Has anybody come across the following scenario: You are back to work and your CEO comes to you with a great idea: He wants to have an ERP (Enterprise Resource Planning) implemented asap. This is nothing but good news since you, as the IT leader for the organization, will be the “chosen” person to have this project up and running. Mind you, this will be a milestone in your professional career since so many considerations are to be taken into consideration…and politics played will make Machiavelli look like a novice. Thus, the only name that a project of this magnitude can be given in some institutions is “The hunger games” ERP project as there will be so many people trying to ensure the implementation meets their requirements, not caring for anybody else.
Something very important to remember: An ERP is not implemented just by the IT department neither is it an “IT thing”: It is a collective effort, business driven and business focused. Should anybody think that they can ignore and avoid any involvement in the implementation as they don’t belong to IT, and the project will be heading into disaster. Furthermore: the higher the implementation is sponsored, the better.
REASONS FOR WANTING AN ERP
There are plenty of reasons why a company may want to implement an ERP in their company: From wanting to unify their accounts to have a more controlled environment where OPS is aligned with every other department.
Word of caution: An ERP is not a magic tool. At the beginning it will “just” show you your data in a rational way and in real time. However, it will only show your data, this is, data that you have introduced. An ERP does not have a magic wand that will make appear data that isn’t there neither will fill the gap with consistent data that was never consistent. If you are living this scenario you will have to pre-clear, consolidate and populate whichever data you want to use in the ERP.
REASON FOR NOT WANTING AN ERP
There are also as many reasons for implementing an ERP as to not to implement it. I’ll get to the point: If you don’t want to dedicate time and resources don’t even think about starting a project like this. You will fail as you don’t really want to have a new system in place. There are also behavioral reasons: “We have always done business this way, why should we change now?”
…and there are also “not so clear” reasons. An ERP is a very effective way to control and audit everything you do, starting with your finance. If you don’t like the possibility of someone coming to have a look “into your things” or you just manage your company “the old way”, you can stop reading here. An ERP is not for you.
Business transformation is not about putting new technology in place, is about changing the way we work alongside the way we think.
Implementing an ERP is a cross-functional project so everybody will try to “chip in” their things and make a good use of the new “tool” (as far as every department is concerned). However, the business as a whole must have a strategic vision as a lot of time and effort will be needed during the process…not mentioning money. All these variables make that an ERP implemented be the tool to use for many years, so at the time to choose the solution this must be also considered.
If you are unsure look around and see what are the solutions implemented in your vertical / industry. There are many occasions in which the perfect solution is not the best solution for you. Keep always in mind what fits your company and, as the song goes, “don’t believe the hype”. If you don’t have the internal expertise seek for external assistance of someone independent or, as a lesser evil, a company that is affiliated with multiple ERP makers so they can offer you cons and pros of every one of them.
Depending who was the instigator of the ERP implementation making clear what needs to be installed will be a fundamental part, but other “players” in the business will have a word on this. You may want to have a short implementation while additional modules will be added in the future. Lets say for instance that you start with the “usual” financial module, but you may want to add HR, OPS in any of the different flavors, logistics, etc. Just make sure that that your solution can cater for this as going “the cheap way” in the beginning may cost you a lot in the future. Remember that the cheapest solution is not the most economical.
This is where most people fail. It does not matter how capable the ERP is or how it is implemented if the people in the business or the project team feel that the solution is not fulfilling their needs or expectations. Implementing an ERP could take anything in between for ever or months, depending on what is expected to be implemented…the “how long is a piece of string?” question. Clear scoping and clarifying from beginning to end will help everybody around the implementation be engaged and with a feeling fulfillment as far as their needs are concerned.
Implementing an ERP is not about money, it is about devoting enough time to ensure that everything is implemented as it should. The project team will have to take time to plan, design, implement and test, and there should be a commitment to do so. If anybody is planning to be part of the project team just because it will may them look good in front of the executes and everybody else in the business just think twice before “volunteering”. People not committed to working properly in the project should be removed from the team and replaced as soon as possible, “no ifs no buts“ allowed.
Control the situation before the situation controls you.
PLANNING: The give-in / give up process.
As the scoping was made clear now it is time to go into the detail and what and how the tool will be implemented. Great detail should be achieved and documented, dont overestimate the planning time as it will be the solid soil upon which you will be building your entire solution. Part of the detailed planning will be the processes and procedures that will be in the ERP.
Some people may want to have their very same processes replicated in the implementation but, is this right? I strongly believe this should be the time to review what you have in place and optimize everything. Also, and let me warn you, there will be some heated debates (to say the least) that will reach top management. I will give you some real life examples:
- Can everybody in OPS buy regardless of whether the item is not budgeted?
- Who can authorize what and for what value (expenditure matrix)?
- What reports can be created and who can create/see reports?
- How is the system, data and users audited?
- If HR is in the ERP, can they recruit without budget?
- Can the budget be modified at any moment in time and, if so, by who and how it is controlled?
- Etc, etc, etc.
As you can see planning is not a five minute job, thus what I mentioned before about time commitment by the project team…and again, dont be “cheap” on project planning and documenting time as this will ensure your implementation success. However, be practical and don’t over-do what is clear and simple if everybody agrees. I came across some industry colleagues in the Middle East when I was living there that told me that the planning period in their company took over a year as the project director was an external consultant brought just for this task…go figure!!!.
Before you release your ERP for general usage you will have to test how it works. Thorough testing should have been planned with how, who and what results are expected as well as a matrix of approvers for go-live. Depending on the way you are project-managing the implementation this phase will happen a number of times, depending whether it is a waterfall method, agile (in sprints), etc.
Something that you should not overview. Most companies nowadays have external consultants and / or auditors for the financial affairs. I would advise you to include them, at the very least, during this phase (if you can afford it also include them in early stages, such as in the scoping and planning phases).
Depending on how big your project is there are multiple alternatives. The safest way is to run whichever systems you have been using historically in parallel with the new ERP for some time so you can compare results. This way will need extra effort by everyone as you are doubling the time (at least). Some may say that since the ERP should help people should need less time to introduce the same data in the new system…wrong!!! Firstly, there is a learning curve for the users as they dont know the system fully plus they are normally extra careful not to introduce data wrongly, jeopardizing the accuracy of the results.
You may also go in one go from a single swich off – switch on go-live, but again, this should be clear almost from the beginning of the project. This is the riskiest as you, obviously, will trust the new system having tested its accuracy.
Implementing an ERP is not a one-man-band task. Everybody in the business will be involved and their way of working will change transforming their business. Think what you want, plan properly and implement with everybody’s involvement. That is the only way to warranty success for everybody, not just for the project team but for the business as a whole.