How to Choose an ERP Consultant

How to Choose an ERP Consultant

Managing all aspects of an enterprise system selection and ERP implementation requires time and expertise. One way to do it is to do-it-yourself (DIY), which is possible with available internet searches and with in-house program managers but when we talk about the impacts to your broader business, it is too important to take a risk on. Most in-house personnel lack the combined in-depth knowledge of managing major technical system implementations, broad understanding of business processes, and experienced organizational change leadership to invest in running a minimized-risk enterprise system implementation.

What is an ERP Consultant?

In such a case, a guide can help in handling your enterprise system selection and implementation including planning, solicitation, selection, implementation, and establishing long term support models. These guides or expert system implementation professionals who understand the technical process, change management, and process development world are known as Independent Enterprise Resource Planning (ERP) Consultants (or advisors). Their job is to provide unbiased, deeply experienced advisory services to help you through the complex system identification, selection, and high-risk implementation.

Some of the important aspects ERP consultants can help in are your immediate and long-term priorities such as:

• System Identification, Solicitation, Selection, and Contract Negotiation
• Solution Architecture
• Deployment Roadmaps
• Budget Planning
• Resource Planning & Team Development
• Governance Structure Development
• Implementation Partner Identification, Selection, and Contract Negotiation
• Implementation Program Management
• Process Improvement
• Organizational Change Management

Before choosing the right consultant for this journey, here are five things that you should consider.

1. Breadth of Experience

The first thing that you should consider, when hiring an ERP consultant, is the experience and professional background of the prospective consultant. Adequate experience in the full implementation lifecycle of various software systems and dealing with clients is of the utmost importance. Since you would be trusting the future of your company to the consultant, she/he must be well-qualified. Ask for references to discuss the way your prospective advisor deals with clients.

Experience needed for ERP Consultants to provide unbiased advice and bring best practices to minimize risk includes:

• Industry – Look for a consultant who has served your industry, particularly with regard to compliance and regulatory requirements.
• System Functionality – ERP Consultants who have previously implemented cross-functional solutions such as full ERP solutions that include accounting, supply chain management, manufacturing, and human resource management will understand the breadth of issues that will be addressed during your implementation. Functionality is more important than the brand of software because the consultant who has implemented multiple software systems within a business function will have a breadth of best practices to draw from.
• Business Function – Seek out an ERP Consultant who has worked directly in a business function such as accounting, supply chain management, or manufacturing and ideally has management experience in that function. Those consultants will understand how businesses operate, the ebb and flow of peak demands within each function, and the information flow throughout business operations.
• Implementation Scale – ERP Consultants who have managed implementations for Fortune 50 organizations are not always skilled in managing small scale implementations for smaller businesses. The ability to scale the implementation to suit the business size is important to overall success.
• System Implementation Program Management – Make sure your ERP Consultant has experience implementing systems rather than hardware, construction, or even software development program or project management experience. Enterprise system implementations are more about people and processes than about technology. Configuration has replaced coding and your ERP Consultant will need exceptionally strong process and people leadership skills with an immense depth of leadership tools to draw from to ensure successful adoption of the new systems and processes.

Tip: Look for consultants who have both Business and Information Technology (IT) experience in industry before becoming consultants. Experience running and using systems as well as implementing them and remaining in a support role is a learning experience that greatly helps a consultant guide clients. Having business leadership experience is a critical advantage. Focus on the consultants understanding of business functionality and experience implementing multiple systems in that function to gain a breadth of knowledge. Identify consultants who are exceptional at leading through change.

2. Independence

In some cases, ERP Consultants are affiliated with software system providers or are themselves system implementors/integrators. Such an arrangement may create a conflict of interest and prevent the ERP Consultant from providing guidance best fit for the client. For example, consultants selling software implementation services will seek to grow the team assigned to your project.

If you are looking to minimize risk and bring best practices from many different systems and industries, look for consultants with no affiliation with software providers or associated technical implementation services.

Tip: Check the ERP Consultants or various software system providers “partners” websites to identify potential affiliations between the software and consultant. Similarly, be sure to understand the potential advisory firm’s full suite of services to recognize where the consultant may be biased toward certain software or certain practices.

