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170 Chapter 6 • Software and Vendor Selection

purchase will likely mean the replacement of the current hardware and software infra-
structure. Identifying and researching all aspects of a vendor package and the platform
that the hardware and software runs on will assist companies in determining the total cost of
ownership (TCO).
In general, identifying vendors today is not overly difficult. Using current Web search
engines is a good starting point. It also helps to know what packages the competition uses.
An exhaustive list of vendors, even if you do not research them completely, is important for a
successful implementation. Another strategy to identify vendors is to ask department
managers and subject matter experts if they know of vendors that should be considered. It will
be said many times, “the process is important,” so including end users will help with change
management issues later in the project. It will also help to gain and secure trust for later in the
implementation.
The following should be considered when researching vendors and gathering information:
•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
•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
Some ERP vendor systems (e.g., SAP) are designed for and can scale to a large number of
users, whereas other systems (e.g., Great Plains) are geared for a small number of users. Many
ERP vendors have similarly geared their application for a specific industry. For example,
PeopleSoft has historically focused on government and educational organizations, whereas SAP
has focused on the manufacturing industry. Oracle PeopleSoft is also known for human resource
(HR) applications, whereas SAP is well known for production and supply chain management
(SCM) applications. In recent years these large vendors have tried to diversify their systems by
expanding their application modules through acquisition of other software companies. Oracle
now owns the Peoplesoft ERP along with its own e-Business Suite. Nonetheless, they still focus
on certain industries and are known for applications in certain functional areas of business. It is
therefore important for businesses evaluating ERPs to pay close attention to these criteria before
selecting the software.
The IT infrastructure criterion is important because a company not having the resources
to invest in new infrastructure may want to acquire an ERP application that will work on an
existing platform. Some ERP vendors have structured their applications to work on specific
platforms with specific database and third-party software. In that case, having the vendor install
a “sandbox” application for demonstration purposes on the company’s existing infrastructure can
be very helpful. Finally, the resource question is the most important issue that has to be resolved
before moving to the next phase of ERP implementation. That is, what organization resources
will be needed to implement and support the product? Senior management must be involved in
making this decision. If they are not committed to the project for the long run, both in terms of
resources and time commitment, the implementation is doomed for disaster. The majority of
ERP vendor relationships with organizations are long term. Vendors are constantly upgrading or
releasing new applications requiring a business to remain close to what is happening with the
system. This requires long-term resource commitments from the organization.