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Is Your ERP Software Implementation in Trouble?

Is Your ERP Software Implementation in Trouble?

Most ERP software implementations don’t fail overnight. They fail over weeks, months, or even years of poor decision-making and execution.

Unfortunately, most organizations and project teams don’t recognize the signs of pending failure until it’s too late. Much like the “frog in boiling water” analogy, project teams typically don’t feel like they’re failing until they’ve crossed the point of no return. This is because they are too close to the project to see the bigger picture, don’t have the experience base to know any better, and/or ignore many of the pertinent warning signs.

Through our years of helping companies either avoid failure or recover their failed implementations, we have identified some of the most common warning signs overlooked by project teams. Below are just a few of the warning signs you should be looking for:

Your Organizational Change Management Plan is Incomplete and Consists Primarily of Training

This is the most common failure point we see. If you don’t have formal organizational change management activities planned before end-user training, your project is in trouble. Most “real” changes happen (or should happen) prior to training, so be sure you have incorporated a structured communications plan, change impact analysis, customized training materials, organizational readiness assessments, and other critical change activities to make your initiative successful.

You Don’t Have Multiple Iterations of Conference Room Pilots or User Acceptance Testing

Poor testing and user acceptance is the Achilles heel of many system integrators and ERP vendors. A “working” technical solution doesn’t necessarily mean it is going to work for your business, yet your vendor is most likely to focus on the technical aspects of training. This doesn’t really matter, though, unless you’ve fully tested the system to ensure that it fits your business processes, the data has been fully tested, integration with other systems has been vetted, and security roles and profiles are ready for prime time. As a general rule of thumb, you should have at least three iterations of conference room pilots or user acceptance testing built into your project plan.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

You Don’t Have a Formalized Process for Customization or Configuration Requests

Even if you are a collaborative organization that generally listens to the needs of employees, you should be relatively inflexible when it comes to customization requests. You’re on a slippery slope once you start approving customization requests, so we typically advise clients to ensure that the executive steering committee approve all customization requests to minimize risks and rationalize any potential need to change the system. This should be formally baked into your project charter and project governance processes.

Pre-Implementation Planning and Business Process Mapping

Beginning implementation of a new system can be very exciting, so it’s understandable why you and your team members may want to jump in and start doing stuff right away. However, you need to have your ducks in a row up front to ensure that you are making the best use of your time, budget, and resources. Companies that take the time for a pre-implementation phase to map out business processes, define project governance, ramp up project resources, and tighten up overarching implementation plans generally implement more effectively and less expensively than their more impatient peers. It may be in the best interest of your vendor and system integrator to the let the meter start running on their technical resources right away, but it’s not in yours. Remember, it’s your project, so you should set the tempo of the project to fit your needs from the very beginning.

You Aren’t Conducting an Independent Assessment of Your Implementation

Unless you manage ERP implementations every day, you’re not going to notice the inevitable warning signs that are often the “canary in the coalmine.”  Even your technical vendor, VAR, or system integrator isn’t going to notice these same warning signs in their narrow focus on the technological aspects of the project. This is where outside, independent expertise and guidance can save you a great deal of time, money, risk – and heartburn. For example, Panorama provides independent ERP project oversight and project management services to ensure that you are getting the most bang for your buck out of your enterprise software investment.

These are just a few of the dozens of warning signs that you need to watch for in your project. If you’re worried that your project is already off track, then don’t worry: contact me to learn more about our ERP project recovery services to help get your project back on the rails.

Why Your ERP Evaluation Process May Be Rigged

Why Your ERP Evaluation Process May Be Rigged

Recently, I was working with a potential client whose ERP evaluation process was rigged. The potential client didn’t realize it at the time, which made the situation especially risky.

I started Panorama 12 years ago, because of this very concern. Most ERP consultants, system integrators, and value-added resellers represent the software vendors rather than clients’ best interests. It concerns me that so many firms operate with economic incentives. These “incentives” can be misaligned with what’s best for companies. Keep in mind that these are often multi-million-dollar ERP initiatives with a lot at stake.

Part of the conundrum is that it’s not always obvious when a third-party is biased. There are a host of things that can lead to a rigged evaluation process, but here are some common ones to watch out for:

1. Your Consultant is a Value-Added Reseller of One or More Software Vendors

This is probably the easiest one to sniff out, but one that is often overlooked. If your software vendor is a reseller of software or has any sort of economic incentive to sell a certain software, then you’re probably not getting a truly agnostic and unbiased recommendation. Be especially aware of companies that claim to be agnostic because they represent more than one solution (see point #2 below).

2. Internal Politics or Economic Incentives of Your Consulting Firm can Lead to a Biased Recommendation

Even if a consulting firm or system integrator isn’t a formal partner, there still may be other economic or political incentives that cause bias. For example, many large consulting firms are resellers of both SAP and Oracle. In theory, they could help you decide between the two systems, but you will always be nudged toward the group with the most internal political clout or the one that provides the biggest economic incentive.

Before launching Panorama, I worked for one of the big consulting firms. We helped clients evaluate multiple systems that we represented, but we had our preferred solution. The prevalent choice was often pointed to the one with the biggest bench of resources that we had to keep busy. The only way to receive a truly independent ERP recommendation, is to ensure that there are literally no financial ties with vendors or any solution-specific resources on the consulting team.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Software Vendor Demos can Create False Internal Perceptions of the Software

Whether you work with a consulting firm or not, you will want to make sure that your vendor demo process doesn’t create a biased view of your software options. Your internal employees will form opinions based on emotion or sales spin if you let this happen. It’s important to have a structured and disciplined demo process based on your specific needs and requirements, rather than what a software vendor might want to show you. It is not unheard of for demos to contain “future-state” features. These future-state applications may not even exist in the current software, but are a glimpse of what might exist in the next release.

4. Your Consultants or Internal Resources Don’t Understand ERP Implementations

This is all about having the right people in the room. If you or your team haven’t been through an ERP implementation (or better yet, several implementations), you may have very different expectations within your group. Unfortunately, an uninformed view can become misaligned with reality and create a high-risk backdrop for your project.

This sort of bias leads to a number of challenges, including an incomplete or misguided plan of how to implement the solution. For example, you may not know enough to realize how important business process management, organizational change management, program management or data migration are to a project. You may also not understand what level of effort these work streams will entail. The symptoms of unrealistic expectations often don’t emerge until the project is underway. The amount of time, money and resources required to make your implementation successful, are also common risk factors for teams that struggle with this bias (see #5 below).

5. Unrealistic Expectations of Your Implementation Timeline and Budget

Someone in your company has probably designated a timeframe and budget for your ERP initiative. While not arbitrary, it is also unlikely the work of an experienced ERP implementer. A software vendor is not going to tell you if it’s realistic or contradict your wishes. Unrealistic expectations are often a root cause of many ERP implementation challenges. Wouldn’t it be great if the project took less time, money, and resources than planned? Rarely is this the case. Forcing a timeline could lead to some bad decisions later.

For example, if you find that you can’t complete your project within that unrealistic timeframe or budget, you’ll be more inclined to cut organizational change management activities, which are arguably the most important critical success factor for an implementation. These pressured decisions are often forced upon you. An initial bias in planning your implementation is where the downward trajectory begins. Relying on a biased software vendor or ERP consultant’s opinion to validate your planning process only adds fuel to the fire.

There are ways to combat and mitigate biases. The straightforward answer: hire experienced independent ERP consultants (like Panorama Consulting) to help you with your evaluation, implementation planning and implementation process. This is the best way to smoke out biases while adding valuable resources to your bench.

Read this Before Beginning Your ERP Implementation

Read this Before Beginning Your ERP Implementation

Our clients typically get excited at the conclusion of their ERP software evaluation and selection process. Momentum is high, employees are energized by the prospect of a new ERP system and are often ready to dive right into an ERP implementation.

