A great little article courtesy of our friends at Panorama Consulting reminds of what ERP can, and just as importantly, cannot do for a company. In a December article found here, author Eric Kimberling points out “5 common – yet inaccurate – myths that you should be aware of before investing too much in your new ERP initiative.” We reprise and note them here:
- ERP implementations can be quick and inexpensive. While ERP salespeople may wish it were true – and often tell prospective customers as much – the truth is, they’re not. Everybody, customer and seller alike, is looking for the Easy button. Stop looking. There isn’t one. Kimberling says it best when he notes: “Be leery of terms like ‘implementation accelerators,’ ‘out of the box functionality,’ and ‘pre-configured solutions.’ Things like these may have slight benefits, but they are typically not material enough to make a significant difference. The business transformation portion of your implementation will always be the most difficult aspect of your project, and no implementation tool can automate those activities.”
- No one is implementing on-premise ERP systems anymore. Industry analysts (often paid by SaaS (or “cloud”) vendors, as Kimberling notes) have been calling for the demise of on-premise systems for years. Don’t believe it. According to our experience, as well as Kimberling’s and others’ research, while SaaS or cloud solutions are gaining traction, a majority of new ERP implementations “still leverage the on-premise model.”
- Your ERP system will drive your business process improvements. Too many companies believe their new ERP system will “tell them” how to run their business. That smacks too much of the Easy button noted earlier. In fact, today’s systems are too robust, flexible and powerful to define your business processes for you. Your workflows still need to be defined, your processes fit to the software and your software still needs to be configured. You still – indeed, now more than ever – need to think critically about all your processes and workflows. That’s the Business Process Analysis part that is so crucial at the outset of any ERP implementation.
- Organizational change management isn’t always necessary. Organizational change management is often side-stepped by management under the guise of comments like “we’re not that complicated” or “our employees are excited about the changes coming.” Yet generally, the lack of OCM turns out to be the key driving force behind failed ERP implementations. Understanding one another’s roles, implementing effective communications, defining each area’s process flows and responsibilities, and ending it all with good, solid, effective training is an absolutely necessary component of any ERP implementation.
- We can implement without any customization. Panorama’s 2015 ERP Report revealed that 91% of organizations end up doing some form of software customization during implementation. Of the remaining 9%, most are very small “upstart organizations without much complexity or sophisticated business processes.” So unless you’re very small or new, plan on customizing at least part of your software to ensure you gain maximum return while ensuring the software matches your processes and key business requirements.
As Kimberling concludes… “There are plenty of things you’ll need to know before embarking on your ERP implementation, but these five myths are the most likely to derail your efforts. Sort through the fiction and stick to the facts to make sure your project is a success.”
We couldn’t have said it better.