Panorama Consulting surveyed businesses that had implemented ERP systems (large companies for the most part, but we note that the lessons for the small to midsize business are largely the same). In our previous six posts we detailed many of their findings. Today we’ll wrap up this series of posts with some of their final conclusions.
First, it was heartening to note that about 80% of surveyed companies reported satisfactory results with their systems. Now, like all surveys, we take this with just a grain of salt. For any survey reporting a high level of success, there are probably three more that will speak to high failure rates. We recommend you take the 80% satisfaction rate with a large grain of salt.
Second, we can safely extrapolate that: those who planned well, and laid out the business case, largely succeeded. They knew where they were trying to go. Those who didn’t, failed.
Third, satisfaction levels drop quickly once the nitty-gritty process of implementation is begun. Factors including under-staffing, poor understanding of the processes involved and lack of executive buy-in are major factors here. Often, companies were forced to change their business processes (to fit the software), rather than the other way around (which is usually, in our experience, far more successful).
Fourth, two-thirds of companies had difficulty in addressing process and organizational changes. These changes must be managed slowly, with insight, sensitivity and creativity – a point often missed my management.
One key tenet of Panorama (and firmly held by our firm as well we might add) is that software must be changed to fit the company in those areas where such differentiation provides strategic or competitive advantage. In fact, such differentiation, we’ve found, is often the key driver in a company’s overall margins. It cannot be ignored. The logical solution is to make sure the software fits into the business – and not the other way around.
Business processes should be mapped – at the outset of the project – so as to move from “as is” to “should be.” We often call this value stream mapping, or some derivative, and it’s important that such thinking be an early stage in any ERP project. It’s important for companies working with consultants to determine which processes can and should stay – and which should (and can) go… that’s your roadmap!
And then, finally, work with a partner (a key word here) you can trust. After all, you’re likely to be working with them closely, for a long time.
** END NOTE: We at PSSI wrote our own white paper called “Software That Matters” in which we detail (in what were originally 11 blog posts) most of what a small to midsize business owner needs to know about selecting an appropriate ERP system, including objectives, costs and key purchase considerations. You can get the white paper from us at our website here, or see the original posts here.