Well…what can I say…I’ve made my livelihood in the ERP space in some form or fashion since 1995, and with over 25 years of experience, there have been trials and triumphs, bumps and bruises, but mostly there have been lessons learned.
Today, I’m presenting 10 Commandments for NextGen ERP Implementations, these are some of the “lessons learned” on many ERP transformation engagements across several industries. But primarily in SAP technology, although a few experiences account from Oracle, Microsoft, Sage, and Infor technologies.
The premise of this blog post is that there are always going to be challenges on large transformation engagements, and hopefully, you can take some key learnings and apply them to avoid heartache and challenges.
To avoid such an eventuality in your organization, here are 10 commandments that organizations should consider…
1. Thou shalt have a purpose, and everyone and everything shall know it
An implementation without a purpose is a failed implementation. While a business case would justify the fiscal decision to implement the ERP, it is equally important to articulate the key benefits that each function will realize from this implementation.
Err on the side of over-communicating to the extent that when you walk the corridors of your office (even virtually) and stop to chat with any colleague, they should be able to articulate the business objectives of the ERP implementation.
2. Thou shalt empower thy leaders to make decisions, and support them
Decentralize decision-making, because unless leaders at the operational level are allowed to make key decisions affecting their processes and KPIs; you will fail to gain their ownership and buy-in.
Centralized decision-making just DOES NOT work in large transformation initiatives. This creates a bottleneck within fast paced programs where tasks are often measured in minutes. And, the age-old adage of “time is money”, is ever-present when you are paying for experts to advise and implement.
3. Thou shalt choose thy system integrator in wisdom, and hold them accountable to their statement of work
The choice of a System Integrator (SI) is crucial to an ERP implementation, almost as important as the ERP application itself. Conduct your due diligence, make those reference calls, do your fact-finding of their testimonials and customer successes from recent and relevant customers.
Secondarily, ensure your SI project manager and the workstream leads are knowledgeable, engaging, and have a strong collaboration with teaming skills; and ensure both you and your SI understand the statement of work; there should be no ambiguities!
4. Thou shalt keep thy emotions in check
ERP implementations are like changing the direction of a large vehicle while driving on a single-lane road. Almost every phase, from managing the steering committees to monitoring cross-departmental initiatives, has its own share of frustration. Tempers flare and arguments ensue. It is in times like these, that you need to decide/choose your battles.
5. Thou shalt quash all thiefdoms, empires, and dominions
Change rattles people who want to “protect their turf”. With the new ERP comes glorious possibilities to break down silos and share information across the organization. This naturally makes people uncomfortable and oftentimes they will fight, rebel, or worse, sabotage projects.
Change managers need to be politically savvy and navigate this complex maze of vested interests so that no one person or a group of people holds the organization ransom.
6. Thou shalt appoint an empowered internal transformation champion and a trusted program manager
To accept that it will all go smoothly borders on naïveté. The choice of a Transformation Champion and Program Manager and has to be a shrewd one. These two people should be equally comfortable while swimming with the sharks as they are walking with the lambs. Both should be empowered by the highest levels of the organization so there is no hesitation in ruffling a few feathers and making the tough call when required.
7. Thou shalt realize that scope, schedule, and costs have a direct correlation with one another
Scope creep, change requests and cost overruns are encountered on every ERP implementation. It’s more important to realize this truism and manage it well from both the business and consulting sides: businesses will always strive for a larger scope and the system integrator will invariably push back. Especially once the statement of work is defined and a budget is agreed upon.
It’s important that key stakeholders and executive leadership understand that cost, scope and schedule are interrelated and if one changes, the others must change too!
8. Thou shalt understand how and why thou are implementing ERP…Fit to Standard, Fit to Purpose, Fit to Template
When you identify business reasons to implement an ERP, whether to reduce inefficiencies, improve access to data for better decision making, or any other reason…you will of course choose an system integrator and ERP provider that fits your budget and set of features that they offer.
Based on the above, the executive leadership and the steering committee must be aligned on the resulting implementation approach. Is the business looking to adopt standard industry processes or significantly customize the application to suit specific business requirements? Are you going to work with a global template or is every division going to have a separate implementation project? What about financial consolidation and group functions such as procurement, HR, and payroll?
Ask these questions up front and firm up answers that are clear, concise, and reassuring to the executive leadership, because unless this is decided, the project is bound to run into controversies and confusions later on.
9. Thou shalt understand that governance, risk, and compliance are crucial and that they can impact scope, schedule, and costs quickly and dramatically
Most implementations have business cases tied to them, and chances are at least some component of that business case is tied to governance, risk, and compliance. If your organization has not taken a critical eye to this, please, please, PLEASE do so. Governance, risk and compliance can impact user and security profiles, authorizations, workflows, process designs, data, analytic, and reporting functions to name a few. If your organization overlooks one of these areas or postpones them without fully understanding the ramifications you may very well be in for undue pain and inefficiencies let alone the monetary cost to correct them.
10. Thou shalt understand greater than 90% of thy organization’s processes are exactly the same as thy industry peers
This one that is near and dear to many consultants’ hearts…we constantly hear “our processes are unique and is our secret sauce”…this frankly is just not true…Your organization processes payments, purchases feedstock, manufactures product, counts inventory, extends credit, and does credits and debits in accounting just like everyone else…this is great news for you, it means you can implement standard processes across the vast majority of your business AND allows you to focus on innovation and differentiation in key areas that are truly your secret sauce!
To sum it up; plan well, learn from others, cover your bases, ensure you have strong empowered leaders who have experienced what you are about to go through.