Tag Archive: erp success

ERP Project Success: How to Be Part of the 20%

December 1st, 2016
ERP success

Even as the value of ERP systems becomes more apparent successful implementation is still elusive. Companies that focus on people, design, and testing the limits have better results.

More and more clients are pursuing ERP implementation projects as executives realize they need better tools to support business objectives– growth, service, margins, cash and the like.

When implemented well, ERP systems can support substantial business growth without the additional investment in resources. Certainly, as the minimum wage goes up and workers’ compensation and healthcare are such significant issues, it is something many executives are thinking about! However, ERP systems can do much more – they can help collaborate with customers and suppliers. Those with the best-extended supply chains will thrive in the end, and so it makes sense to take a look at upgrading ERP.

Thus, finding a way to successfully implement an ERP system is of paramount importance, yet the statistics dictate less than stellar performance. Typically, 80%+ of ERP system implementations fail to achieve the expected results. As experts in this space, we can attest that several of these are due to unrealistic expectations without the associated resources and efforts to ensure success; however, either way, ERP success can prove elusive.

Therefore, understanding how to give you a leg up with strategies for success can be vital. Ignore all the best practice mumbo-jumbo and focus on what will really matter:

1. It’s all about the people: As with almost every business success, ERP success is no different. It goes back to the leader – and the team. Have you assigned whoever is available to lead the project team? Or have you put thought into it? Have you freed him/her up from their regular activities or made sure he/she can dedicate the time required? Are you saving your “A” players for growing the business and your day-to-day responsibilities instead of ERP? Sound odd? Well, we come across this on a daily basis in our consulting business. How about the software supplier’s project team? Why should you be worried about them? You shouldn’t unless you are interested in success.

For example, we’ve been involved in several ERP selection projects lately and have stayed involved to ensure the process designs would support business objectives in the best way possible, and, unfortunately, we can convey countless examples of the 80% that run into issues with people. For example, in one case, the project leader was on top of things – truly much better than the average project leader for the size company, yet the project still struggled due to people issues. The software supplier ran into trouble with their project manager. You never know what can go wrong and so it’s smart to remember to keep your eye on the importance of people.

2. Focus on design: The reason we often stay involved with the design process is that this is one of the critical success factors to ensuring ERP implementation success. The quandary is that this type of role requires a broad and diverse skillset, rarely found in project managers.

The skills required include a broad, cross-functional process expertise, an understanding of database design, an understanding of down-the-line impacts of typical system transactions, an understanding of report writing/ programming and the ability to communicate effectively and bridge the gap between the technical and application resources. In our experience, we run across this type of resource 5% of the time in our clients. On the other hand, we run across this type of skillset perhaps 30% of the time with the ERP resources; however, the really bad news is that even though the capability exists 30% of the time, it is used perhaps 10% of the time. The ERP supplier does not want to dictate the design as it will be “their solution” instead of the “client’s solution”, and it is a trick to communicate effectively enough such that the client believes it is their idea or is accepting of the information.

Is it any wonder ERP projects fail miserably?

3. Focus on what could go wrong: It is often rather difficult to keep the ERP project team positive and moving forward because they are causing disruption to the day-to-day success of the business and pushing the envelope with new ideas (sometimes perceived to be threatening or ill-conceived) and process changes which might or might not be accompanied by organizational changes (another key issue with ERP success). Thus, no one wants to create more havoc by deliberately creating tension, thus, forcing practice when mistakes are made and transactions go awry is overlooked. However, this is exactly what must occur to ensure success. Deliberately try to screw up the system when testing. It is not to be a “naysayer” (which can sometimes be the perception) but it is to make sure the team knows how to back out of bad situations. It is far better to “break” the system in test than with your #1 customer!

We cannot tell you how much nonsense we’ve heard about “system XYZ” is set up to perform best practices and so the team just doesn’t want to deal with change. In 95% of the situations, this statement isn’t true. Instead, forget about all the hoopla about best practices and focus on these 3 keys to success; results will follow.

 

Did you like this article? Continue reading on how to Profit Through People:

How to Increase Teamwork to Ensure Project Success

Serving up an ACE in Your ERP Selection and Design

 



ERP Project Success: How to Be Part of The 20%

November 2nd, 2016
ERP Success

More and more clients are pursuing ERP implementation projects as executives realize they need better tools to support business objectives – growth, service, margins, cash and the like.

When implemented well, ERP systems can support substantial business growth without the additional investment in resources. Certainly, as the minimum wage goes up and workers’ compensation and healthcare are such significant issues, it is something many executives are thinking about! However, ERP systems can do much more – they can help collaborate with customers and suppliers. Those with the best-extended supply chains will thrive in the end, and so it makes sense to take a look at upgrading ERP.

Thus, finding a way to successfully implement an ERP system is of paramount importance, yet the statistics dictate less than stellar performance. Typically, 80%+ of ERP system implementations fail to achieve the expected results. As experts in this space, we can attest that several of these are due to unrealistic expectations without the associated resources and efforts to ensure success; however, either way, ERP success can prove elusive.

Therefore, understanding how to give you a leg up with strategies for success can be vital. Ignore all the best practice mumbo-jumbo and focus on what will really matter:

1. It’s all about the people: As with almost every business success, ERP success is no different. It goes back to the leader – and the team. Have you assigned whoever is available to lead the project team? Or have you put thought into it? Have you freed him/her up from their regular activities or made sure he/she can dedicate the time required? Are you saving your “A” players for growing the business and your day-to-day responsibilities instead of ERP? Sound odd? Well, we come across this on a daily basis in our consulting business. How about the software supplier’s project team? Why should you be worried about them? You shouldn’t unless you are interested in success.

