Two common ERP implementation mistakes and suggestions on how to address them.
For all the years ERP systems have been around, there are still many implementations that do not go very well. At a minimum, most carry more drama than is necessary. At worst, they can shut down a formerly viable business. While there are thousands of items that can de-rail an implementation, the root cause can usually be traced back to one of these two:
1) A flawed selection process. The executive team (many of which rarely or never log into the ERP system) sits through several software presentations. They don’t ask end users what they think or need and don’t invite them to software presentations. This is usually more common in smaller companies. Regardless of company size, how successful do you think an implementation built on this foundation is going to be?
I’ve seen companies “go live” only to discover critical business processes are not supported by the newly implemented ERP system. Had the end users been included in “as is”/”to be” mapping sessions, these gaps would have been obvious. Take a look at what you have today. Can the new ERP system support that? Is this function critical to your business? Can you live without that in lieu of some greater functionality being gained in other areas?
The best way to answer these questions is to have key users/groups identify all the desired features/functions and break them into two categories – must have/like to have. Compile a rubric based on everyone’s input. You can weigh the items based on their must/like to have designations. Make a formal presentation a requirement of all potential ERP suitors. During this presentation, your team of executives and end users can use the rubric to score the software’s ability to meet your needs. There is nowhere to hide in a live demo. The software either performs or it doesn’t. Beyond that, your team gets a glimpse at the intangibles – response time, intuitiveness, user friendliness, etc.
Poor selection is tough (if not impossible) to correct. I think the majority of us would rather skip the unenviable task of fitting a square peg in a round hole. ERP implementations are stressful even under the best of conditions. Don’t add to the stress or worse yet sabotage the implementation by making a poor selection. Do your due diligence.
2) Not allocating an appropriate amount of resources.
Okay, so you put the time into making a good ERP selection. What’s next? Don’t undermine the project by cutting corners on implementation resources. Make sure you have the people in place to make the project a success. Hire an external project manager if needed. If you need to move employees onto the project team and backfill their positions with temporaries – do it!
I’ve seen too many implementations where companies sit back and let the ERP vendor do all the heavy lifting. They paid a lot of money for the software and it’s up to the vendor to make it work, right? Wrong. This where executive sponsorship and end user buy in are key. The company needs to own the success (or failure) of this project – period. The software company moves on, but you still have a business to run. You better have a team that understands the ERP system or you are in for a long and bumpy ride.
I saw an implementation where one entity with one tax ID ended up as five separate entities in the ERP system! How did this happen? The software company finally got tired of asking for input (and not getting any) and implemented their interpretation of what they thought the client wanted. The organization ground to a halt. Common, every day business processes became cumbersome and labor intensive. This leads to my next point – skimping on training.
Would you let someone drive a car without showing them how? Would you expect somebody to play the piano with no lessons? Yet everyday a company goes live on a new ERP system where end users received little or no training. I don’t know about you, but I don’t want my customers/clients suffering through a half hour sale that should only take two minutes because the representative is unfamiliar with the new system! Do you think that customer/client will be eager to return?
Once you’ve decided your current ERP system is no longer the answer, start planning to ensure the selection and implementation of a new ERP system succeeds. An ERP upgrade/implementation is one of the bigger investments a company makes. The success or failure of the initiative can be felt for years. Do what you can to maximize your chances of success.