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Posts Tagged ‘ERP Implementation’

The world of ERP, like all tech initiatives, is constantly evolving.  A recent opinion piece from Panorama Consulting suggests that in this light, ERP implementations — which have a “bad reputation” for being over-budget, over-time, and low on the ROI scale – are being replaced by “digital transformations,” a broader initiative designed to position the organization for future growth, accelerate competitive advantage and produce real ROI.

Our image above portrays some of the contrasts defined in Panorama’s post, found here.

They prescribe a change management strategy based on “large-scale change,” noting that if you’re after a “truly digital transformation,” then you must consider the large-scale change: “…that means you’re changing more than your technology – you’re undergoing large-scale change and fundamentally altering structures, processes and employees’ day-to-day jobs. If new technology is merely enhancing one of these elements, then you’re likely experiencing small-scale change.”

Like many initiatives, large-scale change requires three key elements:

  • preparing for change, including risk analysis and a readiness assessment and roadmap
  • managing the change, with a focus on communications, and overcoming resistance
  • reinforcing the change, where you gather employee feedback to assess results, root causes of resistance, and celebrate successes.

Key signposts for change management failure, according to Panorama include:

  • lack of executive sponsorship
  • ignoring the “people side” of change
  • lack of dedicated resources
  • ignoring resistance to change
  • no communications plan

When you think about it, those are many of the same hallmarks of failed ERP implementation plans as well.  There’s a familiar theme here, and in the end it’s really about the scale of change you’re trying to implement.  The larger the scale, or the greater the desire for ROI, r the more intense the focus on positioning for growth… the more executive talent, time and resources, as well as communications, strategy and roadmap creation become critical to a successful result.

Sometimes, the more things change, the more they stay the same.

 

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A few tips from Panorama Consulting are worth considering before a company attempts to convert to a new business system, which we thought we’d reprise for readers today.  They’re culled from the original post here.

 

To position yourself for success they suggest…

  1. Validate the scope and timing of your project. This is the basic stuff: Make sure you’ve scoped out the right modules, the right number of users and the right types of users (for example, ‘full users’ can be costly while shop-floor users are usually purchased for considerably less).  Ask questions to see what add-ins might have been used (report writers, 3rd party aps, etc.) during the demo you saw.  Be sure you purchase the right licensing type, and know what maintenance costs will be each year for the whole implementation going forward.  Remember too, you don’t have to buy all the software upfront.  (We often tell users to buy just what they need initially, which saves short-term purchase dollars, and saves on unneeded (for now) maintenance costs.)
  2. Source your internal and external implementation project resources. While a vendor may be anxious to get started (and make a sale), be sure you have your ducks in a row; that is, be sure you have the right team in place, including business analysts, knowledgeable managers, IT, shop floor, etc.  Roles and responsibilities need to be assigned early on, and project leaders at both client and vendor teams need to be clearly delineated.
  3. Build a complete project strategy and plan. Beyond what your consultants or vendor can do for you, project implementation requires careful planning and attention to a lot of details.  Be clear about every step of your processes and workflows, or it will trip you up during implementation when you can least afford it.  With your provider, draw a map of all key workflows so that together you can determine how they’ll fit, both software-wise and process-wise, into your new system.
  4. Begin key implementation critical path activities. Delays related to people and processes will derail an ERP project far more often than technical IT or software issues.  Where will the data come from (transfer or key-in)?… Who will be trained, and when, where?… Who do you turn to with workflow questions during implementation?… Who approves changes?  Consider these sorts of critical questions before you start down the road of full-on implementation.
  5. Define your project charter. Have you set out clear project and structure ‘governance?’  A project charter that includes plans, roles, responsible managers and stakeholders ensures that when the inevitable questions do arise, a clear chart of responsibility will make answering those questions clearer and better defined.  And be honest: companies only go through these kinds of projects every ten years or so – so don’t expect to be experts.  By all means, work with your provider to help answer some of these questions and to provide templates or examples from their prior implementation experiences.  Your provider should be able to provide a lot more than just selection expertise.  They should also understand about business, project strategy and the dos and don’ts of successful implementations.  So don’t be afraid to ask them.

 

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We occasionally like to share tips from others like the folks at Panorama Consulting that we feel support our own best practices advice when it comes to implementing complex business software systems, like the “5 Tips” they recently shared here.

