Most ERP programmes don't fail in delivery. They fail at the point of purchase.

Around 80% of the recoveries I lead trace back to one cause: the wrong system, the wrong systems integrator (SI), or both.

What I have seen:

• A £40m programme awarded on vendor pitches in ad hoc meetings with the sponsor, with no structured selection behind it.
• A client selecting a supplier five times the cost of their incumbent, with no clear rationale for the extra spend.
• Worst of all, an organisation buying an ERP that did not meet its requirements and brought it close to insolvency. The implementation was abandoned and substantial costs were written off.

Three golden rules before you buy.

1. Run a structured procurement

ERP brings significant implementation costs and licensing costs you will carry for years. A structured procurement process, such as an RFP, for both system and supplier is non-negotiable. Without one, your implementation is almost certain to end up in recovery.

2. Know what you are buying before you buy it

Before selecting a system or supplier, you must have agreed requirements, a target architecture and a data migration strategy.

Without them, you risk buying the wrong system, and the SI cannot accurately estimate the three biggest drivers of implementation cost: configuration, integration and data migration. That uncertainty resurfaces later as change requests, budget overruns and schedule slippage.

3. Put the contract in the RFP

Issue a fixed-price contract with your RFP, with payment milestones and acceptance criteria that require the SI to follow implementation best practice. Ask every bidder to identify the terms they disagree with and propose alternative wording.

The RFP is when you hold the most leverage. Use it to transfer delivery risk to the supplier. When issues arise during implementation and the SI debates whether they could have foreseen them, the conversation becomes simple: here is the best practice you committed to in the contract. Had you followed it, this would not have happened, so it must be rectified at no cost to us. A strong contract settles it quickly, in your favour.

Having bidders review the contract during procurement also shortens contract negotiations by around two months.

I am often told time and materials beats fixed price because it handles poorly defined scope better. Poorly defined scope is the early death of an ERP implementation, and no contract structure will save you from it.