MEMORANDUM

To: CEO of the organization

From: Chief Information Officer

Date: June 8, 2021

Subject: Choosing a consultant for implementing new ERP

Implementing new ERP system in the organization is a rare event. Few organizations
will take on this challenge more than once in a decade.

In the 1990’s the demand for ERP applications grew faster, it exceeded the supply of
qualified consultants that time. Consulting firms promised to provide consultants with
good reputation, product knowledge and industry experienced, but they delivered an
incompetent one. Since there is a lack of supply of consultants, they took that
opportunity just to get contracts. There are a lot of common problems back in the 90’s,
in fact there are a lot of lawsuits that have been filed against the consultants of failed
ERP projects.

Experts continue to show that ERP failure rates are still as high, even among those
organizations that use outside consultants. There are companies that relied on experts,
but somehow their ERP implementations went over budget, it took much longer than the
expected, and failed to deliver the business benefits they had expected.

We need to have a thorough selection of the right consultant. We need to do the

following:

 Interview the staff proposed for the project and draft a detailed contract
specifying which members of the consulting team will be assigned to which tasks.
 Obtain an agreement in writing as to how staff changes will be handled.
 Conduct reference checks of the proposed staff members
 Align the consultant’s interests with those of the organization by negotiating a
pay-for-performance scheme, based on achieving a certain milestone in the
project
 Set a firm termination date for the consultant. There Is a lot of evidence that
consulting arrangements can become interminable, resulting in dependency and
an endless stream of fees.
The right selection consultant can shorten the selection process and offer you a better
chance of finding a system that will be a good match to the company. Getting it right can
set up a business for years to come while getting it wrong can lead to the end.