4 Reasons to Ditch an ERP Project

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Posted by: briansittley Comments: 0 0 Post Date: June 29, 2017

Today, we present a counterpoint of sorts to common ERP selection advice, initially sourced from industry consultants at Panorama Consulting who suggested a few reasons why, despite the fact that business investment spending is up overall, businesses might consider ditching, or at least delaying their ERP projects, offered up for your review:

  1. Your business processes might be the real source of your problems. ERP alone does not solve organizational problems.  If anything, it merely codifies standard practices for use throughout the organization.  Better processes drive efficiency gains, and sometimes big improvements can be gained simply from reengineering yours.  But contrary to myth, you don’t need to know which software you’ll implement in order to reengineer those processes – if anything, it’s the other way around.  Fix the business process, then shoehorn the software to the business and not the other way around.  And in fact, something fixing the process is enough.
  2. Organizational roles and structures may be another issue. As industry consultants at Panorama Consulting note: “Many companies use their ERP implementations as a mechanism to drive organizational improvements such as standardizing operations, but the technology implementation muddies the waters of the real organizational change management work to be done. By defining and implementing your future state processes first, your ERP implementation will be much smoother.”  We couldn’t agree more.
  3. There are many good alternatives to monolithic ERP systems. Technology today has bred a best-of-class thinking that has allowed software providers to solve specific critical business problems discretely.  More often than not, they are commonly referred to as third-part “add-ins” and they frequently solve problems very, very well.  By shoehorning yourself into a single branded solution, you may be settling for mediocre performance or functionality in areas critical to your operations merely for the sake of a “really good accounting system.”  Fact is, today, most ERP systems contain really good accounting systems.  But many of the best focus on doing a few things well, and then let established affiliate partners take care of the many other functions that can make a system really work for your unique needs, i.e., “best-of-breed.”
  4. A technology-agnostic analysis and strategy can be your best way forward sometimes. At our firm, we do them both ways: agnostic and biased.  The agnostic approach says: Just look at us and our processes (or suggested improved processes) and objectively define what we need without paying attention to any specific software.  It’s one good method.  The biased approach says: Take a look at our business and based on your prior experience and knowledge, if you want to slant us towards a solution you already think could work for us, then do that.  This often helps make it easier to paint a more detailed picture of a potential future state, and it can work well when your consultant knows your company already, or you have achieved a mutual level of trust.  Either approach works; it all depends on your own goals and biases.

The overarching point here of course is that it’s not always necessary to throw out everything to improve your processes, your organizational roles or even your software.  A good consultant will work with you to define your true business objectives, and then help you decide on the path forward that is most comfortable and secure for you.

 

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