A word of caution: don’t jump in too quickly without building a solid foundation first. Companies that prematurely begin their ERP implementations run into some common problems, including:

  • Time and cost overruns, often caused by the software technical consultants’ meters continuing to run, while you finish making key decisions. There are many conclusions and issues to sort through before launching into implementation. Software technical consultants like to get in-and-out, so you need to control the pace between software selection and implementation.
  • You may be more likely to use the new software to automate your existing processes if you didn’t first take the time for business process reengineering. Reengineer and streamline your processes first, then adapt to the software. Only customize when it comes to the important things that are differentiators for your business. Over-customization will haunt you monetarily and in other ways over the long haul.
  • Take a step back and breathe. While the team may be excited, they are probably also exhausted after all the activities that go into selecting a software package. Debrief, continue to brainstorm the potential benefits and watch outs. The implementation phase needs a well thought out plan of its own and in many cases new/additional players may join in this next phase. Don’t forget to celebrate and recognize each successful phase with your team as it happens.
  • Sub-optimal business benefits and reduced ROI can occur if the above three bullets are not taken into consideration.

Here are seven tips that will help ensure you don’t fall into common implementation traps:

1. Create Your PMO Structure

Your ERP vendor or system integrator will provide a “project manager” for the technical work, but what about all the non-vendor related activities? You will want to ensure that you’ve defined how your overall program and project management will oversee the various workstreams and decisions required for a successful project.

2. Define Project Roles and Responsibilities

Every project and client is different, so there is no “one size fits all,” project structure. As the implementing company, you are responsible for defining project roles and responsibilities in a way that makes sense for you, so don’t feel compelled to defer to everything your vendor might suggest. Instead, define the roles and responsibilities, striking a balance between your internal competencies and bandwidth, the capabilities of your VAR and overall time and cost tradeoffs.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Make Key Strategic Decisions Regarding Your Implementation

Implementations all have their unique challenges and characteristics. Before starting your implementation, you will want to realistically define your phasing strategy, integration strategy, data conversion approach and a host of other criteria feeding into how your implementation is structured. You will eventually want to translate this into your more detailed project plan, tying together all the various activities and resources involved in the project. Your implementation plan is a living document; change it when necessary and monitor it continuously.

4. Define Your Future State Business Processes

A common misnomer (often fueled by software vendors) is the concept of letting their software drive your business process improvements. There are two problems with this approach:

1) There is no such thing as software “best practices.”

2) Software is too flexible for canned functionality to define business processes.

Keep these points in mind. Define your macro-level business processes first before starting technical configuration activities.

5. Develop an Organizational Change Management Plan

Your project’s success or failure is much more likely to rest on how you handle the people side of the equation rather than the technical issues. It is also more likely to be more of a critical path activity, so it is important to have a clear organizational change management strategy heading into deployment. Start by conducting an organizational readiness assessment, which will highlight the most important change issues your organization is likely to face.

6. Define a Clear Data Migration Strategy and Plan

Data is another likely critical path item. The later you wait to start cleansing, mapping and migrating data, the longer your project is likely to take. Decisions you make regarding your data conversion strategy are very likely to directly impact the success, speed and cost of your project. Having a clear strategy and plan up front will be well worth your time and resources. Best practice: take the time to determine what data doesn’t need to be migrated before the conversion.

7. Develop a Benefits Realization Plan

Most executive teams and boards of directors are not forgiving of deviations when it comes to the risk, cost and time associated with large-scale ERP projects and digital transformations. It is imperative you have a clear benefits realization and ROI plan, translating your business case into a tangible plan. It should be transparent and understandable. If anything, this plan will help you save your job, if and when, the project runs into serious difficulties.Remember that this is your implementation project and you control the tempo. Your software vendor, VAR, or system integrator may want you to start the implementation right away so they can get the meter running on their technical resources. This is why it’s important to make sure your foundation is solid.

Most of our clients leverage the assistance of Panorama during the implementation planning process. Helping manage the overall implementation, including keeping all parties accountable from an outside perspective can be invaluable. We are well-experienced in mitigating disruption risks, and clever at assisting with mid-course corrections if needed.

Ten Questions to Ask Before Starting an ERP Software Implementation

Ten Questions to Ask Before Starting an ERP Software Implementation

Let’s say you are about to choose and implement a new ERP system. You’re excited about the prospect of finally letting go of that old legacy system, and you and your team probably couldn’t be more eager to get started.

A lot of our clients find themselves in this exact situation after we’ve helped them select new ERP software. However, we typically advise them to slow down and take their time to build a solid foundation before embarking on implementation.

We do this for several reasons. First and foremost, companies with solid strategies and plans in place are much more likely to succeed. In addition, it costs them less money since the meter on expensive technical consultants won’t be running while these foundational activities crystalize. Finally, it insures that the project team has a clear sense of direction and expectations – which will ultimately make the project go more smoothly.

Here are 10-key questions to ask yourself before beginning your ERP implementation:

1. Do You Have the Right Project Team?

  • You want the A players from your company, it’s that important. Identifying them and freeing them up can sometimes be tricky. Plan to backfill your internal resources who will be consumed by the project
  • Add an independent external ERP expert as a collaborative additional resource. This will give you the best likelihood for success. This consultant will join forces with the team, and suggest best practices learned from other implementations
  • Also identify other resources you will need, such as vendor consultants etc.

2. What Will the Project’s Org Chart Look Like?

  • Project roles need to be clearly defined, along with reporting structures and relationships. There are many roles that have to be filled, so be sure your project organizational chart includes the project management, core team, functional, technical, organizational change, business process reengineering, and other key roles.

3. What Will the Total Cost of Ownership of the Project Be?

A common pitfall is to take a vendor’s software and implementation cost estimate at face value and assume it to be complete. It’s important to take it with a grain of salt, and add a dose of reality. In addition, you’ll want to make sure that you identify the variety of hidden costs outside the vendor’s purview before finalizing your “total cost” of ownership estimate.

4. What is the Justification or Business Case?

Successful companies quantify their business case and estimate/project the anticipated return on investment. Forget the whole “we’re doing it because we have to” form of justification. Instead, be sure that you’ve analyzed and considered potential business benefits just as carefully as you have the costs. Senior management is going to be looking for quantifiable metrics, and these measures will impact their opinion of a project’s success or failure.

5. What is Your Overarching Implementation Plan?

Your vendor, VAR, or system integrator’s proposed project plans are incomplete at best, so you’ll want to make sure that you’ve identified the missing activities that they typically don’t cover – such as a comprehensive organizational change management plan, data migration, conference room pilots, and other areas that are typically outside the scope of software vendors. You’ll also want to validate the vendor’s proposed phasing and rollout strategy by benchmarking to other organizations, which is something Panorama can help with.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

6. How Will You Integrate to Other Third-Party Systems?

Most organizations can’t address their entire spectrum of business needs via a single ERP system. Thus, it’s important to define how integration to other third-party systems will happen. In addition, it’s important to define an overarching solution architecture so you have a straightforward way to deploy a complete solution across your enterprise.

7. What Organizational Change Management Strategies and Tactics Will You Deploy?

Most software vendors, system integrators, and ERP consultants are woefully underprepared to address the organizational change management activities required for a successful ERP implementation. Unfortunately, this is something you will need to address either with internal resources or an independent third party specializing in organizational change, such as Panorama.

8. What Project Governance and Controls Will You Put in Place?

It’s no secret that many digital transformation initiatives run off the rails largely because of poor project management and governance. Your project charter must clearly state what controls you will have in place, how decisions will be made, and what issues or decisions will be escalated to your steering committee. I’ve seen many projects in jeopardy because of over-customization, typically a governance issue.

9. What Stage Gates or Milestones Will You Use to Evaluate Progress?

It’s important to take a step back to evaluate the project at regular intervals. Be sure to identify key milestones and criteria crucial to the project along the way. This will ensure that you make midcourse corrections before things get too far off track. Taking a step back, when needed is a sign of strength, not weakness. Don’t let project dates trump the importance of stage gate checks and actions.

10. How Will You Define Success?

This is a tough one. Perhaps it’s insuring that your organization is better off than before. Perhaps it’s a specific ROI figure. Hopefully your business is now better positioned to handle future growth. Or perhaps it’s as simple as not getting yourself or anyone else fired because of the project. Whatever measures you use, be sure you define and communicate the goals to your team early in the project. A best practice is to celebrate “wins” as the project is progressing.

Some of these questions are difficult to answer and execute on. They also vary from organization to organization, so there is no one set of one-size-fits-all solution. The best way to cover all of your bases, is to find a qualified independent expert that can help define the answers and assist in ensuring that nothing critical get missed.

