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Chapter 6 • Software and Vendor Selection 169

PREVIEW
The selection process for Welch’s Foods shows that there is good competition and value in going
through an elaborate evaluation process to determine what ERP best fits the company needs. The
vendor is often blamed for an unsuccessful implementation. This chapter will discuss how that is
usually not the case and how, from the beginning, to best position a company to implement an
ERP successfully. Once the decision or case has been made to replace the existing application
system(s), the initial step involves the purchase of an ERP system. The selection of a vendor that
best meets the needs and long-term direction of the company is a critical first step in a successful
implementation.
In selecting a vendor, a well-understood selection process needs to be utilized. Depending
on a given company’s experience in purchasing an ERP system, that company may want to bring
in a specialized consulting firm to assist in the selection process. In any event the steps involved in
selecting a vendor generally are based on best fit of an ERP to business functions and the overall
ERP vendor’s product performance in the market.

VENDOR RESEARCH
The first step in selecting an ERP system is generally to research vendor ERP systems on the
market and to identify a short list of vendors who will help to shape business requirements.
This process is especially helpful for companies moving from aging legacy systems and
technology to current and state-of-the-art technology. A state-of-the-art ERP system

BOX 6-1 High-Level ERP Purchase Process

1. Vendor research and information gathering
2. High-level vendor demonstrations and evaluation
3. Needs and requirements assessment using current legacy systems, business process reengineering
analysis, or both
4. Development of request for bid or proposal (if needed or desired)
5. Release request for bid to vendors
6. Analysis and selection
Evaluation of bids
Functional evaluation
Technical evaluation
Vendor-detailed demonstrations
Contact references
Develop a total cost of ownership
7. Vendor(s) negotiation
Contract review and change
Pricing—software, maintenance, and consulting support
8. Purchase system (let the fun begin)