Eli Goldratt’s Theory of Constraints teaches us that three key questions must be answered before embarking on any transformational changes – like say your typical ERP project. Those questions have a sequence:
- Why do we need the change?
- What are we going to change?
- How do we cause this change?
Many millions of dollars have been wasted on “transformational” ERP projects without managements having spent sufficient time identifying the answer to Why?
Why? may well be the toughest question of them all. After all, once you’ve decided the “why,” the “what” becomes pretty easy to link to. In the case of ERP, if the “why” is because, say… we need better information to make better decisions, and our systems don’t hold (or share well) that information… well then, changing the ERP system (the “what”) is pretty easy to conclude. From there, it’s an easy mental leap (though not at all easy in practice) to determine the steps required (analyze, build, test, modify, train, go-live, support, etc.).
But it all starts with the Why. It seems simple enough.
Sakichi Toyoda of Toyota popularized the 5 Whys technique to explore the underlying cause and effect relationships associated with a problem. The premise was that asking the question ‘Why?’ roughly five times was sufficient to get to the core of a problem. It’s a guideline, but it forces an iterative thinking process that can be valuable to any analysis.
Why do we need to change our system? Because our system is old.
Why is that an issue? Because we aren’t getting the right data to the right people at the right time.
Why aren’t we…? Because we have scant information that’s scattered across too many ‘silos’.
Why is that an issue? Because we don’t know which of our customers/products are profitable, and which are not.
[Now we’re getting somewhere…]
Why is this an issue now? It’s a growing issue, and we’re losing sales to competitors… and we committed to a company growth goal for next year of 15%.
Okay… now we have a real answer to Why? It’s grounded in the business. It’s “SMART” (as in Specific, Measurable, Ambitious, and Realistic with a Timeframe).
The answer to ‘Why?’ is the starting point for your transformation roadmap. Happy 2014!