Is Your Business Falling Behind? Your Antiquated ERP Might Be to Blame

Is Your Business Falling Behind? Your Antiquated ERP Might Be to Blame

An Enterprise Resource Planning (ERP) system is the backbone of business innovation. As a matter of fact, an antiquated ERP might just be the only thing standing between your business and growth. In today’s competitive business environment, a robust, well-integrated, and up-to-date IT infrastructure is a key ingredient to long-term success.

But a sweeping upgrade or replacement can be intimidating and costly. Some organizations tend to operate with aging systems on the premise that the current system, “still works.” An upgrade sometimes only becomes an option—the only option—when a malfunction occurs causing the system to stop. This creates big issues.

With market changes driving competition on a global scale, can your business afford to sit and wait to update, upgrade or replace your ERP system?

How an Antiquated ERP Hurts Your Business

ERP systems older than five years old may not have the capabilities necessary to bolster today’s retail, manufacturing, and supply chain activities. They often can’t support future expansion. As software ages, eventually software vendors stop supporting certain versions. You don’t want this to happen because it will clearly put your company in a reactive mode, which is never a good place to be.

Today’s businesses are also more diverse, where a new generation of employees are rapidly joining the workforce. Today’s workers, especially those working remotely, expect an ERP system that’s intuitive and compatible with IoT (think handheld devices, smart phones, etc.). Aging ERP systems often have many manual workarounds, lower employee acceptance, and reduced quality of output.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

What Makes a Robust ERP System?

A fast-paced, rapidly changing business landscape requires an agile and integrated ERP system. From enhancing your business performance to allowing better decision-making via advanced reporting capabilities, your ERP system can transform the way your business runs.

It can unify your core and non-core operations, including finance and accounting, inventory, warehouse management, fulfillment, analytics and reporting, sales, customer service, marketing, human resources, and other relevant processes and departments.

ERP software should also be user-friendly to enhance the productivity of your workforce and reduce errors. Newer ERP software can offer exceptional flexibility and multiple configuration options. It automatically updates on a regular basis, and can be remotely operated and accessed in real time.

Moreover, cloud options offer a whole new and expanding dimension to ERP.

Advantages of Hiring an Independent ERP Consultant

But how do you make the move from stone-age ERP to new ERP? Seeking an independent ERP consultant is a sound choice. This greatly enhances your chance for success.

An ERP overhaul is a long and complex process, and can be a major business disruption. It has many steps. To make sure it doesn’t divert your focus from critical business operations, choose an ERP consultant that understands your line of business, and can align their solutions with your objectives.

Letting an independent ERP consultant work with you is comparable to hiring an experienced attorney to represent you in court. While you have the option to represent yourself, there is a danger of overlooking critical details and facts that a lawyer would have otherwise spotted.

ERP consultants also offer a fresh set of eyes to uncover what’s causing inefficiencies in your business processes. Independent ERP consultants like Panorama, are not tied to software companies, so you’re getting unbiased and practiced advice.

ERP systems are indispensable in achieving significant business growth and product differentiation. The right time to invest in an updated ERP system is probably now, because there will never be a good time.

The Cost of Delays with System Enhancements

The Cost of Delays with System Enhancements

An Enterprise Resource Planning (ERP) system is an enormous boost to the productivity and profitability of any business at any scale. It manages sensitive data, increases organizational transparency, and streamlines the business process, thus effectively reducing lead time and operational costs. Simply having an ERP system, though, is not always enough.

A dated system could stunt business growth, jeopardizing the productivity and profitability of your business. An enhancement, then, is a sensible next step for your organization.

Systems That Fall Behind Could Slow You Down

Let’s say you have a perfectly working ERP solution that helps your workforce get the job done efficiently. It doesn’t show any signs of slowing down, you think, and so you decide that it can skip an upgrade and save your business some capital, but you overlook the fact that while the software isn’t slowing down, there are software upgrades that can speed up your business process.

That’s not to mention the fact that pushing back the necessary upgrade would just make the costs pile up. Technology will continue to evolve, and compatibility will become an issue.

The longer you delay a system enhancement, the more your current system will miss out on lucrative opportunities. It will hamper your business’s efficiency and affect its projected return on investment (ROI) in the long run.

Generating Redundant Data

All businesses start small; it’s only a matter of time and effort before you reach your full potential and expand. Nevertheless, many small-but-growing businesses are hesitant to upgrade—or implement, even—ERP software because they started and got used to transacting and tracking data without it.

As your business grows, the data you handle grows alongside it. You will face challenges regarding unstructured data, which your ERP system has no control over. Your organization will also struggle with structured data, which the system processes. Without meticulous data management, your organization will have to deal with duplicate data.

Duplicate or redundant data will take up space in your system, slowing down processes. In time, this will affect your business’s competitive edge. A software upgrade can prevent this outcome.

When you have a system that seamlessly integrates the different aspects of recordkeeping and data processing, from sales to inventory, it gives your business an edge. It enables your workforce to dedicate their efforts to actions that drive tangible results rather than on trying to keep sensitive company data up-to-date.

If you are on the fence about upgrading the system, think of it this way: the outdated technology may just be the only thing hindering your business from generating better profit. The upgrade could process data more efficiently, giving you a better business outlook.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Getting Behind Schedule

You can check whether your ERP system is performing well through a series of key business metrics. Data and inventory accuracy is one way of determining the system’s functionality.

On the other hand, the complete and on-time delivery of reports is a measurable way of determining your business’s general performance.

An ERP system acts like a live diary that takes note of the different operational aspects of your business, gathering information you can use to improve the business process.

A dated system might have some difficulties keeping up with your growing business demands. It might have difficulty processing information if it does not support existing technology or is not compatible with other systems. As such, it could set back operations and affect your overall schedule.

Delaying system enhancements will prevent your current system from operating to its maximum capability. It just deprives your system from features that can speed up the process and potentially get you ahead of schedule.

Don’t worry about enhancements terminating jobs in your company—people still need to operate them, after all.

Know When Your System Needs an Update

When did you last have an ERP system update? This step does not refer to the occasional patching up of glitches with the system. Rather, it refers to the actual enhancement of features that unleash an entirely different level of productivity from the software.

Consider investing in new software features if your system is struggling with next-generation technology and related systems. You might just be wasting time on irrelevant data, limited access, and stalled growth if the system is not in line with external technologies that it works hand-in-hand with.

You can also consider updating your system if low productivity is evident among your employees.

They could be spending more than necessary time on trying to operate the system, access stored data, or verify whether the operational process is efficient. These factors could distract them from drawing up on implementing strategies for your business’s overall profitability.

ERP does not have an expiration date, but system lags and glitches are enough to tell you when you seriously need system enhancements. It will improve productivity by providing easier access to accurate data, increase organizational transparency, and reducing lead time.

It could even reduce your company’s spending on the business process and related operations.

Delaying System Enhancement Stifles Productivity and Profitability

ERP system enhancement is one way of allowing your business to grow without expanding your workforce. It improves the way your company processes data and takes on repetitive yet necessary backroom tasks, even with heavy workload. This is because developers, who are aware that many businesses rely on such software, build up on existing features to handle greater tasks in a more efficient manner.

You no longer have to add people to the company to take care of crucial yet mundane tasks that your ever-growing business requires.

The system can handle it.

As such, current employees who are already well-versed with the ins and outs of your business can focus on expanding profitability and generating higher ROI. Their enhanced productivity, then, enables your business to remain competitive in the market.

Outdated software could make your business fall behind—don’t wait for this to happen. If you want to find out why investing in an ERP system enhancement is particularly beneficial for your business, take advantage of our obligation-free consultation and talk to us today.

5 Tips When Transitioning from ERP Selection to ERP Implementation

5 Tips When Transitioning from ERP Selection to ERP Implementation

It’s easy to get pumped once you’ve selected new ERP software as part of your organization’s digital transformation effort. Typically, the team is ready to move on from that old system and hopefully excited about the possibilities that modern technology can bring.

But too often, organizations rush from phase to phase without a concrete plan. They don’t realize that the transition from selection into implementation is arguably the most important part of their entire project. More than any other stage of your project, this phase will determine whether your plan is successful, your budget is realistic, and your business benefits are attainable.

