.... Innovative IT Consulting helps small and mid-size companies use technology to facilitate growth and increase profitability. We are specialists in the Process Industries.
June, 2007


In the May issue of Innovative Thinking, we talked about how to engage with vendors to build successful relationships and ultimately successful projects. This month, we continue our ERP Done Right series - with a discussion of DUE DILIGENCE. Put your ERP Done Right articles together and you'll have a cookbook for great ERP results. Don't miss a single issue!

Giving Due Diligence its DUE for a successful ERP implementation. By Paul Sita, Principal, Innovative IT Consulting, LLC. Paul can be reached at 631-549-1685 or psita@innovativeitc.com.

Isn’t it time to get started already? One part of the ERP selection process that is not given sufficient attention is the due diligence process.

By the time a vendor and package are selected, most organizations and their selection teams are exhausted! They’ve been through countless sessions, demos, scoring, heated debates, compromise and ultimately consensus. This is an understandable position. But if you just rush into getting started you could be making some serious mistakes.

"We already checked references. Aren't we done?" Due diligence is not just reference checking. Due diligence is a whole range of activities designed to clarify, define and address gaps between your understanding and expectations of the ERP vendor and/or implementation partner and your ultimate project. Now is not the time to take short-cuts. Certainly some measure of due diligence is exercised during the selection process, and may even be used to compare different vendors. For example, getting a feel for the vendor’s focus on your particular vertical niche is an important consideration. But once the selection is made it’s time to clean up all the loose ends.

THE BEST WAY TO AVOID HAVING DUE DILIGENCE SLOW DOWN YOUR PROJECT IS TO MAKE A LIST OF DUE DILIGENCE ISSUES DURING THE SELECTION PROCESS (AS OPPOSED TO WAITING FOR THE END OF THE PROCESS).

What are the key areas of due diligence?

Reference checks and site visits These are NOT the same thing. You may make several reference calls to address specific issues. Site visits will help you get a fuller and different picture. Typically the companies you make actual site visits to are not the same companies you call for references. (Future topic - how to conduct a reference check)

Hardware Sizing and deployment options.

Performance benchmarks based on your data and transaction volumes.

Implementation scoping with the vendor or implementation partner.

Contract review and negotiation. This typically starts with standard contracts and goes on from there. (Future topic all by itself)

Corporate/Executive visits. Your top management may need to get more comfortable with the vendor. They may need to “look them in the eye” and see if they pass muster. The vendor may send their executives in or you may go visit them at their offices. Don’t underestimate the importance of this step. I have seen many a project killed by the CEO at the end – based on nothing more than his gut instinct or reaction to another senior executive.

Credit/business performance review. With consolidation going on in the ERP space, many executives are concerned about the viability of software vendors and/or their solutions. This goes beyond just being comfortable that the vendor has financial staying power to sustaining future investment in the development and support of the product.

Functional gaps. Filling in functional gaps revealed during the various demonstrations. Invariably during the demos certain things get glossed over, or someone says “they will look into that”. Now is the time to cover those bases.

When do we actually get started? If you wait until the end to identify, schedule and address these issues, your project could get stuck idling on the tracks. So, follow our #1 piece of advice, mentioned above and repeated here:

    THE BEST WAY TO AVOID HAVING DUE DILIGENCE SLOW DOWN YOUR PROJECT IS TO MAKE A LIST OF DUE DILIGENCE ISSUES DURING THE SELECTION PROCESS (AS OPPOSED TO WAITING FOR THE END OF THE PROCESS).

Transition to implementation. Due diligence is the transition from working with your vendor as a vendor and working with them as a partner. Handle these issues in an organized and businesslike way and establish the proper framework for proceeding with the project.

    Now it’s time to get started!!!


Tip of the Month

Executive Buy-In is Not Good Enough.
By John Pellegrino,Principal, Innovative IT Consulting, LLC. John can be reached at 631-549-1685 or jpellegrino@innovativeitc.com.

Whenever we speak to a potential client about an upcoming ERP project and bring up the subject of upper management’s thoughts on it we hear the same response – “I know I have to get the executives to buy-in or this won’t really happen”. That sounds great and while true, it’s only part of the story. Getting buy-in implies that the only thing executives need to do is approve the project, announce that it is important to the company and keep an “eye” on what is going on with it. Simply put, that’s not good enough.

Participation, not just support.

Partners in the project.They must become part of the project through active participation in all phases. In our main article on due diligence we reference one place where they participate by meeting with the executives of the selected vendor. There are other places in the project such as meeting with the person(s) determining the business requirements, setting the project objectives and measurements for success, attending an executive session from all the vendors on your short list, getting high-level status in a meeting at least bi-monthly, and asking all the tough questions about how the team is working out (or not).

Don't think this is a way for them to oversee every detail you are doing as if they don’t trust you. If they are getting involved in every little detail then something is wrong and it needs to be fixed. But, getting involved where they should be is a key factor in helping you with one of the toughest parts of many ERP projects – selling it to the rest of the organization. Insist that they get involved in the beginning and stay involved throughout.


What's new?

Innovative signs strategic partnering and services agreement with Achieve IT. Achieve IT is a fast growing reseller and business consulting firm focusing on the SAP Business One solution, which is increasingly being looked at by growing enterprises. Innovative will be collaborating with Achieve IT to help Achieve IT clients realize value and benefits sooner through top notch project management and other project related activities. Visit Achieve IT at their web site: www.achieveits.com

Word Scramble time.
“Various alternatives for implementing and accessing an ERP system." (2 words)
_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

I P S M T E P Y O O D N O E T L N
Answer to last month's word scramble.

“Consideration and strategies that help you minimize the chance of project failure." (2 words) (RISK MITIGATION)


A Look Ahead To Next Month

In July we'll continue ERP Done Right when we discuss change management, a topic that strikes fear into every executive's heart!

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Innovative IT Consulting, LLC
(631) 549-1685