3. Profile of Clients Managed by Your Consultant

Just like you have specialization in your business, a consultant too specializes on the type of clients who they are best suited for. The best consultants carve a niche for themselves and have solutions customized for their needs.

A consultant specializing in Pharmaceuticals or Medical Device industries would understand their needs better, have frameworks for guidance, and would understand the unique inventory management, manufacturing, and quality requirements. Similarly, someone who specializes in Aerospace & Defense would understand the unique Government Contracting and quality regulatory and compliance requirements.

Tip: Check if the consultant is supporting clients in your industry (Government Contracting, Non-Profit, Aerospace, etc.) who are also in a similar life cycle as you are. One way to ensure the experience of an ERP Consultant is requesting referrals or word of mouth recommendations. Check the consultant's old track record, his/her existing and previous clients, and their experience in working with the consultant.

4. Communication Skills

Enterprise systems deployments are complicated and the impacts to business functions creates significant risk. A good ERP Consultant should be a bridge of trust, and for that, their ability to communicate in a language that explains things simply, with specific action and steps required, is important. The consultant should be able to explain the process and status to you in a simple manner and help you manage risk in the most unbiased way.

A good consultant should also be patient in understanding the pain points that you have so that they can recommend appropriate corrective measures.

Tip: To check the communication skills of a prospective ERP Consultant, understand their governance model or strategy. Key decision handling is critical for consultants. If a consultant can handle key decisions effectively, you can trust their communication skills will be strong.

5. Bottom Line

Handling your enterprise system selection and implementation is important, especially since it determines your ongoing corporate success. If you are trusting another individual with your success, you should ensure that the individual is aligned with your expectations.

Though ERP Consultants provide you with much-needed expertise in handling your system selection, implementation, and ERP optimization, they should be selected with care.

How to Unleash the Power of Your ERP System

The beauty of using Business Intelligence (BI) tools in conjunction with enterprise systems, like an ERP, is the amount of data that can be harvested to uncover deeper understanding of business drivers. Some data types are more obvious than others and this article is intended to stimulate thinking of the potential business insights possible through BI dashboards.

“Those who do not remember the past are condemned to repeat it.” – George Santayana

Financial data is an apparent use for BI in conjunction with ERP data. Many companies track typical balance sheet financial metrics like revenue, profit, and equity. Another area many companies measure includes cash flow with measures like Days Sales Outstanding (DSO) or Accounts Payable (AP) turnover. BI empowers businesses to double-click on the details to optimize processes to proactively improve their cash position and strengthen their financial performance. Examples of processes to examine and enhance include Accounts Receivable (AR), AP, and Inventory Management. Companies can visualize data and trends using dashboards to find examples of best practices to repeat and inefficiencies that can be eliminated.

By leveraging historical data, leaders can find trends and points of inflection to drive enhancements and efficiencies. Some examples of using this type of trend analysis include optimizing preventive maintenance schedules for equipment. Another example would be looking at the company’s ability to forecast revenue, sales, and expenditures. By comparing forecasts vs actuals over time, a company may identify people who have developed best practices or models to share with the rest of the organization. Historical data can help companies look at the adoption rate of new systems by looking at the number of users over time, mean time for each process step to see if users become more proficient, and of course the use of reporting and dashboards.

Customer satisfaction is another key business and performance objective enhanced by BI reporting on metrics such as invoice rejection rate, customer retention rates, and on-time delivery. As mentioned above, BI and dashboards enable drill-down functionality to look for outliers and incorporate process changes to take advantage of opportunities and reduce risks.

BI also has the key to unlocking insights into productivity boosts. Consider leveraging historical data to look at transactions by employee, active system time by employee, processing or wait times, rework, utilization data for both human and capital investments, and labor time vs. goods produced.

Better data drives better business decisions.

Faster data enables faster business decisions.

Capital Edge Consulting is a professional services company comprised of adept problem solvers who deliver tangible results to address today’s most complex U.S. government contracting challenges. Capital Edge helps clients address the challenging regulatory, contractual, and compliance requirements of U.S. federal contracts and we have experience working with a wide variety of industries that provide goods or services to the federal government including industries such as biotech and healthcare, nuclear energy, education, information technology, non-profit, professional services, defense, and software.