So instead of jumping in, spending a ton of cash up front, then having the meter start running on expensive technical software consultants, it’s important to have a smooth and thought out transition from selection into implementation. Here are five things that you must do during this critical stage to make your project successful:

1. Define a Clear Program Plan

Software vendors/consultants are generally good at installing and configuring software, but they generally aren’t as good at all the other key components required for your project to be successful. For example, organizational change, business process reengineering, data migration, and user acceptance testing are areas commonly not addressed by software consultants, so your overarching project plan needs to fill these gaps. Think of the proposed timeline provided by your software consultants as just one input that you will modify and add to, as part of your overall program plan.

2. Assemble Your Internal and External Project Team

You should spend considerable time defining and assembling the resources that will support your project implementation. This should be done well in advance of software consultants arriving and the billing clock ticking. You will want to make sure that you have a team with documented roles and responsibilities, including a project manager, core team, subject matter experts, and executive steering committee. You will also want to verify your needs and thought process with an independent ERP consultant. This is to avoid being beholden to simply accepting resources that your vendor or software consultants might recommend.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Define Project Governance and Controls

ERP implementations go sideways quickly if not managed tightly, so it is important to have very clear project governance and controls in place. You will want to take the time to define how decisions are made, who approves customization, how scope requests are managed, what to do when the software doesn’t exactly fit your needs, and a host of critical decisions that can make or break a project mid-stream. This is a very commonly overlooked and misunderstood need, so enlist independent ERP consultants (such as Panorama) to help define this governance and scrutinize this framework (based on best practices from other organizations and other ERP projects). Companies on average make major system changes every ten years or longer, so don’t feel guilty about calling in independent thinkers who do these ERP projects daily for a living. To use a sports analogy, if you’re not practiced, skilled, and in tip top shape, you’re probably not expecting to enter the football game as the quarterback.

4. Engage in Business Process Management

Software vendors may say that software will drive your business process improvements, but that is a myth. You and your employees will drive business process improvements – not your new ERP software. Yes, the software will tell you how exactly business transactions will occur, but only you and your team can define how you would like your business to operate in its future state. Plus, ERP software is too flexible to provide one answer to any given process, so you will need to define your business processes preferred modus early on, otherwise, you will be paying for expensive technical consultants to sit and wait while your team is trying to decide how your business should run. This is an area where a company like Panorama can help as well. I always encourage companies to be able to confidently explain what their competitive advantages are, and how their processes support future growth.

5. Develop an Organizational Change Management Plan

Organizational change management is the #1 cause of ERP failure, so it is important to have a clear strategy and plan in place before your implementation begins in earnest. Be sure to define the change impacts as part of step #4 above, which will provide the foundation for the overarching organizational change strategy. I have yet to meet a CIO, CFO, or IT Manager who said they wish they would have spent less time on organizational management activities. Err on the side of doing too much here, and we can give you some creative ideas of how.

Bottom line: you are in control of your ERP and digital transformation endeavors, so be sure to manage accordingly. You own the project, so deploy the best internal and external resources you can. Don’t be rushed to prematurely start the project before you are prepared, and don’t hesitate to call a time out if it doesn’t feel right. This is a big decision and a risky project with a lot at stake, so it’s important to control the quality as well as the tempo of the project early on.

Lessons from the Golf Course for a Successful ERP Implementation

Lessons from the Golf Course for a Successful ERP Implementation

Many of our C-level clients are golf addicts. What they often don’t realize, is just how much golf might be teaching them about a successful ERP implementation. Though they may sound unrelated – or a far-reaching attempt to create excuses to spend less time in the office and more time on the golf course – the sport does have a lot in common with ERP software initiatives. They are complex, they could be highly frustrating and they both require a great deal of practice to get successful results.

So, while you’re playing 18 throughout the summer months, keep these similarities in mind:

1. Success Requires a Diverse Set of Skills

One of the most challenging parts of golf is how many different skills are required to be a successful player. You must be able to tee off well, make fairways shots, chip, putt, find ways to get out of the sand, and read the speed of the greens – and it’s very difficult to be good at all of those things at the same time. Similarly, ERP implementations require you to be a strong visionary, a good project manager, someone who understands the nuances of organizational change, and an improver of business processes. These are very diverse, yet very important, skill-sets needed to make your initiative successful.

2. ERP Implementations Can be Frustrating

Just when you think you have it all figured out, bad habits or problems creep in to ruin your game. You finally start chipping well, but your long game falls apart. It’s like playing the old whack-a-mole game from arcades back in the day: new challenges and problems keep popping up. The same is true for ERP implementations. Just when you start to get comfortable with the technical aspects of your digital transformation, your business process hiccups or organizational change issues start to creep up on you. This can be frustrating, especially when you are not able to practice every day.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

3. Practice and Repetition are the Key

It’s impossible to be good at either golf or ERP software initiatives without a lot of practice. Unfortunately, most don’t have the time or focus to practice these things as much as required to master the game. The average CIO is lucky to golf once a week and go through an ERP implementation once every 10 years or so. Neither is enough to put you in a position to join the PGA tour or make the list of top 10 ERP implementations of the year. So, just as you need to relentlessly practice your golf swing to get it right, you also need to practice the methodology of an ERP implementation until you’ve perfected it. If you haven’t done this yet, then be sure to hire proven experts that can fill in that need for you.

4. Both are Games of Inches

Having your club face off by just one degree or missing the hole by just a few inches can be the difference between par versus a double bogey. It applies for ERP implementations as well: if you underinvest in something critical like project governance or organizational change, your project can still fail – despite having done everything else masterfully. Precision is extremely important in both games.

5. Things Can Go Off the Rails Quickly if You’re Not Careful

The average game of 18 holes takes three to four hours, and a lot can go wrong in that time if you lose focus or get sloppy. ERP implementations last an average of 18 months, which is a long time to stay focused, disciplined, and deliberate in your efforts. To be successful, it’s important to not let up or take your eye off best practices and your desired end state.

Don’t feel guilty the next time you break away from the office to sneak in 9 holes, instead, think about these important lessons that you can take directly from the golf course to apply to your ERP project.

Why is Business Process Management Such a Big Deal?

Why is Business Process Management Such a Big Deal?

The first thing I ask when I meet a client is “what’s happening in your organization?” 99% of the time the answer is “we are looking at what we do and how we do it, and we have figured out that our technology isn’t supporting our business.”

As I constantly approach all types of organizations, these are the three typical scenarios I usually find:

  1. A young organization that started with Excel and QuickBooks, maybe some software associated with a piece of equipment they bought, more likely they outsourced to ADP for human resources, and now they’re ready for a more sophisticated integrated solution.
  2. An established organization that implemented an ERP system 20 years ago, and it was a great fit back then but in the intervening years they have grown, changed, and customized processes; often they have woven a web of support processes and technology that has turned into a cocoon. Now they cannot make upgrades to the system functionalities and they are looking to get up to date.
  3. A larger organization that perhaps has grown through mergers and acquisitions and now has multiple locations, multiple business units – all with their own systems – sometimes they have even the same software but a different instance, or are using it in a different way and they are looking to be a single company with a single consistent solution.

The unifying thread for all of these examples is that there is a need to follow the data, from vendors to the end customer, and across all functional areas. The ability to make good decisions that are enabled by visibility into the data is the number one benefit our clients are looking for.  Well, that data is following a stream of business processes. Certain business processes can be the secret sauce that makes your organization different from others and keeps you competitive, or they can be the weight that drags you down and kills your efficiency, profitability, and ability to grow.

Every time we assess an organization, the first thing we do is looking at your current state. We use this as a tool to define the requirements of a new system and to define the “as is” and then look forward to a future state – the “to be”. We identify the pain points in your current processes and what is their cost, in order to set a foundation for measuring the return on investment for the ERP initiative. The goal is to improve efficiency.  Typically, we find that solving those pain points comes down to either an organizational issue (communications, organizational structure etc..), business process, or in some cases, a strictly technical issue, such as the ability for a system to handle a certain level of transactions per second.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

From a process standpoint, we find that it’s generally one of these three situations among organizations:

  • Manual processes: having to work between multiple applications or systems, download information from one and manually enter it into another.
  • Duplicate processes: having to handle the same information in different ways because they have multiple systems, managers or business units with different requests.
  • Legacy process: we have always done it this way.

Identifying the challenges of an organization is the logical step to improve their processes. It doesn’t always require new technology – sometimes it can be as simple as physical processes – for example, one of our clients was a food company, during the process of mapping their current state we found out that they were pulling materials they used most often from the back of their warehouse, while materials they used rarely were up front. Simply by swapping out the location of their inventory, we were able to make them more productive and efficient.

