$60M Manufacturer Finds Perfect Match for their Enterprise-wide ERP software through the Hudson Multi-Step Process
When one of the nation’s largest manufacturers of motion control products realized its decade-old ERP system was no longer fulfilling the needs of the business, they did what any company seeking to maintain a competitive edge would do: they initiated an enterprise-wide software selection process. Yet after receiving proposals from three competing ERP vendors, the company found it difficult to make an informed decision. The vendors’ proposed budgets were miles apart, and while each of the proposals offered an array of solutions, none seemed to have the right mix of desired deliverables to answer the company’s needs. After spinning their wheels for several weeks, the company sought a third-party, independent opinion to help evaluate each of the proposals. They turned to Hudson for help with this evaluation.
Upon beginning the evaluation, various red flags (e.g., the initial proposals were nearly 100% apart in price) made it immediately apparent to the Hudson team that a needs assessment had not been performed and the project was not likely to have been scoped properly. Therefore, Hudson analyzed each proposal carefully, outlining the pros and cons and their long-term implications. The Hudson team determined, and the client agreed, that none of the initial proposals would prove valuable in achieving the company’s long-term goals. As a result, Hudson was selected from a number of potential evaluation providers to propose a new solution that included an in-depth needs assessment, the development of critical success factors (CSFs), and identification and review of several new potential ERP vendors that met the company’s criteria.
Vendor RFP Process
Hudson consultants immediately set to work interviewing the client’s senior management team and over a dozen department heads drawn from different geographic and functional boundaries. The team documented current and future business needs, developed detailed system specifications and established a governance process for determining requirements that reflected a coherent view of the organization’s priorities. Using this revised set of criteria, Hudson initiated a formal Request for Proposal to identify a short list of more compatible ERP providers. The participating vendors were chosen based upon their system’s capabilities, cost, positive recommendations and demonstrated experience within the client’s vertical market.
The new process included a total of five vendors, and it ensured that all potential vendors received the same set of requirements for an “apples to apples” comparison. As a result, the gap between the bidders narrowed substantially. In fact, when the RFP responses came back, the two lowest bidders had increased their price by almost 70%, better reflecting the true scope of the project, and they were no longer the lowest bidders.
ERP Software Selection Process
Throughout the 12-step selection process, Hudson’s team maintained regular contact with vendor representatives. This allowed the team to gain a complete understanding of their proposals and project plans while challenging, refining, and negotiating on behalf of the client before the final two were chosen for demos. Using a matrix-based scoring system, the Hudson team analyzed each entry for multiple factors including price/value, vendor support, ease of implementation, general fit, and economic viability. After two rounds of refinement, only one of the original three vendors remained in the mix.
The final two vendors were invited to perform a live demonstration to validate not only their proposed system’s functionality, but also the user-friendliness of each platform. Throughout the process, Hudson provided guidance to the client and helped to expose any gaps between their business requirements and the software’s applications. As a final step, Hudson prepared a summary report with a cost-benefit analysis and recommended course of action to select a new software provider.
ERP Project Results
Based on Hudson’s research and discovery of key business requirements, the client was able to choose an ERP software provider with confidence that their product aligned perfectly with their unique business processes and budget. Final negotiations resulted in further savings of nearly 20% from the original quote from the selected vendor – one of the two new vendors identified to bid by Hudson. To date, the Hudson team has visited each of our client’s six U.S.-based sites, as well as two overseas locations, to manage expectations and lay the groundwork for successful change management.
As a result of these efforts, the client has expressed extreme satisfaction with their new ERP provider and has asked Hudson to continue providing consultative service and assistance throughout the training and implementation phase.
The Hudson Difference
- Final bid negotiations resulted in nearly 20% savings from the original bid, and 5-6 times the value of the Hudson engagement
- Leveraged knowledge and expertise from multiple software selection and implementation projects results in greater knowledge and faster learning curve for client
- Analysis of project for current and future business needs and key specifications leads to more accurate scoping
- Vendors identified and invited to bid based on clear needs assessment and fit requirements
- Single RFP and standardized scoring for vendor proposals allowed “apples to apples” comparison across providers
- Multi-stage process and ongoing dialogue with client and vendors assured vendor proposals accurately reflected client requirements and true costs
- Implementation and training follow-through ensured successful adoption of new system