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ERP 2021 – Why Your Next ERP Implementation Will Most Likely Fail

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I started this blog thinking I was going to write about the popular and sexy trends in the ERP industry for 2021.  I got about half way through writing this and then a voice in the back of my head kept saying that none of this will matter to over half the small manufacturers in WNY who decide to embark on an ERP implementation project this year.  If this were true, why shouldn’t I write something more relevant that would help companies whose implementations will fail?

If your organization believes that upgrading your ERP system is an appropriate investment for this year, I challenge you to stop leading this project with a focus on system functionality and capabilities (those sexy trends I was going to write about)!

The simplest and most challenging aspect of new ERP systems is that all the tools and supporting data are integrated.  In real time, order information entered into the system will have an immediate impact on purchasing and scheduling.  New parts added by engineering will have an immediate impact on costing information and quality.  There are literally hundreds of examples just like these.  The critical commitment associated with a new ERP system is that the new set of integrated processes will require commitment and buy in from every area of the business (finance, operations, engineering, purchasing, quality, etc.).  The senior managers that will have the most influence on the success of the implementation MUST buy into the fact that their primary collective objective is to define and promote the best possible internal processes, not what they believe is best or easiest for their departments.

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To me this falls in line with the philosophy that a chain is only as strong as its weakest link.  If you have 11 strong chain links (departments that are very committed to process maximization), the chain’s strength (success of the ERP implementation project) will only be as good as the weakest link (area of the business with the worst dedication to processes versus their own needs).

That being said, consider starting the ERP selection process not focused on the software and its capabilities.  Instead try engaging in healthy conversation about the area(s) that you know will struggle the most with standardized, integrated processes focused on inputting & managing information in real time according to established procedures.  In my 20+ years of helping companies in WNY select ERP systems, it often becomes clear to me in the first 30 minutes of the first meeting who or where the problem areas will come from.  Sadly, I have participated in several multiyear projects that have included the selection and implementation of these systems and the “problem child” identified in the first 30 minutes (2 years prior!), was the biggest impediment to that project’s success.

One of the biggest advantages that I have as an outside consultant with ERP experience is that it has been much easier for me to engage the “problem child”, educate them on the capabilities of ERP systems and the potential of future processes, and get them to understand the implications of some of their current decisions.  If the organization cannot (or will not) get this individual to change their mind, there are still positive outcomes from this conversation happening prior to the ERP requirements being defined.  The most notable is that the collective list of ERP requirements will have been lowered and a less complex (costly) ERP system will be purchased that is more in line with what the organization’s processes will look like following implementation. Secondly, you will have eliminated the frustration and inefficiency associated with competing departments trying to define future processes during the ERP implementation.  If it is clear what future processes are supposed to look like BEFORE you start the training and implementation phase, it makes this a much more efficient and less frustrating process.

In conclusion, my recommendation is to consider not starting the ERP selection process with discussions around functionality.  Instead consider defining the organization’s collective expectations of future processes.  I read an article that described one company who created future state process maps and had them signed (like a contract) by every departmental manager with influence over this process.  Would signing a future process “contract” help get your team’s attention?


If your organization is considering an ERP upgrade, reach out to get the conversation started.

Contact: Thomas Quinn, Insyte Consultant tquinn@insyte-consulting.com

thomas-quinnTom specializes in information technology, including systems integration, system requirements definition, vendor selection and implementation. He has led multi-million dollar, organization-wide technology and systems based projects for over 20 years. Tom is also an experienced practitioner of process improvement and organizational change management. Before Insyte, Tom managed a team of project managers at M&T Bank responsible for delivering client-focused solutions in office environments throughout the bank. He also worked as the technical operations manager for Integron Inc. Tom holds an MBA and BS in Electrical Engineering from the University at Buffalo. Tom is a certified ISO provisional auditor and possesses numerous lean instructor certifications.

 

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