As those of us in the U.S. prepare for a long Independence Day weekend, it is a good time to reflect on the role of independence for those about to select and implement new ERP systems.
Historically, ERP implementations were an all-or-nothing proposition: you would evaluate a few options, then purchase and implement a single ERP system for the entire organization. This approach, of course, was before the advent of independent ERP consultants – a role pioneered and perfected by Panorama Consulting.
Now that times have changed, there are alternatives that can and should be considered from a technology-agnostic, independent perspective. Unless you are an industry incumbent with goals misaligned with your customers, an ERP implementation doesn’t need to take the “usual” approach. There are a number of methods for finding an enterprise strategy that is based more on your organization’s specific needs and less on what ERP vendors want to sell you.
For example, below are three alternatives that you may want to consider along with the “typical” ERP implementation scenario:
Consider best of breed ERP systems. Most of our clients begin their ERP implementations with the vision of deploying a single system across the entire organization. While this may be a means of standardizing operations across the company, it isn’t always the best option since there could be functionally-focused systems that can better address specific business needs. For example, Salesforce often provides better CRM functionality than many ERP systems, while Workday often provides better HCM functionality. In other words, choosing an ERP system doesn’t need to be an all-or-nothing proposition; it often makes sense to find a core ERP system to handle financials, inventory management and other core functions, but use bolt-ons to handle more advanced functions, such as demand planning, product configuration and project management.
Just say no to ERP software. It may sound crazy, but it can be extremely beneficial to at least consider “none of the above” as one of your ERP software scenarios. For example, what is the cost-benefit of keeping your current system and instead focusing on making improvements to your processes and configuration of the system? What about an upgrade of your existing software? Many companies we work with rush down the path of selecting a new system without fully considering lower cost, lower risk and higher benefit scenarios. Although it may seem like an absolute must that your current system be replaced, it is important to consider lower cost and lower risk options, such as business process reengineering or organizational change management improvements to your existing environment.
Watch for the technically-focused ERP implementation. When you are an ERP vendor, your primary incentive is to sell software and get your technical resources billable. When you are a company implementing ERP software, on the other hand, your incentive is to improve your business operations by whatever means necessary. Unfortunately, these two incentives are often at odds with one another throughout your ERP implementation. It is important to remember that you don’t have to purchase too many modules or licenses to start the meter on expensive technical resources right away. For example, many of our clients opt to focus on business process reengineering before they begin technical configuration, which is a more effective best practice. Whatever you do, it is important to treat your project as a business implementation instead of a technical project focused too much on the software itself.
While there is no simple, one-size-fits-all answer to how to start and move forward with an ERP implementation, these three tips will help you consider your options from a different perspective. Only by objectively and independently assessing your full spectrum of options will you find the best option that makes the most sense for your organization.