectations may differ from the actual length of the implementation cycle
- How long does it take for the different types of user (such as super-user or standard-user) to become fluent with the solution?
- What are the different cycles within the overall implementation project for the solution?
- What is the estimated time for each cycle?
- What are possible limitations to implementation, e.g. coverage of certain countries and industries, and what customisation is needed to overcome them?
Cost optimisation is another key challenge. Cost minimisation may present unacceptable levels of risk or inflexibility
- What are the estimated average recurring annual licence costs?
- What are the estimated average recurring annual support costs?
- What is the pricing structure: per user, variable by client's revenue, or a fixed licence fee?
One-off front costs for implementation will differ between vendors and will also depend on your organisation’s requirements.
- What are the estimated one-time implementation costs? (including system setup and configuration, interfaces, workflow development, data migration, testing, go-live support)
- What are the estimated training costs for the solution?
- Can you clarify the pricing structure for your set-up and implementation costs, for example, is it fixed or variable by client's revenue?
How well does the software meet your specific requirements? Key requirements might not be satisfied by all vendors. On the other hand many functionalities are non-differentiating.
- Do you have specific requirements which you should use to differentiate between the vendor offerings?
- How does the solution support multi-GAAP reporting?
- How does the solution support multi-currency accounting?
- Are the business transactions recorded in a single table or in a series of linked tables for, say, AP, FA, AR?
- What are the solution’s near real-time, in-memory processing capabilities?
- How does the solution support drilldown from General Ledger totals to underlying records in sub-ledgers?
- How easy is it to add customisations to the core solution?
Considering how the solution can be integrated with your existing technology and systems is yet another key challenge. Ultimately this defines how simply you can run the solution.
- How can the ERP system connect to source systems?
- How easy will it be to implement and maintain the interfaces?
- Which integration tools / options does the solution support?
Ease of use, availability of technical support and other factors determine the overall user experience.
- Overall, how intuitive and easy-to-use is the software?
- What facilities are available to provide technical support to customers?
- How well does the solution support mobile working - which tasks can be performed on phones / tablets?
- How frequently are upgrades required?
Cybersecurity, physical security of data centre sites, segregation of duties, connectivity between systems and user access control are all key aspects of security.
- For cloud-based solutions only: how are reliable back-up and recovery measures ensured?
- How can adequate connectivity between systems be ensured?
- Where is the data stored? (For cloud-based solutions specify the data centre location(s) for both production and recovery sites)
- How is user access management (UAM) to the different transactions and segregation of duties controlled?
The overall capability and experience of the vendor including location (global/local footprint) and the vendor’s business model.
- How proven is the ERP product in the market – what is the installed base in your industry, and for how long has it been in use?
- What share of its total revenue does the vendor generate with this product?
- Where is the vendor based?
- How many clients are there for the vendor’s product globally?
- What client categories does the vendor product cover?
- How many implementation partners does the vendor have, both in Switzerland and globally, for a given product?
- How much does the vendor invest in R&D?
Kick-start the journey
Where do you start? A step-by-step and well-structured evaluation process will help you understand your requirements and make a sound decision about whether to enhance or replace your current ERP system. Initial discussions might trigger a more holistic assessment of existing systems. Hence it is necessary to research potential dependencies and define the scope. After this, the journey to successful implementation of an ERP solution can begin.
Now it’s your turn to solve the ERP riddle…
A thorough assessment should be the basis for any decision regarding your future IT systems landscape. The ERP Playbook will give you insights into a well-structured evaluation process and provide you with the key considerations for making an informed decision.
If you would like to discuss your ERP journey in more detail, please do not hesitate to contact us.
*Upon request Deloitte can organise a meeting or webinar to further discuss the Deloitte ERP playbook and its benefits.