For example, we’ve been involved in several ERP selection projects lately and have stayed involved to ensure the process designs would support business objectives in the best way possible, and, unfortunately, we can convey countless examples of the 80% that run into issues with people. For example, in one case, the project leader was on top of things – truly much better than the average project leader for the size company yet the project still struggled due to people issues. The software supplier ran into trouble with their project manager. You never know what can go wrong and so it’s smart to remember to keep your eye on the importance of people.

2. Focus on design: The reason we often stay involved with the design process is that this is one of the critical success factors to ensuring ERP implementation success. The quandary is that this type of role requires a broad and diverse skillset, rarely found in project managers.

The skills required include a broad, cross-functional process expertise, an understanding of database design, an understanding of down-the-line impacts of typical system transactions, an understanding of report writing/ programming and the ability to communicate effectively and bridge the gap between the technical and application resources. In our experience, we run across this type of resource 5% of the time in our clients. On the other hand, we run across this type of skillset perhaps 30% of the time with the ERP resources; however, the really bad news is that even though the capability exists 30% of the time, it is used perhaps 10% of the time. The ERP supplier does not want to dictate the design as it will be “their solution” instead of the “client’s solution”, and it is a trick to communicate effectively enough such that the client believes it is their idea or is accepting of the information.

Is it any wonder ERP projects fail miserably?

3. Focus on what could go wrong: It is often rather difficult to keep the ERP project team positive and moving forward because they are causing disruption to the day-to-day success of the business and pushing the envelope with new ideas (sometimes perceived to be threatening or ill-conceived) and process changes which might or might not be accompanied by organizational changes (another key issue with ERP success). Thus, no one wants to create more havoc by deliberately creating tension, thus, forcing practice when mistakes are made and transactions go awry is overlooked. However, this is exactly what must occur to ensure success. Deliberately try to screw up the system when testing. It is not to be a “naysayer” (which can sometimes be the perception) but it is to make sure the team knows how to back out of bad situations. It is far better to “break” the system in test than with your #1 customer!

We cannot tell you how much nonsense we’ve heard about “system XYZ” is set up to perform best practices and so the team just doesn’t want to deal with change. In 95% of the situations, this statement isn’t true. Instead, forget about all the hoopla about best practices and focus on these 3 keys to success; results will follow.

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Why ERP Success Has Little to Do with Systems

April 28th, 2016
ERP Success

ERP success depends on the quality and understanding of the people involved, from suppliers to team members.

After partnering with dozens of clients to help them select the “right” system that best fits their business requirements and partnering with many more to design the “right” processes in conjunction with their systems and people to achieve their objectives, it is clear that ERP success has little to do with systems! Counterintuitive but true!

As with almost everything, success boils down to people! That is a large part of the success of selection to cut through the “red tape” associated with ERP demos to look solely at critical success factors in conjunction with the ERP partner. If the supplier doesn’t understand the critical success factors, there is no point in collaborating. That means the people involved didn’t dig into enough detail to understand their potential partner.

In ERP success, suppliers are not good enough. It is hard enough to gain success with ERP as it is a major change initiative; whereas, there is no hope if you view your ERP partner as a “supplier” vs. a “partner”. The same is true if your ERP “supplier” views themselves as a “supplier” vs. a “partner”.

Next, choose your ERP team carefully. It will be time consuming and so dedicate the resources upfront. Figure out how to back up your resources.  Assure them of their career path. The ONLY way to ensure success is to have a high-functioning, dedicated team. It will involve the big picture, details and everything in-between. Make sure to have diversity. Leverage strengths.  Get the “right people on the bus” (as one of my mentors used to say), and it will all fall in line.

If you want to learn more about my new proprietary process ACESM — how to select the best system for your particular needs and/or how to design the “right” processes for your business in conjunction with your system, people/culture and strategy — please refer to our webpage or contact us.

Did you like this article? Continue reading on how to Profit Through People:

 

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4 Critical Success Factors Key to ERP Success

March 15th, 2016
erp success

To successfully implement ERP, start by identifying your critical success factors and align these factors with business processes and system functions.

I’ve always focused part of my business on ERP selection projects as these leverage the unique combination of my strengths — understanding the cross-functional and cross-organizational view in combination with the strategic priorities to identify the critical success factors. We then align these factors with the optimal business process design and system functionality to ensure success.

I’m in the final stages of developing a new proprietary process for ERP selection, called ACE (assess and align critical success factors to achieve your desired endgame). The key to success lies with critical success factors. Think about the following when thinking about critical success factors:

  1. Profit drivers – What drives the company’s profit? What is key to success? For example, when I was VP of Operations, I was responsible for cost. Although labor cost was utmost on the Board of Directors’ minds, it wasn’t the most important cost driver. Raw material costs were a much more significant percentage of product cost. Thus, focusing resources on material cost was the smartest way to drive profit.
  2. Alignment with strategy – Strategy can dictate a critical success factor. For example, if customers are core to success, making sure the system can easily address core customer requirements is cornerstone. How flexible is the system to meet those needs in alignment with your strategy?
  3. Differentiators – What does your business do differently from the competition? What are your unique differentiators? Make sure your system supports these.
  4. Unique system functionality – Often-times, there is functionality which is unique to your industry or way of doing business. For example, in metal processing, there can be attributes of metal which have to be considered in understanding items and inventory. Does your system support this without having a separate item for every possible combination of attributes?

Start by identifying your critical success factors. You wouldn’t want to start building a house by picking out curtains when you didn’t have the proper foundations in place. Consider your ERP system in a similar light. Stay tuned for the introduction of my new proprietary ACE process in next month’s newsletter…..

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