Too many times I watch companies spend an immense amount of financial resources to get a new ERP system, and then skimp out in the one area that is the most critical to success…people. Today, I beg those companies who are on the verge of deploying ERP not to be half-hearted about getting the right people to push all-in on the project.
In some cases, I wonder if the ERP vendors could be at least partially responsible for this. There can be a propensity for ERP vendors to promise the world when it comes to having consultants there to “walk you through every step of the process”. There is just one problem with this theory. If a software consultant was an through and through expert on the inner workings of your company, they’d be on your payroll making your organization stronger.
Consultants are Good, Champions are Even Better
I am not anti-consultant by any means. I worked in that role myself. Consultants can absolutely be indispensable to a company achieving its goals under the right conditions. I spent time with some very good ones over the years. There are three I can think of in particular were able to bring ideas to the company that ended up paving the way for meaningful, lasting changes.
All of that said, there is no substitute for indigenous expertise when it comes time to effect cultural change. This cultural chais is required for a successful ERP implementation. Successful ERP projects, in my experience, are more about people than they are about technology. There are absolutely going to be challenges with the technology. Additionally, there will be times when the technology and your current business processes will seem incompatible. There will also be times when it seems like things are not going to work out at all. These are the times when your internal teams are going to be the key to success. The ability to observe, listen and use their long experience at your company will pay huge dividends. As a matter of fact, it will keep the project rolling forward.
It’s Not Just About ERP Implementation
Implementations are a lengthy process. It is not uncommon for the average length of implementation to be around 18 months, and some large scale project can go on for years. Moreover, a go-live event on ERP is not the end of the process, it is really more like the beginning. The first 12 to 18 months after go-live require a ton of firefighting, custom reports, re-training, and the ten thousand variables you didn’t account for in the planning stage. The name of that game is survival.
The next 18 months after that will hopefully be spent really getting processes, people, and systems dialed in. Your analytics programs should be taking on a life of of its own, giving you insight into the business you never thought possible. Productivity should be going up, and costs should start to go down. The end of this phase could be up to 4 years after you decided to buy a new ERP system. Did I mention that throughout this process, you will also be working through 4 to 8 version upgrades, depending on your vendor’s development cycle. Even if you are cloud based, there are training and procedural implications that need to be worked through.
ERP is a Dedicated, Full Time Gig
Part-time project management is not going to get you where you want to be with your ERP project. This is a full time gig. Depending on the size and scope of your project, it could be several full-time gigs. Your project leaders are the face of your ERP system. They carry the torch, fix the problems, and deal with unhappy people. Hopefully, they will also help you find ways to get more from the system. These things cannot happen when your ERP leader is serving 2 masters.
The people who know your company best may be in roles where they are “too valuable to move out of that job”. That is a fallacy. What you will end up with is a person who is not 100% effective at anything they do. How does that do you any good? In “Good to Great” by Jim Collins, we learn that you should “put your best people on your biggest opportunities, not your biggest problems.” Why spend such a large chunk of your working capital and not give it the best chance for the fastest path to success?
Your current IT team has enough to do. They will be busier when supporting the infrastructure that goes along with your new system. Resist the temptation to overtax them and put the responsibility for the ERP system on them. IT staff are a critical part of the ERP project. However, line of business experts are equally critical. They bring a perspective from the front-lines of the business. Whether it is process related, internal politics, customer or vendor issues, or a litany of other tribal knowledge subjects, these leaders can quickly bridge the context gap.
Recommendation
When planning an ERP implementation, or if you are struggling with one after implementation, put together your ideal ERP administration team. Dedicate full time positions to this team. Get them engaged, provide incentives to them for getting ROI from the system. Make sure there is accountability in place; have metrics and make sure you are meeting regularly to review them. It is also important to have a project pipeline in place and moving forward at all times. This team should always be pushing to extract more value from the system.
Don’t fall into the trap of short-changing ERP. I recently attended a speaking engagement where the presenter put forth the statistic that on average, companies only use about 30% of the capabilities of their ERP system. Break the trend, put the team in place that will get you to 70% or higher utilization.
Best of luck getting the most from your investment!
AP
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