It is easy to understand why people would consider an ERP implementation as an “IT Project” or “computer issue”. After all, there are a lot of hardware components involved, many technical considerations, and most people that interface directly with the ERP do so on a computer. While all of that may be true, looking at an ERP Implementation as an IT project is one of the biggest mistakes an organization can make as a system is implemented that will support the organization for the next 10+ years.
Imagine an ERP Implementation where everything technical was perfect: All hardware functioned properly and system performance was off-the-charts, all data was converted accurately, all interfaces were set-up and operating as intended, and the out-of-the box ERP functionality of the selected system could handle every business procedure that the organization needed to operate. Does this sound like the perfect implementation? I submit that there is still a lot missing, and a lot can go wrong even with all of the mentioned scenarios being true. In fact, with the evolution we have seen in functionality and technical capability the ERP world over the last 15 years, those items are becoming less and less of issues.
What makes or breaks an ERP Implementation today then? People. Let’s explore the top 4 people related mistakes that are made during an implementation and then summarize with what an organization should do to avoid them:
- Improper Project Team Staffing – The best players in an organization are always busy. Nobody questions that the business must continue to operate during an ERP Implementation. The first mistake organizations can make in response to this reality is to rely solely on outsourcing to implement a system. Yes, organizations do need assistance from outside firms as the product knowledge and expertise on implementation approach is not likely to exist within the business, but implementing an ERP system also requires a deep knowledge of the business and its’ goals. The intelligence on organizational operations and vision can only come from within and must be there, hand-in-hand with the installation of the ERP.Once an organization commits people to the project, the next common mistake is not including the “best and brightest” the company has to offer on the team. This is often due to the perceived availability of those employees. The company must do what it takes to make them available. ERP Implementations are time sensitive and require a lot of decision making. Not everything can be tabled to bi-weekly steering committee meetings, which is why the project needs regular involvement from those empowered to make decisions. Not doing this puts pressure on employees who should not be making those decisions to do so. This mistake results in the thought process and decisions being questioned after go-live, long after the system was built and the project moved on. The rework that results is a multiple of the original effort that would have been required had the right people been involved.
- Lack of Senior Management Buy-In – Every organization looks to Senior Management to set organizational priorities. In order for an ERP Implementation to be successful, the entire staff must understand that the initiative is a key strategic element of the future of the company and requires effort from everyone to be successful. There will always be some element of resistance to change and the declaration to embrace change and promotion of the vision need to come from the top and trickle down through all the ranks.
This effort cannot end with a rousing project kick-off meeting. It is the nature of these projects that there will be issues and there will be challenges for individuals and the business as a whole. Employees will look to leaders during these times and observe how they react. Senior Management must continue to be positive and convey the “can do” attitude as their reaction will be contagious.
- Complete Culture Shock – It is tempting, especially for organizations that have not invested in upgrading their ERP system in a while, to try and go from 0 to 60 in 2 seconds. In today’s ERP world, there are so many great things that can be done to make the workforce more informed and productive, that it is easy to look past the basics. Trying to do everything on day 1 can put a process and technology burden on an organization that is tough to overcome. Smart project planning involves a phased approach where existing and necessary business processes and a few key new features are implemented first. This allows the user community within the organization to focus on doing the tasks they know they have to do, and just learn a limited amount of new processes along with a new interface. Once a comfort level is reached on the basic processes, adding on additional new business procedures is much more easily accepted. Sticking to this thought process will reinforce the organizations commitment not to commit to “scope creep”, the continued adding of processes and functionality, after the project plan has been defined and the project has started.
- Incomplete Training – There are two components to training and improperly planning one or both results in a go-live that is much more stressful than it needed to be. The software functions should be extensively trained to all users before a go-live, not just the project team. Using a properly configured test environment with the companies’ own data will provide exposure to the system in a stress free environment for the employees. Then, when the system is live, there will not be that feeling of unfamiliarity when functions need to be performed quickly and accurately to support a process such as customer service. A second and equally important component to training is for the staff to understand the organizational goals and reasons for the business processes. This conceptual understanding of why processes are set-up a certain way compliments the system functionality training. Employees who do not understand the business processes are more likely to miss steps, which can lead to incorrectly posted transactions or missing data down the line that another employee was counting on for support.
It is people that will make the difference between the success and failure of a project in a number of ways: commitment, attitude, planning, and communication. Before even considering the technical components of a project, an organization should focus on defining the company goals and vision. Once it is clearly determined what the project should accomplish, get the right people involved that are empowered and capable of supporting that mission. Get the entire organization excited about the project and embracing the change. Give people the tools, knowledge, and support they need to contribute to success and you will experience a successful ERP implementation.
By: John Hannan – National Microsoft Dynamics AX partner