Three Success Factors for ERP Implementations

Ann All
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12 Tips for a Successful ERP Launch

Clear expectations and planning can improve your experience and near-term success.

In college I made the traditional spring break pilgrimage to Florida with four other young women. We discussed renting a car, but to save money we opted instead to take a sedan owned by a parent. We ended up wishing we'd rented the car when the aging sedan broke down and we had to pay to have it towed and fixed. (And by "we," I mean my parents who provided their gas station credit card information to me to pay for the repairs and never saw a dime from the parent who owned the car or any of my friends.)

 

In addition to my parents' money, we lost time that could have been spent working on our tans waiting around in a gas station where the mechanics and other employees seemed less interested in fixing the car than in giving us a hard time.

 

Moral: Instead of watching every dime, sometimes it's better to spend more upfront. Even though I've mostly learned that lesson, I still sometimes do something to save money that ends up costing me more in the long run.

 


I often wonder if that isn't the case with some ERP projects. Knowing ERP's reputation for excessive expense, companies try to cut spending where they can and end up scrimping on areas that could save them plenty of headaches down the road.

 

Just yesterday I wrote about a $61 million judgment against Ross Systems Inc., a company accused of fraud related to the sale and implementation of its ERP software. Attorneys for Ross Systems cited a lack of executive buy-in and user training among factors contributing to the ERP problems.

 

I don't know enough about the particulars of the case to know whether the client considered those things or spent enough time and money addressing them. But I do know these are the kinds of details that can derail ERP initiatives. Writing on the Panorama Consulting Group blog, Panorama's Eric Kimberling taps unrealistic expectations as the No. 1 reason for ERP projects exceeding budgets and schedules. He writes:

When developed by an uninformed or inexperienced internal project manager, most project plans fail to consider key non-vendor and non-software activities, which are the real drivers of cost and time. For example, organizational change management, integration to third party systems, data migration, and business process design are some of the activities that we see many organizations fail to account for.

Granted, consultants and other partners must educate clients about these issues. But they can't force clients to take their recommendations.

 

In addition to lacking a realistic ERP implementation plan, companies also tend to neglect organizational change management, writes Kimberling, who has 15-plus years of ERP experience. Asuret Inc. CEO Michael Krigsman also mentioned the importance of change management in his recent column on five best practices for buying and implementing ERP, which I cited in my post about the Ross Systems lawsuit. Another point emphasized by both Krigsman and Kimberling is establishing clear goals for ERP and what Kimberling refers to as a "business blueprint." He explains:

By business blueprint, we don't mean the system design that your software vendor or VAR will perform-we mean defining your business process and organizational design that the ERP system will support. How will you structure your business operations and roles and responsibilities going forward? How will you maintain and extend your competitive advantage in the market using your new ERP software? An effective business blueprint allows your business to drive the software rather than the other way around.

To recap Kimberling's "three things that will dramatically increase the odds of your ERP implementation success":

  • Develop a business blueprint. (And stick to it, I'd add.)
  • Develop a realistic implementation plan. (Again, stick to it as much as possible.)
  • Invest in organizational change management. (Take my spring break lesson to heart.)


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