Consulting Partner and Product

Selection
Session XII
Learning Objectives

1 Consulting Partner Selection

2 Product Vendor Selection

Consulting Partner Selection

 Can be selected for

 Preparing RFQ
 Implementation
 Post-Implementation

 Competencies required shall differ across phases

 It is not uncommon even to see different consulting companies are responsible for
 Functional and Developmental Aspects
 Technical Aspects

 How about in-house consulting team ?

 Better process knowledge, Poor Package knowledge
 Implementation is not their core competency
 May lack ERP project management skill
 May lack methods and tools of consultants
Consulting Partner Selection - Criteria

 Industry Experience
 How many implementations have been carried out in the customer’s industry
 Awareness of industry issues and processes

 Process Consulting Experience

 Best Practices that consulting partner can bring during Blueprinting Stage
 What is the industry benchmark for given process performance
 Whether the consulting partner can suggest areas of improvement

 Client Reference and Satisfaction Level

 Ability to provide end-to-end consulting [Pre-Implementation, Implementation and Post Implementation]

 Project management expertise and Knowledge of Tools

 Presence in many Geographies

 Global Delivery Capability

Consulting Partner Selection - Criteria

 Reputation in the industry

 Presence in Magic Quadrant

 Price and Value for money

 Activity based pricing
 Milestone based pricing
 Consulting Partner - Ranking

Criteria Weight Vendor 1 Weighted Vendor 2 Weighted Vendor 2 Weighted

Score Score Score
(Weight*Score) (Weight*Score) (Weight*Score)
5=Good, 1=Poor 5=Good, 1=Poor 5=Good, 1=Poor

Industry Experience 15%

Project Management Experience 10%
Process Consulting Experience 30%
End-to-End Service 5%
Client References 15%
Global Delivery Capability 5%
Methods and Tools 5%
Presence in many geographies 5%
Reputation 5%
Product Vendor Selection

 ERP Product Package Market

Tier I
SAP,
ORACLE

Tier II
JD Edwards, Infor, IFS, Microsoft,
Lawson, Epicor, TCS ioN

Tier III
Small ERP Players
Product Vendor Selection – What does it cost ?

 The software installation has so many variables and total cost will depend on:
• The number of divisions it will serve
• The number of modules installed
• The amount of integration that will be required with existing systems
• The readiness of the company to change

 Among 63 companies surveyed—including small to large companies across industries, the average
TCO was $15 million (the highest was $300 million and the lowest was $400,000).
Product Vendor Market

SAP—Solutions are for all types of industries and for every major market. Its products include mySAP
Business Suite, SAP NetWeaver, and solutions for small and midsize companies (e.g., SAP Business One
and SAP All-in-One).

Oracle/PeopleSoft — (Acquired PeopleSoft in 2004) Provides solutions divided by industry category.

TCS Eon – Higher education ERP

Campus Management - Higher education ERP

Great Plains—Part of the Microsoft Business Solutions group of products, its solutions can be tailored
according to business needs.

Epicor—Focuses on enterprise software solutions for mid-market companies.

Product Vendor - Criteria

Consider the following for vendor selection.

 Other businesses using the vendor

 The vendor’s financial position

 The vendor’s implementation philosophy and support issues

 The hardware and software infrastructure used to support the ERP

 The vendor’s direction and currency of software (technology)

 The vendor’s release and upgrade strategies

 The vendor’s user-base involvement in defining future functional changes

 The vendor’s development and maintenance resources

 The vendor’s partnership with other third-party applications

Matching User Requirement to Product

 Identification and documentation of user and system requirements can be done by documenting
current legacy system functionality or by using business process re-engineering.

 Two major documents are often a result:

• Data and functional flow of departmental or business processes.
• Table or description of functions in each department and the level of importance of each
function.

 Identifying vendor system functionality based on documented processes will help to purchase a
system based on facts. (Assumptions are avoided)

 RFI may be called for

• Feedback on how close our processes are inline with the system features
• Whether our processes are rationale and reasonable

.
Request for Bids (RFB)

 Often known as Request for Proposals (RFP)

 Expensive and time-consuming process for both the company and vendor, but it can yield
significant software savings when done right.

 RFB should always include.

• Type of ERP system the company wants with specific functionality
• Specified hardware and software infrastructure
• Training requirements
• Any specific contract issues required by the company
• Deviations if any to be mentioned clearly
Product Vendor Selection Process

 Business users will need to evaluate functionality.

 IT team will evaluate the technology requirements.

 Purchase / Contract team will need to evaluate the contract and pricing of the system.

 No vendor will meet all requirements so vendor discussions and negotiations should focus on the
best fit for the business.

 Develop and analyze the total cost of ownership (TCO). [Refer Vinsun / San Diego Case]
TCO Components
 Hardware
 Software licenses
 End-user terminals
 Back up power
 Network costs
 Annual maintenance
Implications for Management

 Management must play a role in choosing the right system that will meet the company’s
needs and requirements.

 Management must allocate enough time to evaluate the system, observe a complete and
comprehensive demonstration, and communicate to references and others using the
system.

 Discussions with the vendor about future improvements and direction must be
scheduled.

 Negotiating with two vendors is time-consuming, but it will yield a better purchase price.