At Panorama, we’re more than a little obsessed with ERP success . . . and ERP failure. We read about, research and analyze both sides of the ERP coin every day both to better our own understanding of the industry and to hone our PERFECT methodologies that we use to help clients achieve the best possible outcome during every aspect of an ERP implementation. One of the issues we see a lot, both in our own work and in our reading, is businesses that mistakenly sacrifice their operations (in one form or another) in a desperate attempt to get their ERP system up and running. This can take many forms, but the most common ones are:
1. Pulling key staff members away from their daily duties to focus exclusively on ERP. This is a tricky one — on one hand, key staff members must be involved to ensure that the ERP software is the correct solution for the company, that people are aligned with it and ready to use it, that key performance indicators are in place, that goals are being achieved, etc. On the other, one person can’t be in two places at one. If these same folks also are tasked with running important business functions for the company or organization, then something will have to give. The solution is to either hire more people or profoundly reallocate duties to make sure that there are adequate resources working on both the ERP implementation and the core business.
2. Standardizing key differentiators. The impetus to standardize processes is one of the great benefits that implementing a new ERP system can bring to a company. And at Panorama, we’re all for it except in areas that provide competitive advantage to an organization. If a manufacturing company makes its widget in the quickest, best way in the market then it must continue to do that — no matter what the ERP vendor or systems integrator says. Companies desperate to realize benefits from their multi-million dollar ERP systems sometimes make the mistake of standardizing everything to the “best practices” of the system, which is a major mistake and can end up costing the company dearly.
3. Going live at the wrong time. For companies that have spent untold money and months getting an ERP system in place, the urge to hit the switch, so to speak, can be intoxicating. Executives want the system to be up, project managers want to meet timeline expectations, and everyone else is anxious to to see what’s going to happen. But choosing when to go live needs just as careful consideration as any other aspect of the implementation. Still don’t believe me? Take a look at Shane Co. — the jeweler went live on an SAP system in September 2007. The results were disastrous and included not having the right inventory mix for the Christmas season — a death knell in the retail world and a key contributor to the company’s bankruptcy filing a year later.
Your company’s success has been built on its processes, people and decision-making capabilities. An ERP system implementation shouldn’t take any of that away. Instead, it should serve to strengthen and bolster the competitive advantages and differentiators your organization has achieved.
This mindset must be in place at the very beginning of the project during ERP software selection. Choosing the right software for the organization is a critical ERP success factor, and the key to choosing the right software is business blueprinting. Join Panorama president Eric Kimberling for Thursday’s webinar, Tips on How to Build a Business Blueprint for ERP Systems, and learn some of the techniques necessary to make sure your business not only survives its ERP implementation but thrives because of it.