Technology driven vs. Scope driven ERP selection

Selecting a vendor for a new ERP solution should not be taken lightly. Buying an ERP platform is a costly and critical investment that affects your company’s future competitiveness and performance. Research shows that many initiatives fail to deliver the promised business value. Success limits factors like technical challenges, implementation time, resource constraints, scalability limitations, and upgrade problems.  

How to start

Since a good start is half of the work, selecting the right solution will cause the digital transformation. Choosing the correct tool is essential in this phase. Everybody who has ever been involved in an ERP selection process will agree that software selection processes tend to be time-consuming and complicated. In my years of working as an ERP consultant, I have never run into an intuitive, simple, and cost-effective method to select the right solution. Most methodologies require expert skills and large amounts of time and resources.

Two ways of selecting

In general, I see two main strategies to select the right solution. One can either go for a scope driven solution or a technology-driven approach.  

Scope Driven

By a scope driven selection process, the focus is mainly on supporting the Business Processes. In the selection process, you look at the business requirements and try to find the best fit based on these processes. The main benefit of this approach is that you can find the solution that supports your business needs, and little to no additional tooling or customizations will be required. My recommendation would be to look at vendors that sell niche solutions if you go for this approach. This way, you can benefit from best practices while having a solution tailored to your need.  

Technology-driven

When you take a technology-driven approach, the leading dimension is IT Infrastructure. The criteria for selection is to select the solution that your preferred supplier delivers. The main benefit of this approach is that you limit the number of vendors. Besides that, this approach does help to get the full attention of your provider because they receive a large chunk of your IT spend. A downside to this approach is that company-specific requirements might not be covered in the solution, and you might need to customize company-specific processes. 

Nevertheless, I believe that for most of the methods, a standard ERP solution should fit. Most vendors have been coding software for many years and gathered the requirements of many companies.  

Crucial factors for selection 

For both strategies, it is off course, essential to start with identifying the critical business processes that you are willing to automate and consider the strategic goals of your company. The way you work today is most likely not how you will be working two years from now. Spending a lot of time on a selection process can result in having different goals and ambitions when you are ready to sign the contract. Making sure you select a future proof solution will allow you to act on changes and implement a solution that remains a good fit for your organization.

Think about having the right skills and knowledge of applications, understanding business requirements, constraints, and concerns of the organization and its industry and the ability to meet future needs.  

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