This paper examines the relationship between businesses and enterprise resource planning (ERP) vendors, arguing that companies too often allow vendors to drive ERP selection decisions rather than first defining their own needs. The paper warns that because vendors understand their products but not the inner workings of their clients' businesses, over-reliance on vendor guidance can result in costly, ill-fitted systems. It recommends that companies assess their requirements independently, consult multiple vendors, and select a partner genuinely committed to understanding the business — ultimately leading to more successful ERP implementation and a stronger long-term vendor relationship.
When it comes to vendors and enterprise resource planning (ERP) systems, many companies simply do whatever the vendor suggests. These companies often choose the first ERP vendor they speak with, or one recommended by another company. That is not always a sound business practice, because there are many ERP vendors available and some will be far better suited to a particular business than others. If a company takes the time to find the right ERP vendor, it can have a much better experience. However, entering the wrong partnership can spell disaster. ERP is such an all-encompassing type of system that it is crucial to a business's success that the right vendor and the right software be selected (Burns, n.d.).
Locating the right company and software for the job is something all businesses must consider, regardless of their size or specific needs (Donovan, 2011). Overall, vendors often exert too much influence over the ERP decisions that organizations make. This occurs because some organizations are uncertain about what kinds of software are available to them and what that software can do. Faced with that uncertainty, they simply rely on the vendor to tell them what they need (Krigsman, 2011). That might seem reasonable, since the vendor knows the product. Unfortunately, the vendor does not truly know the business. While a vendor can learn quite a bit by working closely with company representatives, that still does not provide all of the information the company itself possesses.
Because vendors do not know everything there is to know about the companies to which they sell ERP systems, there is a very real danger that the vendor could get something wrong — and that could cost the company in inefficiency and lost profits. That risk is worth considering, yet too many companies do not know how to work properly with vendors. Companies planning to adopt ERP systems must focus on what they need before pursuing a system to provide it (Wailgum, 2010). In other words, a company should take the time to assess its own needs and understand what would satisfy them, rather than allowing the vendor to determine what the company's needs actually are and how the software being sold can best address them.
It is not impossible for a company to end up with ERP systems it does not need simply because it thought it wanted something and then changed its mind. Conversely, companies may also end up with unnecessary ERP components because they were persuaded by overzealous vendors. The most important thing vendors know about ERP implementation is what those systems are capable of doing. The most important thing vendors do not know is what the company actually needs and exactly how it will use the system. The best vendors are those who take the time to learn what the company genuinely needs and how it will use the ERP system (Krigsman, 2011). By doing so — and then selling a system that will actually work for that company — both the vendor and the client have a higher chance of meeting each other's needs and building a successful partnership.
"Consulting multiple vendors helps avoid poor choices"
"Best vendors learn the business before recommending systems"
Allowing a vendor to have too much influence over an ERP system is like allowing that vendor to have control of one's company (Donovan, 2011). That is something that should be avoided, and something that can be avoided with careful planning — a step that is too often ignored by businesses in their haste to purchase and implement an ERP system. As much as adopting an ERP system can improve productivity and efficiency, only the right ERP system will actually deliver those results. Vendors that are genuinely interested in working closely with companies, understanding their needs, and tailoring their ERP solutions accordingly are the best choices in an ever-expanding field of providers offering enterprise resource planning solutions to businesses of all types around the world.
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