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Don't Put the Cart before the Horse

In 1995 and again in 2009, the Standish Group published a study that reported similar results in that only 16.2% of business management software (ERP) projects for mid-sized companies completed on time and on budget and large companies had only 9% of projects completed on time and on budget.  The underlying causes of failure are varied and all too frequently, companies do not understand why the project failed. 

Highly skilled and experienced consultants are sometimes a good choice to help provide a roadmap for success.  Sometimes an unbiased analysis provides considerations to the big picture. Understanding the big picture is the key to successful selection and implementation.

Putting the Cart before the Horse

Traditionally, an ERP Implementation strategy that ERP Vendors use is a nine-step process that looks much like this:

  1. Watch software vendors demo your hot spots with their bells and whistles
  2. Buy the software.
  3. Planning – Obtain the hardware and plan the network
  4. Design Analysis – Analyze the business processes and design solutions for areas of non-fit
  5. Setup and Build – Create foundation data and perform data migration
  6. Department proficiency development
  7. Business Simulation – Conduct the conference room pilot
  8. Rollout – Go Live!
  9. Implementation Review – Review activities after users are software proficient
As good as this strategy may look on the surface, it is doomed for failure because seven stages occur after the client purchased the software.  Buying software before you analyze the business fit is putting the proverbial cart before the horse.  A better strategy for ERP Implementation takes into account the "Big Picture"; it considers critical steps that will lower the risk of picking the wrong software for your business.

Understanding the Big Picture and Plan Accordingly

A proven selection and implementation methodology looks like this:

  1. Educate company employees to understand how ERP Systems functions in businesses.  Consider employing a qualified consultant to educate your employees about what the ERP System will do for and to the organization (click here to review our ERP Education).  This allows everyone to learn and use a common terminology and puts everyone’s understanding of the business on equal terms.
  2. Define a team comprised of a top management sponsor (usually the C-Level Operations VP) and company process owners.  Charge the management sponsor with overall project success.  Their duties are to ensure that the project stays on track and resolves business conflicts that occur when departmental goals come into conflict.
  3. Streamline and document each activity in the company in excruciating detail before searching for software.  Software packages are available to assist with this activity.  Some are well worth the additional expense.
  4. Make the process owners responsible for documenting activity within their sphere of responsibility.  Test the documented processes for correctness.
  5. Prior to beginning the software search, create a template of important processes.  Provide software vendors with those templates and explain before viewing any software.
  6. Create a scorecard to judge vendor performance.
  7. Have the ERP vendor’s sales team demo their product to the team of process owners using the process owner’s procedures (click here to review an article about ‘leveling the playing field’).  Allow deviations to the process activities but, make sure the vendor explains the differences in processes and why those processes are better than yours.
  8. Find the areas of non-fit during this process.  At this time, ask the vendor to use members of their implementation team to assist in this activity.  Get to know the vendor’s implementation team and the chemistry with your team.
  9. Get a cost to change, including:
    1. Process owners’ cost to change the process to match the software
    2. Software supplier’s cost to change and maintain that change through multiple product releases for the customer’s process
    3. Change the software when your processes prove to be a marketplace advantage.
    4. Visit customer sites that are using current versions of the software without the vendor in tow.  Learn about implementation and support issues outside of earshot of the vendor.
    5. Buy the software those best fits the business using the data acquired in the above activities.

 

Do Your Homework and Avoid Shortcuts

The phrase “caveat emptor” is the order of the day; software vendors do not guarantee their product.  The activity of ERP implementation is fraught with danger and its path littered with corpses of failures.  Historically, those failures occur when organizations do not do their homework and instead look for shortcuts.  To reduce the chances for failure, it is important to have an understanding of the Big Picture so you place the horse in front of the cart.  Consider employing a consultant with the expertise to see the Big Picture; make sure that the individual communicates that big picture to your organization.  It is your responsibility to guarantee that what you buy is the best fit for your organization.  To access whether your organization is ready to selecting and implement an ERP System, review our Selection Readiness Assessment.

 
If your organization is seeking assistance to select, implement, or gain better results with an existing ERP System, Manufacturing Practices, Inc. can help. Call us at 770-772-6894, Skype: michael.a..roman or email: operations@manufacturingpractices.com or Ask the Expert.

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