The question that often comes up is “why wouldn’t we just adopt the processes defined by the software?  That must be a best practice, right?

We have a global ERP study that we’ve been sending out for almost a decade. What we have found over time is that the success or failure of an ERP implementation most often comes down to people and process. Think of it this way: business process is the DNA of an organization, it’s what differentiates you from other companies. It may be that adopting out of the box functionality will work for you, or it could be that it will make you lose your competitive advantage. But if it turns out that it would make sense to adopt a new practice, it will be essential to manage the change with your people. It is important to identify what is in it for them to do things in a new way, to train them well and then follow up to make sure they don’t slide back into the old ways.

If it turns out that a new software solution takes you 90% of the way but doesn’t support your business model 100%, then it’s time to invest in customization. It’s not just automating processes, it needs to involve what you do and why you do it, before getting to the “how”.  That is exactly where business process management comes into place. As you can see that there is no way to address a technology solution or digital transformation without addressing your business processes.  Investing the time to define and improve how you do what you do will make all the difference in the success of your ERP initiative.

Ten Questions Before Beginning Your Digital Transformation

Ten Questions Before Beginning Your Digital Transformation

I understand the situation you’re in: your ERP software and other enterprise technologies are dated, your employees aren’t as efficient as they could be, and you want to fix the problem ASAP.

Even though you might want to rush to select and implement a new technology, you need to build the foundation for your digital transformation initiative first. This means having a solid strategy, plan, and tactics that align with your overall business strategy. Answering these ten questions before you start, will help ensure that your project is headed in the right direction.

1. What is Your Overarching Business Strategy?

Many of our clients start off their projects by saying that they have no choice but to change their technology, but this alone isn’t a good enough reason. You should define what your higher-level business strategy is, so you can define how enterprise technology and business process improvements will support it.

2. How Will Your IT Strategy Support Your Business Strategy?

Assuming you have a clearly defined business strategy, you will want to define a three- to five-year IT strategy and roadmap to ensure that your technology initiatives are aligned with the company. You may not yet know which specific technologies will be required – or how much time or money they will consume – but you should define high-level estimates based on experience and benchmarks. (See our 2017 ERP Report for examples of such benchmarks).

3. How Ready is Your Organization for Change?

Although it may sound like a premature and rhetorical question to ask, it is an important one. Organizational change management – arguably the most important part of any digital transformation initiative – should begin during the evaluation and selection stage of your project. The first step is to conduct an organizational readiness assessment to answer this important question.

4. Which Business Processes Provide Your Competitive Advantage?

Not all business processes are created equal, so it is important to manage improvements accordingly. Focus your time and effort on preserving those that are unique to you, and don’t let any software decisions water down these core competencies. Similarly, ensure that you focus more time on these areas during your software evaluation process.

5. How Willing are You to Change Your Business Processes?

Or, to rephrase: how willing is your entire company to change its business processes? You and the project team may be more than willing, but this doesn’t matter if the rest of the organization resists changing or somehow reverts to old, less efficient processes. Ensure that you have a realistic read on this potential organizational change challenge.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

6. How Much Software Customization are You Willing to Tolerate?

Many executives I speak with, are convinced that they will implement zero customization. However, this is unrealistic at best. Most organizations (91% to be exact) customize their software during implementation simply because they want to preserve their competitive advantage (see point #4 above). But, since too much customization can be a bad thing, ensure that you have an aggressive – yet realistic – stance on how you will address potential software customizations.

7. Are You Looking for a Single ERP System or a Best of Breed Solution?

A one-size-fits-all ERP software isn’t the best solution for everyone, nor is a best of breed solution. Different companies have different solutions appropriate for their needs. Ensure that your IT strategy defines which direction you’re leaning so that your software evaluation process is focused and doesn’t veer off track.

8. Who Will be on the Project Team?

If you haven’t already, you should define who will fill the various roles on your team. This includes your internal project manager, project core team, subject matter experts, and executive steering committee, as well as your outside consulting resources. Ideally, this team will remain intact from the evaluation stage of the project through implementation.

9. What Will be Your Communications Strategy?

It may be obvious to you and those close to you why this initiative is so important to the success of your organization and how it will impact people’s jobs. However, this isn’t true for most of your employees. Your communication plan should be defined early on to ensure that you are communicating early and often. As I always tell our clients: it’s never too early to begin defining and implementing your organizational change strategy.

10. What Will be Your Project Governance Strategy?

Digital transformations are chocked full of hairy decisions that won’t always garner unanimous agreement. However, someone needs to ultimately make these tough decisions, so make sure you have clearly defined your project governance strategy early in your project.

You may not have all the answers to these questions, but you should take the time to define them as part of your overall IT strategy. Contact us to learn how we can help.

The One Thing Missing from Your ERP Implementation

The One Thing Missing from Your ERP Implementation

There are some universal best practices that make ERP implementations and digital transformation initiatives successful.

Successful initiatives dedicate resources and time to organizational change management. They make sure to get business process management right. They have strong project management and they have realistic expectations to ensure their projects have a chance to succeed.

Although we’ve written a great deal about these and other best practices, there is one best practice that is perhaps the most important: alignment.

When I say alignment, I mean ensuring that every strategy, plan and tactic must be in sync with one another. Most ERP failures are caused by misalignment among the various decisions that need to be made. Those that are successful are well aligned.

For example, some executives claim that they want zero customization with their new ERP software. However, they fail to recognize that this puts even more pressure on the need for organizational change management to ensure that employees adopt the new software. This is a prime example of a project that is misaligned.

There are several areas that you want to make sure are well-aligned within your project. Here are just a few of them:

Overall Corporate Strategy

Many CIOs and IT Managers fail to ensure that their projects are aligned with their overarching corporate strategies. This can be a fatal mistake, as it will almost guarantee that executives won’t be in sync with the overall initiative, and the new software initiative won’t support the longer-term goals of the organization.

Executive Alignment

Just as the corporate strategy needs to be well-aligned with the technology initiative, individual executives need to be on the same page and aligned amongst one another. A new ERP system or technology initiative isn’t going to fix any misalignments here, so not addressing this area will destine your project to failure.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Project Strategy

Your overall project and deployment strategy needs to be in sync. If you are a risk-adverse company that has a history of not accepting change well, then a big bang approach may not be well-aligned with your overall culture. Every aspect of your project strategy and plan should be perfectly aligned with your company’s culture, risk tolerance, people and other key areas.

Organizational Change Management Plan

Organizational change management is important to every single project, but it should not entail a one-size-fits-all approach. If your company struggles with interdepartmental communication, then your change plan should focus on improving this issue. If your project entails a high degree of change to individual employee roles and responsibilities – as most do – then you will need to make sure that you dedicate focus on change impact assessments.

Business Process Management

Business process management is a commonly underestimated critical success factor. Most executives’ instincts are to assume that software best practices will tell them how to run their companies, but this is a misnomer. And if your organization is looking to make leapfrog improvements to your operations, then you can ensure alignment by investing time and resources into business process management.

Project Resource Strategy

The way you assign and manage resources on your project should be aligned with your overall strategies. If your organization doesn’t have internal enterprise technology competencies, then you should invest in ensuring that you have outside support with the business, organizational change, and technical competencies required to make your initiative succeed.  Similarly, if you determine that this initiative is the most important one that you are undertaking now, then you should provide your resources the support they need to focus accordingly.

Ensuring that these and other aspects of your project are all aligned and in sync, is much more important than any individual decisions you might make within these categories. A well-aligned project has a much higher chance of succeeding, as it encompasses the big picture and puts focus on critical adjacencies.

