In a post over at Sourcing Innovation blog, “the doctor” starts with this interesting statement;
“A recent CIO blog post asked what does a “successful” ERP implementation actually mean? This puzzled me, because the answer is easy: One that is never started.”
Wow…that’s quite a position to take. A few years ago, I would have dismissed a statement like this as the deranged ramblings of an overworked, underappreciated IT worker mired in a multi-year ERP deployment and on the verge of a nervous breakdown.
Today, however, we are starting to hear comments like this from C-Level executives. Not so easy to dismiss.
The CIO blog referenced above has an interesting statistic; Enterprise software had only a 7 percent chance of coming in on time, would cost more than estimated and would likely deliver unsatisfying results. While I don’t necessarily take statistics like this at face value, if reality is anywhere close to the study, it’s not exactly a stellar endorsement…
So, if your current systems are not meeting today’s business needs, what’s the answer?
- Assess your needs. I mean, really assess your needs. What business needs are driving you to implement this system? Is the business problem localized or is it cross-functional? Is there another point solution that could solve this problem with far less cost and disruption?
- Don’t let the ERP vendors “Suite Talk” you. We’ve talked to many companies who, after years of frustration, have turned off the various bolt-on modules sold to them as part of a suite from the ERP vendors. In many cases, these additional components were given away to push reluctant buyers over the edge. Don’t let the ERP vendors fool you. The true cost of these applications is in the bloated implementation costs, the performance impact of running these tools and the doctorate degree you need to understand what they’re actually doing.
- Know what you’re getting in to. Do your homework. Do your due diligence. Don’t just rely on the ERP vendor’s implementation figures. The ERP vendors will be very optimistic about the time, effort and cost to implement a system. Talk to other customers that have implemented that software to find out how long it took. Ask them how much time and money was budgeted and compare that to what it actually cost.
- You don’t have to go big. The ERP vendors would like nothing better than selling you a multi-year, multi-million dollar project to replace your global planning systems. Going back to my first point, assess your needs! Do you really need to do it all at once? Start with a small project focused on the key business need, then expand as new needs evolve. When this small project is done, reassess your business needs! The business world changes fast and your business needs change with it.
- Don’t forget the people. When evaluating systems, include all stakeholders and be sure to include the subject matter experts, not just the department executives. The people using the system, doing the job, will have the best chance of identifying potential roadblocks or issues with a given solution. They may also have a better chance of seeing through some of the ERP “Marketing Speak”.
- Again, don’t forget the people! Once a system is selected, make sure that you do training and conference room pilots. Include the people who will actually be doing the work! Depending on where your systems are today, your training may need to be broader than just on the software itself. We see many examples of companies where planners and buyers do their day to day jobs without understanding the theory behind ERP systems. They may have gotten away with it on the old system, but might really struggle with the new because they don’t have the underlying theory. APICS is a great resource for general supply chain knowledge.
Planning systems are a reality in today’s world. When the time comes to choose, be aware of the options, be aware of the risks, be aware of the alternatives and don’t be “seduced by the suite” As my CEO says, suites can be sour.
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Tags: Advanced planning & scheduling (APS), Enterprise resource planning (ERP), Supply chain management software
Posted in Best practices
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I am truly amazed; this is the first time I have read fairly strong recommendations regarding the reality of selecting and implementing ERP systems. I whole heartedly agree with John’s comments. I have been suit talked way too many times over the years and watched companies take on implementations that never ever paid off but conversely perpetuated everything from as John says nervous breakdowns and destroyed careers to totally devastated company reputations in the market place. Then, when the implementing company wants recommendations from the “suits” on how to clean up the mess properly, the “suits” are gone and some independent consultant comes in saying “you didn’t change the business enough to gain the advantages”; the point is, you just devastated the business making the recommended changes and now they want more change?
My recommendation, be very very careful, smaller understandable modular systems are probably better, systems that you can add to and comprehend as you go, select your internal team and implementing consultants wisely from real world applicators not the “BS” artists.