Juanita Potgieter 8 min read

Six critical steps to prepare for ERP evaluation

Is your company ready to make the leap from an accounting package to an Enterprise Resource Planning (ERP) solution? If so, the necessity for careful, detailed and exhaustive preparation can’t be stressed enough.

It’s called a leap for a reason: there is a world of difference between the systems used to run small businesses, and the full-blown, organisation-wide systems known as ERP.

But firstly, why would you implement an ERP? Very briefly, scale is often a major motivator, where accounting packages are no longer able to provide complete control and visibility of your organisation. There is more to it, too: you are likely to be alerted to aspects of your business you unaware of. We’ve seen ERP information help companies change direction, alter product lines, be more accurate on SLAs and provide better customer service.

And secondly, a warning of sorts. ERP projects are not simple, nor cheap, nor even enjoyable. They are demanding and fraught with risks. Remember: this is not an IT project, nor is it a finance project; it is a business project and must be driven with the business benefits being the goal. Getting to the gold takes discipline, commitment and many long hours – and it all starts with the right preparations. So, let’s get to those six critical steps.

1. Think long-term (like a marriage)"

Getting married is a big deal because it is supposed to be for life. The same level of commitment must go into your ERP project; the software you select today should be suitable for the life of your company.

That means short-term thinking is a non-starter. It also means you shouldn’t cut corners, the easiest of which is to purchase based solely on price or snazzy features your business doesn’t need. ERP systems are extremely ‘sticky’ once implemented and changing is not easy (nor cheap). Budget systems have a habit of becoming money pits if they don’t meet requirements. And always look for flexibility. Your company will change in future, make sure the system can change with it.

2. Know your business

How well do you really know your business?
A new ERP system isn’t just a major investment; it’s a catalyst for change. To create a positive environment for change, you first need to take a thorough, honest look at how your business is performing. Are profits stagnant or declining? Are competitors getting ahead – or worse – taking business from you? Are staff motivated? How old are the business systems? Are they working well, or hindering progress? Are you equipped for growth? An Aberdeen Group survey [3] identified “managing growth expectations” as the key challenge facing SMEs. To understand just where your business is heading, you need everyone’s input.

Knowing your business isn’t only about knowing the answers to these questions. It also depends on talk to your employees, especially those doing core data entry. Are they doing things without knowing why? Are there basic processes which take far too long?

Talk to the person on your service desk. Identify and quantify spreadsheet use (spreadsheets are often a ‘canary in the coalmine’ which shows how people are working around/outside of company systems).

These factors and many more must be understood before looking at an ERP solution. The answers to these questions will help illuminate what you want to achieve with the system.

3. All aboard

Success in an ERP implementation depends on top to bottom buy-in. You need the support of everyone in your organisation. Your sales staff, accounts staff, customer service staff, supply chain staff… all have their own perspective of how your business works and their input should be sought. By valuing their views, your staff will help to create that positive environment for change.

And ‘tone from the top’ applies, big time. CEOs, CFOs and managers must drive the project and visibly demonstrate commitment to and enthusiasm for it.

4. Establish your implementation team

The importance of the right team cannot be over-stated. Be sure your implementation strategy identifies everyone whose input is needed during the project, and that they are given the time to provide that input.

Keep the numbers as tight as possible: the head of each department that will use the system daily needs to be involved, so the decision-making process is clearly defined. At the top, you need someone with the oversight and the energy to move the process along. They’ll be the key liaison with the vendor’s representatives and ultimately, they’ll become the champion of the new system.

There will inevitably be disruptions, but disruption is also a positive tool for change. If your strategic goals are clearly defined and the time is taken to achieve them correctly, you’ll end up with a system that everyone is happy with – not just because it does what you intended, but because those who are using it have a sense of ownership and empowerment. That’s the aim of a successful ERP implementation.

5. Know your needs

Have a clear picture in mind why you need an ERP system. Once the shortcomings in current ways of doing things are known, move on to scoping the desired benefits. They should be specific and measurable. With these goals in mind, you can then start to look more closely at what you need from an ERP system.

6. Be specific about the demo

This is where things start to get exciting: with the above sorted out, you’re ready to start canvassing the market to make a software selection. That’s usually done via a Request for Proposal. You’re also equipped with the know-how to make specific requirements about what you want to see in a software demonstration: include in the RFP instructions to vendors or solution providers to address the scenarios and processes are critical to your business and which you want to see handled by their proposed system. The more you drive the demo, the more benefit you will get from it.


Juanita Potgieter

With over 18 years’ experience in various marketing and business development fields, Juanita is an action-oriented individual with a proven track record of creating marketing initiatives and managing new product development to drive growth. Prior to joining Verde, Juanita worked within strategic business development and marketing management roles at several international companies. Juanita is certified in both MYOB Advanced and Oracle NetSuite.