As we move officially into the second half of this year (wow… how’d that happen?!), we return today to some timely comments about ERP…
Panorama Consulting Solutions in Denver, through their blog and articles, often convey opinions and survey results about Enterprise Resource Planning (ERP) software solutions. As often as not, we find ourselves concurring with many of their conclusions – after all, we’re pretty much in the same business, and after over 25 years of doing this, we’ve seen many of the same types of successes and failures.
Recently, President Eric Kimberling parsed his thoughts about just what constitutes ERP success.
On the one hand, he noted, too often “success” mean that, well, basically, ‘we survived the project.’ Or, some executive considered their ERP project a success because no one lost their job – or at least he didn’t. Or maybe they didn’t screw up the company’s operations. It may simply be a preservation tactic since, as Kimberling put it, “no one wants to admit to overseeing a failure.”
Admittedly, ERP implementations are fraught with complexity, and the bar may be set low to acknowledge these facts. Kimberling cites the fact, apparently the result of his firm’s frequent surveys, that the average $100 million company recoups about $1 million in tangible business benefits per year from its implementation. Unfortunately, that’s about $2 million less than they anticipated, or about $20 million over the useful life of their system.
How can a company avoid a similar fate? According to Kimberling, it should…
“Start with a measurable business case that is used to manage business benefits – not just thrown on the shelf after justifying the project. The business case should be very tangible, specific, realistic and actionable to ensure that various stakeholders in the organization can be held accountable for achieving those results.”
Their second key piece of advice…
“Engage in business process re-engineering, rather than the “paving the cowpaths” approach that most organizations take. This means ensuring that you have adequate time built into your project plan to identify and implement significant operational improvements.”
Here we could not agree more. With our own clients and prospective clients, we also go to great lengths to emphasize the importance of an initial Business Process Analysis. We use these to match a client’s processes and workflows to the software and technology solution being considered. We believe it’s the only way to begin an ERP project – and the single most critical phase at the onset.
Finally, Kimberling counsels…
“Ensure that you have a solid organizational change management strategy in place… Without employee acceptance and adoption of new business processes and software, the new ERP system is exactly that: just an unused system.”
There are a lot of fruitful benefits to be harvested from a successful ERP implementation. Make sure yours extend beyond only the low-hanging fruit.