Who's Afraid of Big ERP? Maybe You Shouldn't Be

Ann All
Slide Show

12 Tips for a Successful ERP Launch

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

I've never implemented an ERP system, but I've read many accounts of ERP projects gone wrong. All that reading left me with some preconceived notions about ERP. Some of those preconceptions were confirmed during my interviews with folks who had completed ERP projects. For instance, I decided it really is best to keep ERP customization to a minimum.

 

Others were pretty soundly debunked. Based on the fact that most ERP disasters I read about involved very large projects, I figured splitting projects into smaller incremental chunks was a good idea. That may have been true at one time, but organizations are increasingly thinking big about ERP, said Bill Allison, a principal with Deloitte Consulting, when I spoke to him last week.

 

Organizations used to begin ERP projects by tackling an area like human resources, moving on to more sophisticated processes like supply chain several years down the road-if at all. But that's changing, Allison said:

Everyone was afraid of that big bang option in terms of go-lives. Now implementations are accelerating. Hourly rates are going down due to global labor arbitrage. And the products are getting better and safer to implement.

While organizations aren't necessarily spending more, scopes are getting bigger because costs have dropped. Features once considered nice-to-haves are now commonly included in scopes "because people can afford them and the industry is getting better at implementing bigger scopes," Allison explained.


 

When I interviewed Pete Martin, CEO of EntryPoint Consulting, about ERP success factors, he called a phased approach to ERP "really a 90s legacy thing." Like Allison, he said costs had dropped and technologies had improved, making big ERP a realistic option for more organizations, especially midmarket ones with fewer unique systems or processes than their larger counterparts. He said:

... In the middle market, you typically don't have as many unique systems or processes, so you can capture 80 percent or 90 percent of what a business does in a single phase. I think the reason most companies didn't do [big ERP] is the level of risk. But there are more checkpoints now, so the risk is less now than what it was 10 years ago.

Whether organizations decide to go big or small with their ERP implementations, they'll improve their odds of success if they include three steps suggested by Panorama Consulting Group's Eric Kimberling in a recent blog post:

  • 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.


Add Comment      Leave a comment on this blog post
Mar 16, 2011 10:07 AM Richard Richard  says:

Self serving nonsense -  These "Consultants" are advocating large spend on ERP systems that are so poor that you need a huge "Change Management" program to implement them.  Hopefully your clients will wake up and smell the coffee before you do and turf you out on your ear!

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Apr 1, 2011 6:59 AM Lindsey Niedzielski Lindsey Niedzielski  says:

Great post Sue. This is a great resource for anyone who may work with ERPs in the future. We have bookmarked your post on our community for IM professionals (www.openmethodology.org). Look forward to reading more of your work!

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Apr 28, 2011 3:26 AM Phil Simon Phil Simon  says:

Is a phased approach to ERP "really a 90s legacy thing?"

I have mixed thoughts and, by way of background, know a thing or two about ERP. My first book, Why New Systems Fail, is based on my years of experiences doing ERP and CRM implementations.

You can't go completely agile. Waterfall still has its place. No, you don't have to do it all at once, but many companies cannot pay employees in department one out of the new ERP while concurrently maintaining a trove of legacy systems.

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