Enterprise resource planning (ERP) is a process management software that allows a business entity to use a system of integrated applications to manage, streamline and automate many back-office functions of the organization.
But any ERP system is not an all cure silver bullet, there will be certain periods of road blocks or hiccups which may escalate or have a domino effect, thus all kinds of implementation delays and cost-overruns and the consequent blame game and potential dispute. Every ERP system will have some critical concerns before the system goes into maintenance mode and the business entity starts getting value out of their investment. So, before you sign the agreement with your vendor, you need to scrutinize the following aspects of the system.
1) Positive and Negative effects of your current system.
2) Advantage of implementing a new system and the relevant cost
3) Is your team ready for a change?
4) Jot down your actual function practiced and not the ideal function.
1) What is the most workable ERP used by your competitors?
2) Will it provide the return on investment and with effect from which period?
3) What is the percentage of change and is your team ready?
4) Training period and the duration of the training
5) Is the ERP user-friendly?
6) The time frame of implementation and how much it will hamper your current business workflow?
7) What will be the AMC for the ERP? What is included? What else will you need?
8) When will the AMC be applicable?
9) What is the support service from Go live to AMC period?
10) When the system must be upgraded and the cost involved, will it make the existing system redundant? If affirmative, at that point in time, have you achieved your ROI?
11) What is the support services provided and when i.e. during and/or after office hours?
12) What is the response time?
13) Type of support offered – in person or remote help.
The legal aspect of the agreement with your vendor:
1) Jurisdiction of the dispute – UAE
2) Applicable law – UAE
3) The method of resolving dispute – preferable mediation and litigation.
As a vendor or customer, the payment and records play a crucial role in the event of a dispute. So, RECORD, RECORD and RECORD.
For the Customer: Each event of a delay, failure, the response time, the time taken to fix it and the effect of the failure on other workflows must be recorded and duly informed.
For the Vendor: Date of intimation of the failure, response time, time taken to fix it and revisit and functionality of the same issue must be retested and all must be recorded. During the AMC period, the schedule of services must be intimated to the customer and recorded when carried out. Your contract should clearly spell that after a prolonged period, due to changes in business and technological model, the system must be maintained and reimplemented which starts a new cycle of service and that is why an AMC is required and in the event of failure to sign the AMC, the vendor will not be liable as to the cost and consequences.
Preparing for the potential challenges of implementing an ERP system will ensure a smooth transition and the same will save cost, time and resources of the organization and the ERP system and ensure value for money.