We can get your ERP implementation done in 6 months or less, no matter how big your organization is. Our pre-configured ERP systems will allow you get the system implemented in no time. Our software can be used out of the box in a matter of weeks. Sound too good to be true? That’s because it is. Unfortunately, however, these are common messages in the ERP software industry. These unrealistic expectations are a key reason why most ERP implementations fail (read more in our 2010 ERP Report).

In order for any ERP project to be successful, you first have to define what you mean by “implementation.” If your definition is a technology implementation, then yes, it is relatively easy and can probably be done in a matter of weeks or months. However, if by implementation you mean true business transformation with full employee adoption, improved business processes, and tangible business benefits, then it’s going to require a bit more effort.

When assessing your ERP project timeline, it is important to make sure you have included key elements that will help you make your project successful. Below are seven key items that, when overlooked, constitute the seven deadly sins of ERP software implementations:

Program Management. Managing the installation, configuration, and testing of the ERP software is the easy part. Managing the business, process, and organizational aspects of the business transformation is much more difficult. Managing all of the different moving parts of the software implementation, such as business process improvements, business acceptance, and organizational change management, requires strong program management, governance, and controls.
Business process and workflow definition and improvement. On the surface, it may make sense just to adopt the business processes and workflows built into the software and hope for the best. For those of us that have been through dozens of ERP implementations, however, it just isn’t realistic. Today’s ERP systems are so robust, flexible, and powerful out of the box that processes and workflows still need to be defined in detail. In addition, business process improvements, workflows within and outside the system, and employee roles within the system all need to be defined before the system can be fully adopted.
Organizational change management and communications. For most organizations (if not all), an ERP implementation involves massive change. Employees at all levels are impacted significantly, which creates anxiety and resistance to change. A robust organizational change management program is crucial to gaining employee adoption and business benefits from the system. And organizational change management is much more than software training – it includes communications targeted to each major workgroup, business process training, organizational impact assessments, redesign of employee roles and responsibilities to match the new system, and a host of other key activities.
Business and technical integration. A single, fully integrated ERP system with no integration to other systems or business processes is an urban legend. Every implementation that we see involves some type of integration to systems and business processes outside the system. This integration needs to be managed from a technical and business design and testing perspective; otherwise, the system will be fragmented and disjointed, which defeats the whole purpose of ERP.
Globalization and localization. Our larger, multi-national clients often ask us to implement their ERP solutions in a way that will help them standardize business processes across multiple locations and countries. This is a noble goal that might be realistic for 90% of your business, but some level of localization needs to take place. Whether we’re talking local regulatory needs, reporting requirements, or shipping and customs processes, some aspects of the global rollout may require localization and can delay a project if these aspects aren’t defined early on.
Independent oversight of technical resources. One of the top reasons that clients hire us to manage their ERP implementations is to help manage the scope, efforts, and costs of functional and technical software consultants. Without clear direction, guidance, and project controls, it is easy to fall into a spiral of unnecessary customization, configuration and set-up that doesn’t meet key business requirements, higher costs, and longer durations. Our research shows that hiring independent consultants like Panorama to manage ERP deployments significantly reduces total costs.
ERP Benefits Realization. This may be the biggest sin of all. Too many companies spend millions of dollars only to fail to realize the expected business benefits. In fact, our independent research shows that most ERP implementations fail to realize at least 30% of the expected business benefits. A key reason for this is a lack of a robust ERP benefits realization program. This is an area that most ERP consultants and software vendors fail to address, usually because they don’t know how. This is also one of the reasons that our organizational change management and benefits realization offering is in such high demand.

While it may be possible to implement ERP systems quickly when defined in the narrow technical sense, it is more important to focus on the big picture and do it right the first time. ERP implementations are usually expensive, but they are even more expensive when they’re not done right the first time. When assembling your project team or software vendor’s proposed ERP implementation plan, it is important to keep these seven deadly sins in mind.

What do you think? Share your thoughts by taking the below poll.

Note: There is a poll embedded within this post, please visit the site to participate in this post's poll.

Originally posted on 360º ERP Blog

The Seven Deadly Sins of ERP Implementations

Archives

June 7, 2010 1:45 PM

Program Management. Managing the installation, configuration, and testing of the ERP software is the easy part. Managing the business, process, and organizational aspects of the business transformation is much more difficult. Managing all of the different moving parts of the software implementation, such as business process improvements, business acceptance, and organizational change management, requires strong program management, governance, and controls.
Business process and workflow definition and improvement. On the surface, it may make sense just to adopt the business processes and workflows built into the software and hope for the best. For those of us that have been through dozens of ERP implementations, however, it just isn’t realistic. Today’s ERP systems are so robust, flexible, and powerful out of the box that processes and workflows still need to be defined in detail. In addition, business process improvements, workflows within and outside the system, and employee roles within the system all need to be defined before the system can be fully adopted.
Organizational change management and communications. For most organizations (if not all), an ERP implementation involves massive change. Employees at all levels are impacted significantly, which creates anxiety and resistance to change. A robust organizational change management program is crucial to gaining employee adoption and business benefits from the system. And organizational change management is much more than software training – it includes communications targeted to each major workgroup, business process training, organizational impact assessments, redesign of employee roles and responsibilities to match the new system, and a host of other key activities.
Business and technical integration. A single, fully integrated ERP system with no integration to other systems or business processes is an urban legend. Every implementation that we see involves some type of integration to systems and business processes outside the system. This integration needs to be managed from a technical and business design and testing perspective; otherwise, the system will be fragmented and disjointed, which defeats the whole purpose of ERP.
Globalization and localization. Our larger, multi-national clients often ask us to implement their ERP solutions in a way that will help them standardize business processes across multiple locations and countries. This is a noble goal that might be realistic for 90% of your business, but some level of localization needs to take place. Whether we’re talking local regulatory needs, reporting requirements, or shipping and customs processes, some aspects of the global rollout may require localization and can delay a project if these aspects aren’t defined early on.
Independent oversight of technical resources. One of the top reasons that clients hire us to manage their ERP implementations is to help manage the scope, efforts, and costs of functional and technical software consultants. Without clear direction, guidance, and project controls, it is easy to fall into a spiral of unnecessary customization, configuration and set-up that doesn’t meet key business requirements, higher costs, and longer durations. Our research shows that hiring independent consultants like Panorama to manage ERP deployments significantly reduces total costs.
ERP Benefits Realization. This may be the biggest sin of all. Too many companies spend millions of dollars only to fail to realize the expected business benefits. In fact, our independent research shows that most ERP implementations fail to realize at least 30% of the expected business benefits. A key reason for this is a lack of a robust ERP benefits realization program. This is an area that most ERP consultants and software vendors fail to address, usually because they don’t know how. This is also one of the reasons that our organizational change management and benefits realization offering is in such high demand.

Blogger Profile: Eric Kimberling

With over fifteen years of consulting experience, Eric Kimberling has a wide range of professional expertise in companies ranging from the SMB market to large corporations. Eric’s background includes extensive ERP software selection, ERP organizational change, and ERP implementation project management experience.

Twitter: http://twitter.com/erickimberling
Linkedin: http://www.linkedin.com/in/erickimberling

Posted by Sue Ansell at June 7, 2010 1:45 PM

Categories: Enterprise Resource Planning (ERP)

Comments

TrackBack Link

Print Page Email To A Friend

Insightful business speaker Jim Harris talks innovation in
Speaker's Corner

Backbone's Digital Economy Acceleration Committee


Remember me
Name
URL (remove the http://)
Email
Comments (field is limited to 2000 characters)