ERP System Selection at Sicomed
This is an example of Business Process Redesign coupled with the introduction of an ERP system. A good ERP solution comes with recommendations for processes, best practices and know-how and can be used as a source of inspiration for rethinking a company’s operations. However it is better to know what you want before acquiring such a system.
In the year 2000 Sicomed was the most important pharmaceutical manufacturer in Romania and one of the key players on the Romanian drugs market. The privatization of the company was completed and very soon after that the new management of the company recognized the need for a better information system that should have supported the company’s strategic plans for modernization and improvement of the overall performance.
In September a project team was put in place to come up with a recommendation for an Enterprise Resource Planning (ERP) system to cover the most important information needs and business requirements and to be able to support the company’s processes in an adequate way. One consultant from ROSS Consultants joined this team and soon after that he was assigned the role of co-ordinating the efforts of the team and managing all aspects of the project.
The objective of the project was to identify and propose the most appropriate ERP solution to cover the company’s strategic and operational information requirements and to find the best vendor to implement that particular solution.
The first phase of the project consisted in gathering information about the current and future data processing needs of the main functions of the company: Sales & Distribution, Marketing, Procurement, Production, Finance. The first result of this phase was a list of 327 main requirements that was checked against the management’s expectations regarding the future approach of the business. The second result was the modeling of the company’s processes in the light of management’s new vision of conducting the business.
The second phase of the project consisted in communicating the requirements to a number of possible vendors, gathering their responses on how well their solutions covered the companny’s needs and comparing the functionality of their ERP solutions with the initial list of requirements. The result of this phase was a short list of solutions and companies that were retained for further investigation.
The third phase was the investigation of the short listed solutions using product presentations, detailed discussions and case studies. The question here was how well the solutions were covering the information processing needs and how well they could support the company’s processes. During this phase there was also an investigation regarding the capacity of the vendors to sustain the implementation of their product.
The fourth phase represented the development of a final recommendation to the company’s management taking into consideration the functionality of the ERP systems, the delivery capabilities of the vendors, the costs of solutions, the internal risks of the company in relation to the implementation of each solution. During this phase, additional talks and negotiations were conducted with vendors in order to better understand and clarify their proposals.
The most important aspects of this project were:
- the selection of the ERP solutions followed a thorough investigation, both internally and externally. This helped the company to clarify its needs and expectations from such a product and understand what was on offering on the market;
- the decision to buy one product or another was based on adequate knowledge about the most suitable products available on the market. The management of the company had the relevant information regarding strengths and weaknesses of each solution in relation to the company’s needs;
- the results of the work that was done in this project were used in the implementation phase of the chosen ERP system. During the project period the company was capable to initiate the necessary changes and to prepare itself for the future implementation of the solution;
- most importantly, the implementation of the chosen ERP system was a success proving once more the correct approach to the selection project.