Enterprise Resource Planning (ERP) systems exist to manage and integrate all the important parts of your business. And optimising your ERP investment ensures a solid foundation for more efficient business processes to support digital transformation. Dave Beldyk, President and Founder of DABCO Consulting LLC and a strategic partner of CCi, recently answered some key questions about how to succeed with ERP implementation in today’s manufacturing and supply chain environments.
How many ERP implementations succeed?
First, I think it’s important to understand what it means to ‘succeed’. Although there are varying degrees of success, we generally consider an ERP implementation to be a success if it is delivered:
- with the full set of stated benefits under which the project was originally justified
Based on that definition of success, somewhat less than half of all ERP implementations actually succeed.
Why do so few ERP implementations succeed?
There are several reasons for this, but one of the top reasons is inadequate organisational change management. I believe the fundamental failure of most organisational change methodologies is that they are all focused on the changes which will occur AFTER go-live and none of them seem to address the important changes an organisation should have in place BEFORE go-live. Because most methodologies do not require an organisation to implement and demonstrate tangible capabilities first, there is always a certain ‘leap of faith’ that happens at go-live. And some organisations are able to stick the landing, while others stumble.
What can organisations do now to better prepare for an ERP implementation?
In my experience, it is far better to implement as many of the supporting business processes as possible in advance of the ERP implementation. In fact, I’ll take it one step further and boldly state that: Organisations should implement as many of the supporting business processes as possible even before bringing on an ERP solution provider.
What are some of the advantages of first implementing the supporting business processes?
- Changes are implemented at a pace commensurate with the organisation’s maturity without the tremendous financial pressures that come with a fully involved ERP project
- The effectiveness of the implemented changes can be measured and used as a critical readiness metric to help decide when the time is right to bring on the expensive ERP implementation army
- The duration of the ERP solution provider’s involvement is reduced to the absolute minimum because all the things that an organisation can and should do on their own have already been done
- The amount of change that must take place at go-live can be reduced by as much as 30-50%
- The likelihood of achieving a highly successful go-live is greatly improved
Should an organisation upgrade its current ERP system or implement a new system?
That decision is often driven by external factors such as:
- a precipitating business event like a merger or acquisition
- an announcement from the ERP vendor that your version is about to go out of support
Outside of those types of external influences, it is usually the perception that the current ERP system is underperforming that leads organisations to contemplate an upgrade or re-implementation. But before diving into a new ERP project, it is very important for organisations to determine if the problems are truly system shortcomings, or if they are the result of poor business processes. If it is the latter, then that is where the effort should be spent, not on a new ERP project.
How does the ERP Optimisation TRACC assist manufacturing organisations today?
The ERP Optimisation TRACC offers manufacturers a new and innovative approach for preparing for an ERP implementation. By applying proven continuous improvement methodology to the front end of an ERP implementation, the ERP Optimisation TRACC helps organisations naturally build the kind of internal ERP capability and understanding, before go-live, that many organisations only acquire after years of operation. This helps ensure implementation success while simultaneously minimising the time and money spent on expensive solution integrator resources.
Where can I learn more about the ERP Optimisation TRACC?
Book a demo to find out more about this new approach to ERP implementation that delivers maximum ROI.
Read Dave Beldyk’s article 5 signs your business processes are inhibiting ERP success and discover whether your current ERP system is limited by your data and processes.