In the Market for New ERP Software—Reasons Why You Might Be Chasing Rainbows!

By Sheldon Needle

Many companies embark on new manufacturing software project. But despite having plenty of reasons to move ahead and buy a new ERP or MRP system, only a small percentage ever complete the process. An enormous amount of time is wasted by both the manufacturing software vendor and the prospective customer “chasing rainbows ” Why does this happen?

My experience over the years leads me to identify 10 key reasons:

1. Too many decision makers are involved. It used to be mainly one key person who called the shots on software. Now you’ve got multiple staff in various areas and the person I like to call the “software champion” has to navigate a range of political issues and resolve conflicting agendas. This requires a lot of skill!
2. The search for software starts due to a crisis. For example, customer orders are lost or shipped late and certain needed reports cannot be prepared. In reality, the company needs help with capacity planning, tracking work in process and a good scheduling capability. This means new software. But the crisis subsides and the MRP software search project gets put on the back burner.
3. No firm budget is established. Here, management refuses to identify a figure because it means they are committing to an amount and they don’t really want to be held accountable for either overshooting or underestimating the expenditure.
4. Business processes are not carefully analyzed and improved as part of the software selection process. When this necessary step doesn’t happen, the confidence of staff in evaluating systems and making recommendations is significantly weakened.
5. Company staff does not have the necessary expertise. A typical example is when a technical IT professional is put in charge of the software search and his/her expertise is primarily in networks and databases, not application software.
6. Company staff are not on the same page. This might be for major points of pain and/or corporate goals or the ERP/MRP priorities. And unfortunately, there is no one in charge who has the necessary skills to mediate conflicts and keep the project moving along.
7. Company resources are spread too thin. Management does not allocate the necessary time for staff to do proper due diligence. Therefore, shortcuts are taken which weaken the case for a confident selection decision
8. No methodical process is in place to go about the selection process.
9. Search staff is unable to sell the benefits of preferred software. When this happens it’s often the result of not including management up front from the beginning and keeping them involved in the process. Management becomes uncomfortable in making a major expense decision because they really don’t understand what they are buying.
10. The software vendor does not understand the company business. Often the vendor sales rep does not clearly understand the industry requirements and does not develop the needed confidence on the part of the buyers. An example, might be that the salesman is talking to a process manufacturer and he/she only has experience with discrete manufacturing.

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