 

Panorama’s “New Year” tips included these…

  1. Educate yourself on ERP software best practices. As they wisely note: “The most dangerous implementations are led by those that aren’t well educated on the risks, challenges, and best practices associated with an ERP implementation.”  While Panorama uses this one to promote its webinars (and we might do the same by searching on “ERP implementation” at our own blog), the fact is, there is a lot of information out there on best practices.  But just as importantly, many modern software options today embed those best practices within their workflows.  The point is, work with your ERP consultant to determine where your current workflows can be improved and map those efforts to your new software selection choices.
  2. Control the tempo of your initiatives. Having a solid plan in place is more important than the understandable urge just to “get something done,” notes the post’s author.  You need the right resources in place, a realistic timeline, a clearly defined project lead, as well as project controls and benchmarks.  Believe it or not, slow and steady, even if it takes longer, will actually save you money in the long run.
  3. Invest in the people side of your digital strategy. The number one cause of software project failure?  Not technology.  It’s people.  The right people in the right place, with an understanding of how organizational change management is an integral part of the ERP solution.  Training… communications… strategic planning… they are all critical, and they all start with people.
  4. Take industry hype with a grain of salt. There’s a lot of marketing, advertising, shilling and hype out there.  Choose wisely.  Everyone has a bias.  ERP solutions are not a silver bullet, and contrary to what many will tell you, they are not quickly implemented – at least not in any truly meaningful, business-transforming sense.  And if you’re not out to further the cause of your business’ growth and transformation, then why proceed in the first place?  Don’t believe the hype, do your own homework, and most of all, find someone you can trust.  It will be a long relationship.
  5. Don’t be afraid to leverage outside ERP consultants. Here, outfits like Panorama hype their “independence” (they don’t sell solutions), and that makes sense.  But a great many providers (yes, like us) offer more than one solution, and it’s in our business’ best interests to be objective and truthful.  That’s even true of those who sell only a single solution, though their options may be more limited.  Your initial analysis can be done either with, or without, bias.  Both have advantages.  Talk to your consultants and trust your gut.  Find the solution approach and implementation methodology that you believe in your heart will work best for you.

 

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Recently another ERP blogger we frequently reference, Eric Kimberling of Colorado, wrote about some of the lessons he’s learned from 12 years of guiding clients in their ERP pathways and decisions.

Given our thirty years of experience, we thought we’d take a few of Mr. Kimberling’s comments and splice them with our own to provide a few thoughts on some of the key lessons we’ve all learned about what he likes to call “digital transformations” or broadly speaking, ERP implementations and workflow improvement initiatives.  For the most part, the topic points are his, and the advice following is ours.

  1. Here we are in unanimous agreement: It’s more about the people and processes than it is about the technology.   Identifying key processes, establishing the right workflows, seeking to make users comfortable with change… and mapping all these efforts into a suitable software solution that removes redundant efforts, eliminates disparate information silos,  streamlines peoples’ jobs and ultimately serves your customers more efficiently – these people- and process- focused initiatives are the real key to digital transformations.
  2. There is no one-size-fits-all answer. There’s a lot of good software out there.  Just as there are a lot of good implementation consultants.  Unfortunately, there are also a lot who know the technology but not the business processes.  Why would you hire anyone that’s not a subject matter expert in your chosen field?  Ours expertise is manufacturing and distribution — so don’t hire us to install your dental practice management software (or fill your cavities) — and vice-versa.
  3. Your business should drive your software and transformation needs – and not the other way around. That also means that if your software cannot be matched to the way you work, then you need to find different software.  (Another reason for hiring implementation consultants that know your territory, i.e., business.)
  4. Take the hype and the jargon with a major grain of salt. Tech is notorious for having a million buzzwords.  Cloud, SaaS, big data, XML, agile… the list goes on forever.  Once again, what’s best for the business?  At the end of the day, where your system is located (local, cloud, etc.) is less important than whether the tool you choose is going to be the right one for the way you work, and be up and running over 99% of the time.  The buzz words and the tech, while sometimes important, always matter less than the interests and flow of your business.
  5. The best technology will not fix broken business processes. We always insist on making the business process analysis the first item on our agenda.  Identifying process flows, both the current ones and what they should look like in the end, is what creates the road map to everything that follows.  Involve all the key stakeholders and users in your project in this crucial step from the very beginning.  That will ensure you’re starting from the right foundation.
  6. Failures, like successes, don’t happen overnight. Usually, win or lose, there is a trail of decisions, events and actions – all driven by people­ – that determines the success or failure of most ERP projects.  These occur along a timeline.  So when you see something going off the rails (and we always tell our own consultants this), be the first to pull the cord and stop the train.  Run towards the fires (issues).  It will usually only get worse if you don’t stop, pivot, re-evaluate and take corrective action to fix the flaws in your foundation sooner, rather than later.

Both Kimberling and we could list more, but today’s list should provide any company about to embark on a digital transformation or process and software upgrade with the key lessons they’ll want to know – before they begin the effort.

 

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