How to Develop the Right ERP Strategy for your Organization

How to Develop the Right ERP Strategy for your Organization

When developing an ERP strategy, there are many factors to have into consideration depending on the type of business, the size of the organization and the purpose of the initiative. But regardless of the particular circumstances of every case, an ERP strategy must consider the following points:

  • Organizations need to realize the scope of the project and how an ERP implementation, when done properly, can affect their company. An ERP strategy is not just an IT project, it is rather a companywide initiative and getting executive sponsorship as well as sponsorship from all across functional areas will drive the success of it.
  • A successful ERP strategy has a tremendous effect on the company efficiency and revenue. Internal and external resources, project timeframes and the overall cost of the initiative are the foundations of an ERP strategy. All too often organizations underestimate what an ERP implementation is going to take from the cost perspective, the resource perspective and how long it will take causing time and costs overruns.
  • Too many companies make the mistake of not fully involving a VAR or third-party assistance such an independent consulting firm. A third-party involvement, from the strategy planning stage through the implementation, provides a comprehensive vision and helps to maintain the project on-track.
  • Companies can achieve higher benefit realization by truly emphasizing areas for improvement early on, benefit realization is a living and breathing entity and should be addressed during weekly or monthly company meetings. If goals and metrics are not clearly set from the beginning, they will not be attained.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

We had a recent apparel manufacturer client that went through a full ERP software implementation process.  At a high-level, they had the goal to grow with technology and limit FTE expansion. Every time they felt they needed new employees they went through exercises to see if technology was a better answer.

The company set realistic goals of process definition, software selection, process improvement and organizational change management. This plan was a companywide plan and whenever they had turmoil within the industry or a change at the management or C-level, they always went back to the plan as the foundation. It was a two-year implementation but they accomplished it within budget and timeframes because of realistic expectations set from resources who had the expertise and were able to define the right ERP strategy for the company.

Schedule a Free 30-minute Consultation With an ERP Software Selection Expert!

Why are organizations afraid of getting into an ERP project?

Why are organizations afraid of getting into an ERP project?

It can take anywhere from 9 months to 5 years to select and implement ERP systems based on the size and complexity of an organization.  Knowing that, it is amazing to me that so many companies wait until the very last minute – or past it, until they are really hurting before they come to us. There are many reasons why some organizations put off their ERP initiatives, in my years working for an independent consulting firm I have heard all kind of excuses to delay an ERP project, here are some of the most common ones:

The first reason is that ERP implementations are “hard”.  I’ve met plenty of IT Directors and CIOs that have prematurely gray hair and a twitch from previous ERP initiatives.  The news is filled with nightmare stories of litigation for millions of dollars over failed ERP implementations.  In fact, we have clients that insist on extreme discretion because they can lose preferential status as a vendor if word gets out that they are undertaking an ERP initiative.

Companies also worry about the impact on their people.  Early in my career, I worked for a Fortune 100 company that moved from completely paper-based operations to an ERP system.  My regional center experienced about an 85% reduction in force – it was bizarre moving from 6 floors bustling with people down to one.  The reality is that after 30 years, most companies are already using technology in some form or fashion, so massive layoffs are simply not as common.  Instead, implementing technology can not only ease workloads by improving efficiency and productivity but can also be an opportunity to expand and enrich job roles.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

The biggest reason, of course, is the cost – not just the money, but the time and energy required of internal resources.  Selecting, purchasing, and implementing a new ERP system is a huge capex investment, meant to last at least a decade.  As I’ve said before, if you make a mistake, it’s going to have long term repercussions so it is in everyone’s best interest to scope the project right from the beginning and avoiding the additional costs of a troubled implementation.

So how can leaders get the confidence to jump in? Consider that ERP initiatives are an opportunity to get past the pain caused by the limitations of your current system.  The new ERP solutions enable not only improved efficiency and productivity, but better decision making through cross functional visibility, mobility, B2B and B2C.

Panorama’s philosophy is that ERP initiatives are not only IT projects, but business transformations, because ERP systems touch every aspect of an organization. We’ve found through our experience and via global surveys, that it is a focus on PEOPLE and PROCESS that makes the difference between failure and success.  There is no time like the present to use an ERP project to address your people, process, and technology, and take your company to the next level.

The Do It Yourself Digital Transformation Project: Beware of These Ten Pitfalls

The Do It Yourself Digital Transformation Project: Beware of These Ten Pitfalls

Managing your own digital transformation or ERP software initiative can be a tempting idea. However, the concept rarely works and is riddled with potential failure points.

If you’re a new CIO, the thought of taking the bull by the horns and being a one-man transformation machine can be particularly alluring, but it is very important to avoid these ten pitfalls:

1. Backing Yourself Into a Corner with a Single ERP Software

Gone are the days of single ERP software solutions to automate your business. Best-of-breed and integrated point solutions used to be considered blasphemy in the enterprise technology space, but technology is too mature, flexible, and integrated to be limited to a single enterprise software vendor or solution.

2. Not Fully Understanding Options in the Marketplace

Just as you don’t want to limit yourself to one enterprise software solution, you also want to make sure to consider the full plethora of options in the market. SAP and Oracle built their successes in the 1990s and early 2000s by developing the only solutions that could scale for larger organizations, but those days are long gone. There are plenty of options available to larger and more complex organizations.

3. Taking Your Software Vendor’s Proposal at Face Value

Software sales reps are hired to sell software, not manage to realistic expectations. They also don’t have a complete understanding of all the activities required to make your initiative successful outside the installation of their software, so it is important to take their proposals with a grain of salt.

4. Rushing the Project and Minimizing Costs

It may seem counterintuitive, but minimizing time and cost can, in fact, hurt your project and organization more than it can help. Fast and cheap doesn’t necessarily equal doing it right, so be sure you aren’t stepping over dollars to pick up pennies. Start with a realistic implementation plan and budget, and be sure to take your time to do it right.

5. Relying on the Software to Drive Your Business Process Improvements

We all wish there was software out there to tell us how to better run our businesses, but the reality is that today’s software is too flexible to leverage it to define your business processes. Spending time defining your business processes early in your evaluation or selection will save you considerable time and money later in the project.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

6. Failing to Effectively Manage Change Within Your Workforce

It doesn’t matter that your people are “ready for change” and “tired of that old system that we use today”. Change is difficult once you dig into the details. Be sure to invest the resources in managing change and transitioning your team to the new business processes, organizational roles and responsibilities and training required to make your initiative successful. Take the time to develop and execute and effective organizational change management strategy and plan.

7. Not Assembling an Ace Team of Great Project Team Members

No CIO can single-handedly make a project succeed, even if they have past implementation experience. Instead, leverage the support of a great project team built from people within your IT group, and more importantly, from business operations.

8. Overlooking the Need for Executive Support and Buy-In

It doesn’t matter how good you are, your project will not succeed if your executive team isn’t fully on board and supportive of the project. This includes ensuring that your executive team not only approves the project budget but also helps make key decisions regarding the business.

9. Failing to Leverage Technology Agnostic, Independent Digital Transformation Consultants

There is no surrogate for independent ERP software and digital transformation consultants. These fresh sets of eyes, objectivity, and lack of ties to any one software vendor will ensure that you select and implement the right system or systems for your organization.

10. Staking Your Career on This Single Transformation

It’s a shame: too many CIOs and executives are fired over ERP implementation failures. Don’t be one of those statistics. Instead, make sure you leverage the right help and avoid the other nine pitfalls to ensure that your project is successful and that your career thrives.

Digital transformations can be difficult, but avoiding the above pitfalls will ensure that you have a better chance of success.

How to Prepare for Your Digital Transformation Initiative This Summer

How to Prepare for Your Digital Transformation Initiative This Summer

There is never a good time to start your digital transformation initiative. Especially this time of year, key team members are on vacation, which can make difficult starting a new project and gain the necessary buy-in. There are a million reasons why the summer months may not seem like a good time to start a digital transformation project, but there are probably just as many reasons and ways that you should, in fact, take the time to start such an initiative now.

Here are a few tips and ways to get your project off the ground this summer:

Start Building Your Project at the Grassroots Level

Many CIOs, CFOs, and IT Managers feel that their only option is to decide between starting a formal evaluation and selection process – or not starting at all. However, the decision is not quite this binary. You can start by mapping out your current business processes, defining your high-level future state and building a business case for how new enterprise technology might help improve your business operations and financial results. You can also conduct an organizational readiness assessment to determine how big of a change a new initiative would entail. If you spend the summer doing things like these, you will hit the ground running when the team is back to full strength to discuss a more formal evaluation and selection process.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Define an Overarching IT Strategy

Many enterprise and ERP software selection processes wander aimlessly with no direction. They take a “throwing spaghetti to see what sticks” approach to evaluating potential software solutions, which is not considered best practice. Instead of starting an enterprise software project with no clear sense of direction, it is helpful to first define an overarching enterprise, IT, and digital transformation strategy. This will help define the goals of your project, potential software options and a high-level, long-term plan among other things. This ensures that your team is grounded and headed in the same direction once you are ready to start a more formal evaluation, selection and implementation process.

