If you’re planning to evaluate and select a new accounting and financial or ERP system, you may have been told that you’ll need a good RFP for your ERP selection process. Or, you may have used one in the past and are wondering how best to update it to cover your current evaluation needs. In either case, here’s my advice: back away from the RFP!
I know this may seem counter-intuitive. After all, how else can you make an objective “apples to apples” comparison of all of the vendors? Well, for starters, most of us would agree that any self-reported information should be viewed with a grain of salt, and that’s one of the biggest challenges of even the world’s best constructed RFP – the information supplied is self-reported by the vendors.
The second biggest issue with RFPs is that they tend to waste everyone’s time by scrutinizing insignificant areas of routine processing, while giving short shrift to your business’s most critical process needs, whatever those may be. A much more productive use of time would be to take this opportunity to really dig in to your key business processes, so that you have a clear idea of what your top challenges currently are.
Once you’ve figured out the exact nature of the business problems that you’d like your new system to solve, select three or four vendors and ask them to demonstrate how they would solve those problems for you. For example, if one of the business issues that you’d like to solve with your new ERP system is how to handle very complex revenue, billing and/or contract management scenarios, that should be a primary focus for your evaluation. Identify several other business issues that you’re currently experiencing, and you’re on your way.
Why this change from the traditional RFP? Today, most of the information that an RFP would have uncovered in the past is publicly available. There are dozens – if not hundreds – of ERP evaluation and selection websites and tools, and great information is readily available on forums and blogs. (Please note that many of these sites are aligned with specific vendors, and that many of the selection tools rely on self-reported information. The one exception to the latter that I’m aware of is The Accounting Software Library – the publisher of that tool actually tests each application, so there’s no fudging the results. If the vendor that you’re looking at chooses not to participate, you might want to think twice about that vendor….)
The second reason that RFPs are no longer as useful as they once were is that most of the top selling systems have reached functional parity for their core processes. Face it, there are just not going to be a lot of different bells and whistles when you compare one General Ledger module to another. Some functionality has simply become a commodity, so it’s often a matter of personal preference, kind of like Hellman’s versus Miracle Whip.
An investment in a new accounting and financial or ERP system is an important decision, and one that can take a significant amount of time and money. Do yourself a favor and focus on what is unique and important to your business, select the vendor who does the best job handling that, and you’ll have more time to devote to the activities that provide the highest value for your company.
By Caprice Murray, Tensoft, Northern CA Microsoft Dynamics GP Partner (http://www.tensoft.com/)