Vendor Selection: An Increasingly Complex Task for Supply Professionals - Essay Sample

Introduction

Vendor selection refers to a decision making process that entails tradeoffs among several criteria that are sometime conflicting, in an effort to choose the most suitable and appropriate supplier of a given product for the continuation of an organization's performance (Wei & Wang, 2004). Note that vendor selection is arguably one of the most imperative responsibilities of supply professionals. Vendor selection is becoming a continuously complicated task because supplier professionals need to solve two challenges. First, is the need to select the most suitable set of criteria that are in line with business priorities and strategic plans for evaluating potential vendors, and two, the problem of using the established criteria to objectively evaluate potential vendor to get the most suitable one. Owing to the fact that vendor selection is a typically unstructured process of evaluation that entails multiple criteria, it is prudent that the basis of evaluation must cover tangible and intangible, operational and strategic, quantitative and qualitative factors (Radut & Codreanu, 2012). Nonetheless, because individual companies have customized strategies and priorities, it is unreasonable to establish a standard set of evaluation criteria that meets the needs of every buying company.

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It is also imperative to understand that over the years the landscape of ERP software vendors has changed considerably. Lately, the number of vendors who take care of needs of small, medium, or large sized organizations is growing. Amidst this backdrop, developing the right criteria that can enable a company select the most appropriate vendor is becoming complex. This notwithstanding, Radut & Codreanu (2012) insist that the selection process needs to take into consideration the organization needs. The researchers proposed a qualitative model that consisted of functionality, reliability, usability, efficiency, portability, and maintainability. They further explained that the specific factors in the vender selection process should include technology, functionality, flexibility, required expertise, costs, application scalability, ease of use, and ease of implementation. Similarly, Garg & Khurana (2013) proposed that the perceptions of the end user needs to be one of the most critical considerations whole selecting an ERP package for a company. On the other hand, Ratkevicious et al. (2012) proposed eleven criteria that included system reliability, vendor reputation, technology advance, ease of integration with other organization systems, ability to upgrade, scalability, ease of use, flexibility to customization, modularity, general flexibility, and the total cost of implementing the ERP system. In an earlier publication, Hurbean (2009) recommended that a vendor selection process should consider the ability of the organization to ransform business processes in order to meet customer expectations. Even though Wei & Wang (2004) developed a standard methodology that featured both subjective and objective criteria in ERP vendor selection, it is imperative to understand that the technology world is very dynamic and organization needs are unique and keep on changing.

The Impact and Importance of Vendor Selection on ERP System Implementation

When considering successful implementation of an ERP system, the software in its exclusivity is not the only contributing factor. Successful implementation need to take into account all the processes that are involved from the project initiation to project conclusion phases. Vendor selection is one of the imperative ERP implementation success factor (Hurbean, 2009). Selecting a wrong vendor translates to either failure of the whole project or failure to satisfactorily meet all the needs of the end users (Wei & Wang, 2004). An ERP implementation process can failure because of challenges with integrating the new system with existing ones, going over monetary budget, interruption to important business processes, improper planning of the project, and lack of proper training to the end-users. Note that a project is likely to observe budgetary limitations if the right vendor is chosen. Furthermore, the right vendor is likely to provide the most appropriate ERP system that will integrate easily with the existing systems (Hurbean, 2009). Furthermore, having the right vendor in place guarantees satisfactory after sales services such as maintenance and routine update on the system. Lastly, a good vendor understands that proper end-user training is a critical success factor to the implementation of the new system. Therefore, having the right vendor translates to having proper training to the staff that is expected to interact with the new system.

It is indeed true that choosing the right ERP system is critical because it ensures that the organization get all the needed features and functions that will ultimately optimize operational processes. Nonetheless, note that all the challenges notes above lead back to the ERP vendor (Wei & Wang, 2004). It implies that the success of implementing a new ERO system is not restricted to the system itself alone. It explains why selecting the right vendor is an important success factor. A good vendor is definitely needs to do more than merely delivering the right software (Hurbean, 2009). A vendor needs to be a trusted advisor who must be involved in the entire process of Implementation until successful completion and even beyond. As noted earlier, a good vendor should maintain and update the system regularly. Therefore, it is crucial to understand the role of an ERP vendor to be in position to make the right decision.

References

Garg, P. & Khurana, R. (2013). ERP prodiuct selection criteria for Indian small and medium enterprises: an empirical study. Internationa; process management journal, 7(3), 285-296.

Hurbean, L. (2009). Factors influencing ERP projects success in the vendor selection process. Accesses 26 May 2019 from htto://mpra.unimuenchen.de/14430/MPRA

Radut, C. & Codreanu, D.E. (2012). Selection of an organization specific ERP system. Ideas of REPEC Journal, 18(2), 384-389.

Ratkevicious, D., Ratkevicious, D. & Skyrius, R. (2012). ERP selection criteria: theoretical and practical views. Ekonomika, 91(2), 97-116.

Wei, C.C. & Wang, J. J. (2004). A comprehensive framework of selecting an ERP system. International Journal of Marketing Science, 25 (2), 139-153