Get Your Ducks in a Row

Your selection and implementation process will go a lot smoother if you have a strong foundation to start from. In addition to defining a clear IT strategy (as mentioned above), you may also want to begin defining your business processes and requirements. This will provide a launching point for your team to begin a more formal evaluation process once the team is back together. Business process management itself involves many decisions and can take quite some time, so this can help build some momentum while you’re awaiting approval for a more “official” evaluation project.

Hire Independent Digital Transformation Consultants to Help Get You Started

The entire process can be overwhelming, so don’t be afraid to enlist the help and support of independent digital transformation consultants like Panorama Consulting. Such outside and technology-agnostic expertise can help give you direction and confidence to build a strong foundation to start your evaluation process from. They can also help you prioritize and focus your efforts so that you are honing in on the business processes and technologies that are most likely to improve your business.

Summer may be a time of relaxation, vacations, and family time, but it is also a great opportunity to build a foundation and momentum for a third quarter digital transformation or ERP software initiative. How will you spend your summer preparing for the back half of the year?

Lessons From Digital Enterprise Boot Camp

Lessons From Digital Enterprise Boot Camp

Last week, we hosted our most recent Digital Enterprise Boot Camp in Chicago. This three-day training event was a good way for us to collaborate with some of the world’s leading CIOs and digital transformation project teams, and the event provided some good takeaways for those about to embark on a related initiative in the coming months.

The event was attended by thought leaders from as close as Chicago to as far as Singapore. Here are some of the key takeaways:

Pivoting from a Traditional ERP Software Mentality to a Digital Transformation is Easier Said Than Done

CIOs and others in the IT profession have developed a lot of bad habits over the last 30 years of enterprise software initiatives, so embracing different approaches can be a difficult proposition. Traditional waterfall development approaches, big ERP software, myopic focus on technology and limiting your options to the same Tier I ERP vendors are examples of things that may have worked in the past, but aren’t always the best answer in today’s age. These tectonic shifts in thinking can be easier said than done.

The Sooner You Incorporate Best Practices Into Your Digital Transformation Initiative, the Better

The earlier you embed proven tools and methods into your digital transformation, the faster, cheaper and more effectively you will implement your process and system changes. If you wait too long, it is going to cost you a lot more time, money, risk and diluted business benefits, so it is important to take your time to ensure you have things well-defined up front. Even if it means slowing down the initial stages of your project to ensure you have a solid strategy in place, this will be time and money well-spent that will deliver exponential savings later.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Organizational Change Management Does Not Have to be Vague and Undefined

It is very common for CIOs, other IT professionals and executives to have a shaky understanding of organizational change management. Some go so far as to despise the word because it doesn’t mean anything to them. This is all understandable since so many consultants and other industry leaders don’t understand the concept. However, it isn’t rocket science and doesn’t need to be a purely “touchy feely” term – it’s simply a matter of applying some basic methodologies and frameworks to ensure that you are adequately addressing the people side of your initiative.

Business Process Management is a Key to Digital Transformation

Your desired business processes should drive a majority of your technology decisions – not the other way around. Time and resources spent clearly mapping out your reengineered business processes will provide a strong foundation for your evaluation, selection and implementation of new enterprise technologies. And don’t fall for the misguided, vendor-driven adage that technology will drive your new business processes because it won’t. Today’s technology is too flexible to assume that any one technology contains silver bullets that will define your processes for you.

Ensure you approach your digital transformation with independence and objectivity. Ask an ERP software vendor which system or systems should enable a digital transformation, and they will generally say that their suite of products should drive those changes. However, gone are the days of single, big ERP systems. Best-of-breed and “best of” technologies are much more viable now than they were in the past, so it is important not to limit your options. This is why it is so important to hire independent digital transformation consultants to help guide you through the journey (feel free to contact us for help!).

Four Reasons to Ditch Your ERP Project

Four Reasons to Ditch Your ERP Project

The other day, I was reading an article about how business investments increased by roughly 10% last quarter, which is the biggest increase in several years. This increase in spending means organizations are investing more in essentials like factories, equipment and ERP software.

While it’s good that businesses are more confident and willing to spend, it also poses a potential red flag: companies forging ahead with an ERP implementation without a clear plan or consideration of all possible alternatives.

Our 2017 ERP Report, published last month, shows that organizations continue to struggle with implementation cost, duration and benefits realization – suggesting that companies are still failing to be strategic and diligent in their digital transformation efforts. If anything, businesses need to take a step back, take a deep breath and think before moving forward with their initiatives. So, if you are considering an ERP project, here are four reasons why you might want to consider ditching that idea:

1. Your Business Processes May be the Real Source of Your Problems

Too often, organizations assume that new ERP software will solve their operational challenges and inefficiencies. While software can certainly help drive efficiency gains, chances are that you can make big improvements by simply reengineering your business processes. Don’t fall for the myth that processes can’t be reengineered until you know which software you’re going to use in the long-term. In my experience, over half of business process improvements can be made without implementing new software – and those improvements can be implemented at a fraction of the cost and risk.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

2. Your Organizational Design May be Another Source of Problems

This is another way that ERP software can muddy the waters of your business transformation efforts. Without ERP, you still have opportunities to improve your organizational roles, responsibilities and structure. Many companies use their ERP implementations as a mechanism to drive organizational improvements such as standardizing operations, but the technology implementation muddies the waters of the real organizational change management work to be done. By defining and implementing your future state processes first, your ERP implementation will be much smoother.

3. There are too Many Good Alternatives to Traditional, Monolithic ERP Systems

I’m surprised at how many CIOs are still stuck in the 1990s mode of “we need a single, big ERP system” -mentality. This worked back in the day when options were limited, but there are far too many options in the market to limit yourself to high cost, high risk or inflexible options. Best-of-breed digital transformations leveraging the software of multiple vendors no longer have a stigma attached to them. This is why an objective view of your options (read: not from a software vendor or consultant who is peddling a suite of products from one vendor) is so important to understanding your range of options.

4. A Technology-Agnostic Enterprise and Digital Transformation Strategy Should be Your First Step Forward

A technology-agnostic and independent strategy should be your first step to deciding on new technology. Not only do you want an objective view of your options, but you want to make sure that the systems you evaluate, select and implement fit into an overarching strategy – not some sort of “shoot first, aim later” big ERP strategy. The costs and risks are simply too high to be gun-slinging your path forward.

While some organizations will still find that single ERP software is the best option for their needs, these decisions should not be based on coincidence or luck. There is a lot at stake – including your job security – so it’s important to leverage the help of independent digital transformation consultants in defining your best path forward.

How to Avoid ERP Drama: Turning a Tragedy Into a Grand Adventure

How to Avoid ERP Drama: Turning a Tragedy Into a Grand Adventure

Breach of contract. Fraud. Operational Delays. Drama. None of these are words an organization wants to hear in the midst of their digital transformation. Unfortunately, organizations often find fault with their ERP vendor, value-added reseller or consultant. The reverse situation – a vendor filing suit against a client – is also common. In this blog, we hope to provide a unique perspective on the causes of ERP failure and lawsuits. We also will provide some wizardly advice should you find yourself walking the same path.

“I think there’s more to this Hobbit than meets the eye.”

– Gandalf

According to our 2016 ERP Report, about seven-percent of organizations experience ERP failure and another 36-percent are unsure if their project was a success or failure. The report finds no meaningful correlation between ERP vendor selected and rate of failure. However, there was a correlation between failure rate and lack of project planning, misaligned expectations and inadequate focus on business process reengineering and organizational change management.

How to Write a Tragedy

There’s quite a few ways that organizations can ensure ERP failure:

Not Investing Enough Time in ERP Software Selection

If you select enterprise software that is a mismatch for your organization, it’s going to make success difficult.

Not Reading or Understanding Contracts with ERP Vendors

If you don’t understand what you’re getting yourself into, you might overlook the importance of planning, especially when it comes to resources and staffing.

SAP vs. Oracle Case Study

SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.

Not Defining Business Requirements and Workflows

You can’t rely on the software to define your business processes. Define your current and future state processes first so you can maintain your organization’s competitive advantage and maximize benefits realization.

Too Much Customization

If you over-customize your ERP system, you may incur unexpected costs in the form of maintenance and upgrades.

