A few months ago, I wrote a blog about how effective ERP implementations are much like Subway sandwiches (read the original post here). As it turns out, I happen to be a big fan of both successful ERP implementations and Subway. Apparently, so do many of our clients, since this was one of our most popular blog entries over the last few months.
The follow-up question to that blog is this: if successful ERP implementations typically pull from Subway’s playbook on how to make sandwiches, then how can best be described? We know from the research outlined in our 2014 ERP Report that most ERP implementations take longer than expected, cost more than expected and fail to deliver expected business benefits. There are a number of ways to describe what leads to failed ERP implementations, but it can be difficult to summarize those “worst practices” in a simple way that the average layperson can understand.
With that in mind, one of the simplest ways to summarize ERP failure is to illustrate how they are different from a Subway sandwich:
1. ERP failures typically involve rushing into an ERP implementation without first defining what the business needs are. It’s awfully tempting to think that maybe – just maybe – the ERP software we are about to purchase will act as a silver bullet to help us facilitate our business process reengineering efforts. I get it. Having been through the ERP implementation process hundreds of times, however, I can say with confidence: “don’t do it.” How successful do you think your lunch would be if you were to walk into Subway and tell them to just give you whatever they felt like making for you? Similarly, today’s ERP systems are far too flexible to assume that they will provide clear direction on how your business processes should function, and companies that fall into this trap typically end up simply automating their existing business processes rather than clearly defining a new way of doing business. For this reason, some of Panorama’s most successful ERP initiatives have been the ones where we have spent time helping the client reengineer their business processes – long before they’ve even begun evaluating potential ERP systems.
2. Challenged ERP implementations typically put too much stock in ERP software “best practices.” You may be saying to yourself, “But you haven’t considered the fact that many ERP vendors have baked ERP best practices into their ERP systems.” This is another common misconception that is an unintended key contributor to ERP failures. This would be the equivalent of walking into your nearest Subway and asking them to make you the “best” sandwich as defined by the last 30 people to order a sandwich from that particular store. First of all, your company is surely and hopefully different from industry peers, especially as it relates to your competitive advantages, so you probably don’t want software functionality that everyone else is using. Secondly, and probably even more importantly, who is the all-knowing-definer of these so-called ERP best practices? Ask yourself whether you really want software consultants, that only know their specific functionality, to define how your business is going to run, or whether you would rather have a more technology-agnostic approach to redefining your business operations going forward. At Panorama, we typically attract clients that treat their ERP projects more as business initiatives rather than technology implementations.
3. Every ERP failure we have studied over the years severely neglected organizational change management. Yes, you read that statement correctly. In each and every single lawsuit that has retained Panorama to be the ERP expert witness in the case, we found that organizational change management was overlooked. Whether there was simply no organizational change management team in place, whether organizational change was myopically viewed as an end-user training exercise or the organizational change management consultants simply didn’t know what they were doing, each of these high-profile failures botched the “people” aspects of their implementation. Just as ordering a sandwich can be overwhelming to a person that doesn’t like making decisions, new ERP systems typically entail significant change and should be treated accordingly.
These are just a few ways that illustrate how ERP failures can differ from Subway sandwiches. To be successful, you need to be able to decide exactly what you want before ordering your sandwich, so to speak, and you also need to be prepared to address all the options you have. Successful ERP implementations may not be quite as simple as a quick lunch break, but some of these basic best practices will help ensure success.
Learn more by checking out our webinar Organizational Change Management: A Critical (and Often Overlooked) ERP Implementation Success Factor on April 24th.