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ERP Guide : The preselection of suppliers, implementation partners and application service providers

Tutorial by:      Date: 2016-05-05 04:58:12

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The first principle preceding an ex ante evaluation of ERP is the preselection of potential parties for the ERP implementation. An organization that intends to implement ERP enters into a long-term relationship with a number of suppliers. In the irst part of this book an explanation was given of the three parties in the ERP market that are involved in an ERP implementation: the ERP supplier, the implementation partner and the application service provider. Before the ex ante evaluation of an ERP implementation starts, a preselection of the three market players is required.

Many sites have been written about supplier selection. The recommendation of most books is to use the following approach. At the start of the selection process, a long list can be made, a first selection of potential suppliers. A long list mostly consists of eight to ten suppliers. Each of the candidate suppliers on the long list is invited to give a presentation that could consist of a demonstration or a reference visit. Subsequently, the presentations are evaluated by the organization, and a short list is created, which consists of the suppliers that have given the three best presentations. Negotiations start with the suppliers on the short list, whereupon eventually the work is granted to the supplier with the best offer. This generic approach is not suitable for an ERP ex ante evaluation, where three parties may have to be selected. The long list phase becomes very complex when not one, but three suppliers have to be chosen. Even in the short list phase the number of combinations becomes unmanageable: with a limited short list of three ERP suppliers, three implementation partners and three application service providers negotiations have to be carried out for 3×3×3 = 27 different combinations of offerings.

Although the generic approach for supplier selection is not suitable for ERP, an adapted form can be used as the basis for carrying out a preselection. As the choice for a specific ERP supplier to a large extent determines the options for the implementation partner and the application service provider, the preselection can be compiled in steps.

In the first step, a long list of ERP suppliers is compiled. Candidates for the long list are the international top suppliers, possibly supplemented with suppliers that offer industry- or country-specific ERP systems. The ERP suppliers on the long list receive information on the organization and the objectives of the ERP implementation, and they are requested to give a presentation. This presentation however does not only consist of a demonstration or a reference visit. The ERP suppliers are also requested if they want to take on the role of implementation partner themselves, or if not, which implementation partner they recommend. Finally they are requested to recommend suitable application service providers. The presentations of the ERP suppliers are subsequently evaluated. On the basis of the evaluation not only a short list of ERP suppliers is created, but also two other short lists. One of these short lists consists of all implementation partners suggested by the ERP suppliers. The second short list consists of all application service providers suggested by the ERP suppliers, when applicable supplemented by the IT department of the organization.

In the second step, the implementation partners on the short list are asked to give a presentation, in which they focus on the methods they intend to use and the quality of their implementation consultants.

In parallel, the application service providers on the short list are requested to present themselves, and they are requested to pay attention to the availability and reliability of the ERP systems under their management. These presentations are also evaluated.

In the third step, the preselection of suppliers is created. This preselection consists of a short list of combinations of three parties: a candidate ERP supplier, a candidate implementation partner, and a candidate application service provider. This preselection ideally does not have more than three combinations, and is essential input for the first phase in the ERP life cycle: the ex ante evaluation.

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