Poor Organizational Change Management

If your project plan doesn’t include specifics on communication, training and organizational readiness, it’s never too late to revise it.

Lack of Executive Sponsorship

If you’re not reviewing your project with executives on at least a bi-monthly basis, your initiative may begin to suffer from a lack of vision as well as end-user resistance.

How to Re-Write a Tragedy

Many ERP failures regain traction well before organizations have a chance to consider litigation; and most ERP lawsuits end up settling well before the trial date. But, since ERP Expert Witness work is somewhat of an interesting adventure, here’s a quick anecdote from our past experience:

One day, an organization felt that their implementation partner didn’t deliver on what was promised. The organization engaged Panorama to analyze the feasibility of a lawsuit and determine if legal action was worth pursuing. So the Expert Witness team analyzed documentation, developed reports and provided deposition and testimony. By identifying mistakes that diverted from best practices, the team assigned fault to the implementation partner, and the organization recovered thousands of dollars in consulting fees.

We hope you never need Panorama’s ERP Expert Witness Services. That’s why we are always sharing advice and best practices. If you do find yourself writing an ERP tragedy, your project is absolutely recoverable. By following the above advice, you can rewrite your story to ensure that your digital transformation reads less like a series of unfortunate events and more like a grand adventure.

“I thought up an ending for my book. ‘And he lives happily ever after, till the end of his days.’”

– Bilbo

New Year = New Business?

New Year = New Business?

About this time of the year, people start making their new year’s resolutions. We all know that local gyms will get more crowded, grocery stores will go through more fruits and veggies and people will want to “spend less and save more” – especially after the holidays. However, the business world has their own set of resolutions. With the new year comes new budgets and typically a new focus. Everyone wants to “do better” in every coming new year, but how do you know if you truly will?

The key is: plan for it.

Have you already started with your strategy plan? Post-holiday blues are real. It is hard to get refocused after the end of the year festivities. This can make starting a new project in January difficult. Do some preliminary research on ERP vendors (download our 2017 Top 10 ERP Systems Rankings Report to see how clients have ranked their vendors of choice) to find out what ones could potentially suit your organization’s needs.

Have any leftover funds from 2016? Near the end of the year, some organizations get very picky (with reason!) about what they spend their money on. Every bit counts! However, check to see if there is any money left over to allocate to your IT and operations budget—check if your fiscal year coincides with the calendar year. Also, keep in mind that you should invest in activities that will increase your odds of success so that you don’t waste money on software that doesn’t fit your business needs. Independent ERP consultants can look at your business from an outside perspective to see where you can use some help. They can recommend the right software or help with organizational change management to see if your employees are ready for a new ERP system.

Speaking of organizational change management… It is important to know that it is NEVER TOO EARLY to start organizational change management. It is a necessary in any organization—whether you decide to deep dive into an ERP implementation or not. No matter what technology you have, your employees have to run it. If they don’t get it—or don’t like it for that matter—what is the point in having it? By investing in organizational change management, your employees will get the proper training and understanding of your business and will help make it run MUCH smoother.

With the new year right around the corner, it is important to start thinking about what your professional focus will be. Make it a healthy 2017 in all of your endeavors, personal and professional alike.

Five Common Mistakes in Public Sector ERP Projects

Five Common Mistakes in Public Sector ERP Projects

Any project, ERP or otherwise, will live or die by its project planning. I recently jumped in halfway through an ERP project to find that the project plan was a chocolate mess and had to be rebooted halfway through the implementation – the project team had to scrap the old plan and engineer a completely new project plan. There were five common issues that derailed this project plan, and these mistakes are  common in every failed public sector project:

  1. Day-to-day management of the project plan
  2. Resource allocation
  3. A single point of failure
  4. Traumatic budget mismatches
  5. Last minute policy and procedural changes

Let’s dissect each of these issues and consider ways to avoid them on future projects:

The first and most time-consuming issue is the day-to-day management of the project plan. A project plan is like a pet; it needs love, attention and food every single day. Just like a pet, a project plan,  is a constant struggle that demands vigilance, even on the weekend and holidays. There are many ways that a project manager (PM) can give the project plan love and attention. My favorite technique is a daily meeting at the same time every day where the PM can take the temperature of the project. Key project resources, champions and the PM should meet for focused discussions on what must be accomplished that day. Effort can be reallocated on the spot and everyone should receive an update on the status of the project. While this takes discipline, it does not have to be time-consuming. A focused PM can hold a daily meeting, make decisions and move out in less than 30 minutes.

The second issue is proper resource allocation. It is not only important to get the right human resources for the project, but it is equally important to use them wisely. Nothing is more corrosive to a project than the “hurry up and wait” syndrome prevalent in the public sector and in particular the U.S. Department of Defense. Forcing a project team member to travel all night or on a weekend to be on a jobsite at 7 a.m. on Monday can be counterproductive if there is not a solid resource allocation plan. The real coffin nail to motivation is to have them sit on their hands while the PM figures out how to use them. “Hurry up and wait,” a favorite tactic of most U.S. airlines, does not work well with ERP implementations. It is much better to have a consistent schedule with surge periods laid out well in advance to allow project team members to mentally prepare, obtain a backfill person if necessary and plan out their personal lives.

If your project is behind, don’t make the mistake of throwing people at it to speed things up. At the beginning of a project, create a thorough plan that includes risk mitigation and contingency, and be sure to use your resources wisely. Having a plan in place will allow you to achieve higher productivity, more project buy-in and more resources who will work with you again in the future. It is also vital to plan around holidays and vacations well in advance. Giving someone Christmas Day off but working them 18 hours on December 24 and 26t is not only counterproductive but could lead to valuable resources finding a reason not to work on your project.

Single point of failure is another common issue in public sector ERP implementations. Every organization has one or two employees that do more than their fair share of work on a project. They often have a portfolio of skills that make them incredibly useful and attractive for your project, but don’t fall into the tiger trap of letting them be involved in every aspect of the project. Eventually, their Herculean efforts will fail and fail hard. They will be pressed into crazy hours on another project or will shatter like a dropped mirror. Sadness ensues and the project schedule will definitely slip while the PM and the project team picks up the pieces and looks forward to seven years of bad luck. Everyone on the project must carry their fair share of the burden. While single-point failures love the challenge and the attention of being involved in everything, do not let them take over your project and hold you hostage. A savvy PM will sit down with the single-point failure, understand their pressures and allocate reasonable time and effort commitments to them. If the single-point failure cannot give your project enough time without jeopardizing other projects, then you need to hire a new employee, contractor or consultant to help both projects succeed.

The fourth item is a mismatch in budget expectations. Most public sector PMs are under a lot of pressure to finish the project on-time and on-budget. Occasionally, issues will come up that will jeopardize the delicate balance of schedule and budget. The PM should unambiguously present the issue to the stakeholders in a decision forum, like a steering committee. The budget issue usually is resolved by slipping the schedule or cutting capabilities to minimize the impact on the budget. Another tactic is to crash the schedule and dramatically increase the budget. A recent client of ours wanted to throw people at a go-live date by working overtime and weekends, yet held the expectation that the budget would only minimally increase. I am no Warren Buffet, but these are contradictory expectations and will unfailingly lead to a demoralized project team. The PM must calmly but firmly map out the options, let leadership make a choice and force them to choose their poison: go live on a specific date with increased budget and diminished capabilities or go long and let the budget be king. The most important concept is that the decision must be owned by the client’s leadership team. Crashing the schedule, throwing people at the problem and working longer hours cannot be accomplished within the original budget.

The fifth project planning issue in the public sector is policy and/or procedure changes. I was on a recent project where the host organization let us conduct a fairly hands-off ERP implementation. Halfway through the implementation, the host organization got involved and forced several new policies and procedures on the implementation team. Several of the policy changes, particularly the process to introduce new project team members and the new decision matrix for the project, were time-consuming and caused schedule slippage in key aspects of the project. It goes without saying that all policies and procedures should be agreed upon before the start of the project. However, this sometimes cannot be avoided with some stakeholders, sponsors and organizations. In these cases, the PM should have a contingency plan for anticipated mid-project changes.. . If the client changes policies and procedures more than their underwear, a sharp PM should inform the client of the danger of mid-project changes and allocate slack time to prevent inevitable schedule slips from jeopardizing the go-live date.