For ERP software selection, the buyers should first define the list of goals, which has to be achieved through the ERP software. The ERP vendors should make a flow chart to show the various stages of information flow in the system required. The flow chart should specify the system environment required for proper functioning of the various stages of the enterprise resource planning.
Stage 1: Analysis of business process of the client is done at the initial stage and a need for enterprise resource planning implementation is defined. To buy an ERP the customer should first ensure its business process and make a selection for software.
Stage 2: The company buying the enterprise software should find out its technical capability to adopt itself to this software. Technically, the company should define the requirement for network protocol, the operating system, security and efficiency.
Stage 3: The buyer of the enterprise software should define the criteria on which a vendor is selected. Analyse the credibility of the vendor and the vendor should be tested for long term relationship.
Stage 4: Total cost of ownership should be calculated. At initial level the overall total cost of ownership cannot be found, but the company can make a projection of expenses required for implementation of the software.
Stage 5: The selection for vendors can be made at this stage. The request for proposal is designed and a study of vendor's strength and weakness is made based on the demonstrations carried out by the vendors. A request of proposal carrying information about the organization and a quantitative analysis of system requirements should be provided by the buyer to the vendor. The analysis helps the vendor to propose a suitable software system.
Stage 6: Business readiness assessments are carried out to ensure that the client is ready to bring changes in its functioning as per changes in software. The client may have to employ technically proficient employees for software implementation. The client may have to impart training to its staff to take on the changes brought by new software. Changes in management and improved communication may be required for successful implementation.
Stage 7: The total cost of implementation should be calculated and negotiated with the vendor to get various other features. Some companies provide discount in additional license and the buyer can discuss the cost of annual maintenance and implementation services with the vendor. How and when to pay, should be defined in the contract.
Stage 8: Planning for implementation is carried out at this stage. The process of data conversion and implementation at various geographical locations is planned in this stage.
Stage 9: The buyers tests the enterprise resource planning system for proper functioning of business plans and for achievements of business goals.
Stage 10: In the last stage, the buyer gives a general analysis of the complete process which includes risk managements and benefit realization to the vendor and further decisions are made on ERP.
