Evaluate your ERP Service Provider before awarding the project

As we entered in 2010, business bid goodbye to recession and economy started looking up once again. ERP projects, once again have become the toast of the IT landscape of an organization and the service providers have revamped their sales pitches as well as stories on their successful projects with magnified benefits. Lot of times, SMB organizations get lost in these sales pitches by the flashy service providers and take a decision that backfires after some time when they see either the quality of the resources is not as expected or the provider did not have prior experience in their niche industry or the provider under quoted just to build their competency in that area/technology and lacks any best practices, tools or prior experience. There are more reasons other than these 3 which start pinching the SMBs.

Though key research websites like Gartner, Forrester, AMRResearch etc. keep on evaluating the service providers and sell their reports to their clients but still either these reports do not cover some aspects that SMBs will want details on or these SMBs are reluctant to buy these costly reports just to know which service providers are good. So, what do we do to tackle this? I understand that not all smaller companies have the expertise and the resources to do a research on this subject and come out with their own decisions but a checklist of parameters will always help them to ask the prospective providers certain questions which can assist to take informed decisions.

Normally, we tend to gather information on:
  • Size and reach of service provider
  • Related industry Expertise
  • Global capabilities like offshoring and BCP, DRP
  • Prior experience in related technology
  • Related technology practice size
  • Success stories/case studies
  • Alliances, Awards and other industry recognition
  • Experience in Implementation and Support of ERP applications
  • Length of period they are in business
  • Financial stability
Above information is very important but is not sufficient at least for SMBs who have less capacity to take risks. The additional parameters that I suggest should be part of your evaluation exercise are:
  • Ability & pace to deploy resources (can be gauged from their average bench size)
  • Specific language skills availability (specially for European organizations)
  • References from few customers in similar industry
  • Geographical presence and experience
  • Accelerators availability for related technology
  • Project Management resource pool & success stories
  • Change Management and Knowledge Management practices
  • Training tools and techniques
  • Automation capabilities in testing
  • Related industry specific process experts availability
  • Quality control and management practices
  • Process re-engineering experience
  • ERP related products or enhancements/bolt-ons availability
  • End to end solutions capability that includes licensing co-ordination, server sizing, application hosting, solution deployment and support
  • Production cut-over or black-out period practices
  • SLA based performance report card from previous engagements
  • Attrition management to make sure project is not negatively impacted by it
  • Thought leadership examples
  • Finally check the billing rates, overall cost, productivity track records and their overall value creation ability
Though some of the parameters can be measured easily by building a cross question list and seeking answers from prospective vendors but some will need deep dive and probably a site visit of short listed 2-3 vendors will be extremely helpful in evaluating and selecting an ERP service providers that can partner with you for the business transformation exercise you are planning to take in your organization.

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