purchase the right system, let's look at the burdens of an ERP
implementation and the organization's responsibility in meeting them. At
the same time, let's consider how to maximize your organization's ability
to capture ERP's potential, boost your ROI and avoid common mistakes.
Define the ERP implementation strategy
Even with a perfect business survey and total understanding of the
enterprise, any organization faces formidable implementation challenges
regarding ERP. Any true IT leader has experience with other projects and
core implementations, and knows this: Not only is the human equation
involved (by virtue of changes in methods, practices and jobs), but all of
the organization's data, enterprise programs and systems also are up for
review and potentially radical change.
As with any major business or IT change, define the ERP strategy in
advance. Avoid going into any aspect of ERP if the business has a murky
understanding of the technology, or if IT is making assumptions on the
business' behalf. Business drives business, with suggestions and support
from IT. Do not proceed into any area without proper business
understanding and sanction.
Be certain to complete a comprehensive survey that captures
whole-enterprise resources for true ERP and management. Don't overlook
efficiencies to be had, costs to be cut or shared, redundancies that can
be eliminated, and customizations that can be "umbrella-ed" over multiple
areas or process -- or that can be repurposed to other areas with minor
tweaks.
What to avoid in an ERP implementation
The experiences of other organizations should help you avoid common
mistakes, so perform due diligence as you would with any change management
program. Keep in mind this survey conducted by Panorama Consulting Group
LLC:
* More than half of companies that implement ERP systems get no more
than 30% of the business benefits they expected.
* Of the 1,600 organizations surveyed, 72% said they were "fairly
satisfied" with their ERP package. But this can be misleading,
according to the study: "Some executives are just happy to complete
projects ... and give little thought to whether or not the company is
better off with the new software or whether or not they're getting as
much out of the system as possible."
* More than half (51.4%) of ERP projects went over budget, and about
35% of the respondents said their projects took longer than expected,
the survey found.
How to avoid mistakes in an ERP implementation
The IT leader must engage the senior executives, achieve full-business
buy-in, hold business' and stakeholders' feet to the fire about defining
needs and expectations accurately, deliver ERP as a jointly owned system,
and enable and ensure best use -- and that's it! Easy, right?
Highly recommended is a business implementation team (BIT). It's headed by
the IT leader, and involves key business stakeholders and IT staff
members, who are steeped in knowledge about your organization's business
processes from the front- and back-office perspectives. The BIT must be
recognized and sanctioned by senior executive management, thus ensuring
engagement of members who are fully committed to traction and forward
momentum.
By branding the team a business implementation team (as opposed to a
technology implementation team or, in this specific case, the ERP
implementation team), the emphasis is where it belongs -- on the business
of the organization, the business process and the business people. This is
an important cultural distinction for the team and its subsequent
engagement with ERP: It protects the IT leader and staff so they don't get
too far ahead of business' desires, understanding and fully vested
participation.
* First and foremost, ensure executive support: Know where you stand,
what your sanctions are and the levels of support for every aspect of
ERP. Executive buy-in is vital to ultimate success.
* Diagram existing business processes and map existing workflows, have
"business eyes" acknowledge their accuracy and document them with a
business sign-off.
* Diagram proposed changes to business process and new workflows in
service to the business.
* Expose any "shadow" systems, procedures, workarounds and so forth,
that fly under the radar. Unless it's absolutely necessary, avoid
continuing them because they would obviously undermine ERP's
advantages, reach and purpose. (In fact, your survey of the business
should help tease these shadow processes out, and assist in
documenting and formalizing them.)
* Ensure that financial support exists for customizations.
* Develop ROI measurements and analysis to expose present
opportunities (and initial customization needs), as well as evolving
opportunities against which you can assess the adaptability and
affordability of an ERP system.
* Ensure that expected levels of customization are supported by
available or future staff, and that consolidations of resources and
any job eliminations are fully understood so as to serve true ROI. As
such, the human resources department (HR) should have a presence on
the BIT.
* It may sound obvious, but management and end users must be involved
in every step of ERP implementation planning. Seek feedback through
all steps and brand ERP as our shared system driven by business.
* In concert with business, define intentions and goals. Establish
metrics for progress and the rapid exposure of problems for fast
resolution during the implementation period, as well as use
post-delivery.
Determine whether a phased or all-at-once approach makes sense for your
enterprise. The all-at-once approach may create too much disturbance and
interruption, so part of this decision will be determined by the overall
skill, culture and willingness of the organization's business and IT
staff. It will also be determined by the expectations of senior executive
management and their sanction.
Organizations that have weathered comprehensive, challenging
implementations have the experience, and therefore the culture to remain
positive and push toward ultimate success. If your IT staff is a little
green, or if your business counterparts are nervous, you may be better
served by a phased approach.
Post-ERP implementation considerations
A post-implementation assessment of your ERP system is an important step,
and should be followed by periodic reviews and actions:
* Following delivery, have an established roster of surveys and
measurements to expose level of use versus best (expected) use of the
system. Be prepared to modify and institute better surveys according
to needs.
* Deliver survey results to senior executive management and respective
functional business areas.
* Help the business carry out ERP's effects: Close gaps in
performance, conduct training, make suggestions, seek advice from the
vendor and so forth.
* Place specific surveys and responsibility for reporting in business
areas -- in other words, tether ERP's ROI to stakeholder observations.
* Guide all post-delivery business engagement regarding ERP through
this prism: the maximization of all efforts toward best fit and best
use.
* Survey for routine updates.
* Survey to anticipate necessary corrections.
Bottom line: Ensure sanction from senior executive management to make
certain there is full stakeholder engagement in each functional area of
business that comes under ERP's influence. This will serve the
implementation and its associated challenges, and will ensure ERP's best
use for maximum ROI.
David Scott is a Fortune 100 IT professional. He is the author of
I.T.Wars: Managing the Business-Technology Weave. Contact him at
David-Scott@david-scott.net.
Fanky Christian
Business Development Director
PT. DAYA CIPTA MANDIRI SOLUSI
IBEC Building 2nd Fl
Jl. KH Wahid Hasyim No.84-86
Jakarta Pusat, 10340, Indonesia
SMS: 62-21-98054359
Telp: 62-21-3924716
Fax: 62-21-3903432
mobile: 62-812-1057533
www.dayaciptamandiri.com
Online Store: www.tokofc.com
visit:
- dayaciptamandiri.blogspot.com
- fankychristian.blogspot.com
- www.facebook.com/fanky.christian
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