Enterprise Resource Planning (ERP) implementation projects today are costing companies tens, even hundreds of millions of dollars, yet all too frequently they encounter major problems, delays and cost overruns. Worse, after months or years of spinning wheels and getting nowhere, more than a few eventually get cancelled outright.
Often, the initial thought is to blame the ERP package itself. But in most cases, the system, be it SAP or Oracle or whatever, is not the primary reason for the difficult implementation. Rather, the real problem can usually be attributed to poor process. How can I be sure? The evidence can be found in companies with superior implementation practices, which today are succeeding with the same ERP systems that don't seem to be producing satisfactory results for other companies.
What makes for a best-practices process? If there's one overriding principle, it's this: Treat the ERP implementation as a business-change project, rather than an "IT" project. That means:
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- Assign a senior executive to take full-time responsibility for the business side of the project–someone more senior than might seem necessary at first. In the end, there is typically an extensive amount of business change required to achieve the full benefits of an ERP implementation, and making this change actually happen requires a massive amount of leadership–senior leadership.
- For the business-user side on the project team, assign only high-performing (or high-potential) staff. These are the people determining the changes in company processes that are needed to make the ERP implementation work. I have seen many a project fail simply because the people assigned to the project were "the ones who happened to be available," rather than the company's best and brightest.
- Establish a rigorous, formal decision-making and "escalation" process to ensure that the business trade-off decisions are made in a timely manner. Problems often come up when the factions within the company can't agree on how individual processes should be handled.
- If you are using a systems integrator, make sure you insist on and are getting that company's "A-team," which you can only assess by interviewing each team member individually to determine their level of experience with the specific software and implementations in that industry. Look for three to five previous implementations. If you are hiring employees or using independent contractors for expert roles, make sure you do enough due diligence to ensure that they indeed have plenty of business expertise, in addition to their package expertise. Business-knowledgeable ERP experts will help you take advantage of the standard options available in today's systems; a tech-crazy geek is more likely to go off designing expensive and problematic custom modifications.
ERP software can help a company globalize and standardize its business processes, so treat it like the business program it is and you'll make it to the endgame relatively unscathed.
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