It is that time of the year again. Companies look back at their results and look forward creating their budgets at the end of accounting year, which most of the times coincides with the calendar year. That is that time of the year, where management in organizations decide whether they want to invest into a new smokehouse, a new cooler or a new business application and pencil in the numbers they want to spend on each. Comes January, you see a bunch of so called RFI’s and RFP’s flying around the industry. As a sales professional, I don’t need to iterate, that 80% of these are spoiled, even if the government creates them. In 80% if the cases, some company is already on the inside track to earn the business and the customer is pre-disposed a certain solution already. The process is just needed to justify a decision that has already been made. Nobody admits this of course, because the end is bitter for both participants, the buyer that cannot justify the decision and the seller that does not want to admit that he doesn’t stand a chance to earn the business. Yes, and there are still the 20% that may run an honest competition in this process, or at least honestly believe that they run an independent and neutral evaluation. (Hint: If you have a ‘neutral consultant’ involved, chances are that he is predisposed to ERP systems he know and has experience with, for good or bad).
So let’s talk about the 20% and assume that their approach shall lead to the best solution. Well, it doesn’t!
Month to date, I saw quite a few software evaluations and their approach has changed. To some degree for the better: Most of them are no longer asking for ‘ballpark pricing’ where vendors state like $250,000 to $1,5 Mill or something silly. They also don’t ask anymore these stupid questions about company size, number of employees etc. because these things don’t matter in today’s technology anymore. Companies must have recognized that technology companies burn the candle on both ends usually. Companies succeed very fast in today’s world, look at Zynga, Facebook, Netflix and others, most of which have not been around 10 years ago. So these company credibility attributes don’t really matter anymore early in the evaluation cycle as does not the price.
The RFI’s and RFP’s I am seeing are recognizing these trends. They focus heavily on the feature set of the applications. They ask for ‘catch weight handling’, ‘shelf-life checks’ in shipping and production planning and other features. I actually look at that as a positive trend, unless of course the process is spoiled. Sometimes you tell by the language of the RFI, what ERP System this is already geared to, what system the author knowingly or not was pre-disposed to. But the features alone don’t make a good system.
Just because you use the best musicians and the best instruments does not mean you have the best sounding orchestra. It is as important if not more important, that they play well together and that they play in an environment that supports the best sound possible. This is not very difficult to understand.
Looking at any meat business, you have basically 4 major processes. Accounting is one, that actually does not matter much in software evaluations, since the differences here between different solutions will not affect much your business. You have three major others that do:
- Order-to-Cash: Your entire sales process from customer contracts, order taking to order fulfillment and invoicing.
- Production: From Scheduling to production execution, monitoring and yields including plant maintenance (to make products) and HACCP (to make safe products)
- Procure-to-pay: To get the stuff you need to make products.
I think companies would be much better served to forget the features, but look at their processes. The success of the organization and the benefits of the of the technology investments depends on how well these features are orchestrated. You won’t find this questions that vendors answer with yes/no/maybe. You also don’t find out how well this system plays in your venue, based on the existing skills, infrastructure and user environment. Rethink the way you investigate software and ask yourself how you can get the best solution for your company, not the system with the most features.