Nine Keys to Screening ERP Software References

By Sheldon Needle

Everyone recognizes that one of the main steps in due diligence for a manufacturing ERP software purchase is asking for and contacting references for that product.

And yet, it can also be one of the most useless, or even misleading, items on the due diligence checklist. Why is this the case for a seemingly simple and straightforward activity? After all, all you need is a checklist of questions to ask about the product and how the vendor handles it, right?

I’m afraid it’s much more than that if you really want to dig deeply into what the software can or cannot do for your operation.

Here are nine critical issues to keep in mind when checking references for a new ERP or MRP system for your manufacturing operation:

1. Who are you talking to? – was that person intimately involved in the planning and project management? Are they familiar with the details of all the bumps and curves involved or at a higher level and unfamiliar with some of the knotty issues that came up and how the vendor may have helped or hurt them during training and implementation.
2. Ask all the pertinent questions, not just are you happy with the system? Cover such things as do you think the vendor was honest and forthright in their dealings with you. Did the final cost come anywhere near the initial projections from the salesperson? Was the final contract fair to both parties. Did you miss covering any important items?
3. Ask open ended questions, not yes/no’s. For example, rather than say “are you satisfied with the work in process report for that system, “ ask how do you feel about the work in process report? You will learn much more from open ended questions than yes/no’s
4. Ask the reference if they have been given any financial incentives to be references. Some vendors will offer reduced or no maintenance fees for acting as references.
5. Ask if they get many reference calls from prospects. This could indicate that they are one of a very small number of customers who are willing to serve as references and would be a red flag.
6. Whenever possible conduct your reference checking at the customer site. They will take you more seriously and you will learn much more about the software when you establish a face to face, personal connection.
7. What to ask about. Most software buying prospects want to know details about scheduling and available to promise, work in process tracking, integration to accounting, job profitability tracking, demand planning and forecasting, workflow flexibility and ad hoc queries and reporting.
8. Compare apples to apples. Get references who are similar in size, industry, IT expertise and requirements to you. Major variations in any of these criteria makes references less credible.
9. Be sure to cover the training and implementation phases. Was the project manager competent? Did he protect your interests during the project or was he mostly interesting in pushing everything along to meet the schedule even when serious compromises were necessary?

Summary

There is an art to checking references and getting the relevant information you need. It requires finesse and expertise on the part of the software buying prospect. Being brief and just asking yes/no questions can leave you far less than you need to make a judgment about the ERP vendor.

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