Sometimes, it’s not about picking the perfect meal, it’s about how it’s delivered. I could be served up the best dinner possible from a Michelin-star chef but, if it’s served on a dirty dustbin lid as a plate, I’d be less inclined to consume it with gusto. I’d be disappointed that I was promised an incredible meal, but it’s been presented to me in the worst possible way.
You don’t need reminding of the pivotal role an ERP can play, enabling organizations to manage complex information, support and integrate core processes from strategic planning to day to day-to-day operations and provide insights that help drive organizations forward.
The reasons that programs often disappoint and disrupt are also well rehearsed. To quote Harvard Business Review: “a lack of time, insufficient budget, a lack of collaboration and user buy-in, people not understanding the purpose of the change, poor leadership and senior level support and poor communication all contribute.”
Organizations are too often sold ERP as a panacea to all their problems and typically overstate the likely benefits to secure the capital, resource and time needed to support the investment. Even then, programs are likely to cost more than planned in time, focus and organizational disruption and won’t fully deliver on promised benefits.
So, before an organization commits to this level of investment and potential pain, what ‘needs to be true’ for an ERP enabled transformation to be successful and what questions should be asked?
What’s the size and shape of the hole that your ERP implementation needs to fill?
Is implementing an ERP at this stage the right thing to do and what does it need to deliver?
An ERP is only one part of an overall operating model, it delivers the system capabilities that are necessary to support whatever it is the organization needs it for.
The big risk here is that an ERP can simply ‘codify’ items that genuinely don’t work properly and, when this happens, an organization would have just spent a seven-figure sum to make it harder to unpick and change the original underlying problems. When an ERP is implemented incorrectly, it can very quickly become an irritant, nothing more than an expensive diversion from what leaders and managers should be focusing on.
As soon as implementation starts, there’s a rapid ‘falling back’ from the original plans to focus on landing the technology. A program that started life with high levels of commitment and enthusiasm from the whole leadership team, eventually becomes a major issue for the CIO and the program sponsor. The wider organization shifts its focus back to the day job and starts working round the change, and the organization misses out on the value that should have been created from the investment.
Who is responsible for the ERP implementation and are they fully committed to its outcomes?
The leadership of any organization will be focused on delivering against business strategy. If you can’t connect the program directly to key leadership, who is overseeing accountabilities, priorities, and pre-occupations?
An ERP system can help bring attention to operational risk, the high cost of existing arrangements, integrating global operations and driving synergistic approaches. While assessing what an ERP can bring to your business, you need to ask yourself: “Can what I want be achieved without an ERP and, if not, how exactly would an ERP help my situation?” If you can’t answer this question, then don’t expect senior leadership to take you seriously.
Are accountabilities clear in your current structure and can you explain the importance of the ERP at this level? Not only who’s directly accountable for the core business processes the ERP enables, but also how the ERP will improve these processes and the systems that facilitate them. This is the route to commitment and buy-in, and the key to avoiding an ERP becoming an IT project that other leaders can side-line.
This also impacts the way in which the progress of an ERP program is measured. Technical milestones, deliverables met and functionality improvements are broadly irrelevant at a software level. This is especially true if the implementation has not delivered on improved productivity, faster time to market, reduced compliance risk, or whatever the key outcomes are important to the organization.
If an organization can answer these two questions with confidence, then the typical program failure symptoms are much less likely to surface. There will still be a critical need for effective management of change but the foundations of available time, budget, levels of collaboration, user buy-in, understanding the purpose of the change, effective leadership, senior level support and compelling communication are far more likely to be there from day one and beyond the life of the program. If you want to make less of a meal of your ERP implementation, best start here.