It’s a constant battle: Technology vs Business. Over the last decade, both our thought leadership and our publications frequently opine the difference between ERP implementations that are business-focused versus those that are technology-focused.
Traditional ERP consultants are experts in their specific technology, typically leading them to focus on the technological aspects of an implementation – and also helping explain why failure rates have been so high over the years.
Business-focused implementations, on the other hand, are generally more successful. These types of implementations go more smoothly, organizations leverage more of the software functionality at their disposal and greater returns on investments are realized than those myopically focusing on the technological aspects of the project.
But what are the differences between technologically focused and business focused ERP implementations? Here are five differentiators between the two:
Executive support focuses on getting the job done right. We often work with client executives simply wanting to get their new ERP system up and running as quickly as possible. They put more focus on minimizing the amount of time and money invested in the project without necessarily considering the longer-term implications. Where more successful business-focused implementations focus on getting the job done right the first time and are able to find the right balance between short-term implementation costs and longer-term costs and benefits.
Business processes are well-defined up front. It can be tempting to throw out your old, inefficient business processes and look to your new ERP system to help you define how your future-state business processes should look. Despite ERP vendors selling you on their product’s capabilities, this is usually a big mistake. Companies without a clear vision of how they want their business processes to look or have a meaningful focus on business process reengineering often fall into the trap of automating those same inefficient processes. Successful companies define exactly how they want their business processes to work and how they want to preserve their sources of competitive advantage. This allows the new software to better conform to how the business should be run.
Organizational change management entails much more than basic end-user training. If you haven’t started any meaningful organizational change management until end-user training, then your project is may very well be in trouble. While end-user training is important, it is just one component of what is ultimately required to ensure your employees adapt to the new software and deliver measurable benefits to your business. More successful business-focused implementations tend to include organizational readiness assessments, change impact assessments, change discussions, communications plans and a plethora of other “people-focused” activities to help ensure your project is successful.
Testing focuses on business usage instead of technical stability. Simply getting technical configurations, customizations and integrations working can be a challenge in and of itself. But if that’s all you do, you will be left with a product that is technically sound, but can’t be used by the business. Keep in mind that most ERP consultants are functional or technical experts in their software, but they are not experts in how your business runs or how the software can best support and improve YOUR BUSINESS. However, successful project teams understand the need to focus on user acceptance testing, conference room pilots and other forms of testing the software against desired business processes and requirements.
Benefits realization is focused on real business results. Technically-focused implementation teams tend to set the bar pretty low by simply aiming for a technically sound product that is implemented on time and on budget. Business-focused teams instead focus on tangible measurable results. They set baselines, targets and plans on how to achieve expected performance improvements. Just as importantly, they tweak their business processes or systems as needed when they fall short on any business benefits. As the old saying goes: “you can’t achieve it if you don’t measure it.”
At the end of the day, ERP implementations are intended to improve business results and make your operations more successful. It is important that the focus and plan for your ERP implementation is aligned with this expectation throughout the entirety of your project.
Learn more by downloading our new eBook, An Expert’s Guide to Organizational Change Management: 10 Steps for Managing Change Resistance.