We work with many clients who implement new ERP software simply because they “have to.” In my experience, this isn’t a good enough reason to move forward – not if you want your initiative to succeed and deliver a competitive and transformative advantage to your organization.
Broad goals are important for your ERP software or digital transformation initiative
On one hand, it makes sense that you may need to do something with the outdated legacy system you’ve outgrown. Perhaps the system is no longer being supported by the software vendor. Or, it could be you’ve customized the solution so much that it’s not realistic to keep using it. Or, you’ve simply outgrown the current system and can’t scale to meet your future growth objectives.
ERP software typically can do much more than simply replace your old technology. Most current software has grown leaps and bounds in overall functionality, such as in advanced planning, business intelligence, analytics, artificial intelligence and a host of other areas that can enhance your competitive advantage. However, this functionality is likely to get watered down – or worse yet, not leveraged at all if your primary goal is to simply replace your current system.
ERP implementations are difficult and often tricky to begin with. The degree of difficulty grows exponentially when you don’t have clear direction and goals for the project. Consider two projects: one with the goal of replacing an outdated legacy system and another with a mission of improving the customer experience to better compete with competitors. Which one do think is more likely to deliver a greater return on investment and fuel growth?
Focus on the bigger picture
With that in mind, it’s important to step back and define a clear vision for your ERP or digital transformation project. What exactly are you trying to accomplish? What business improvements do you expect? How will modern technology help you realize those improvements? How will your project governance align with those goals during implementation? These are just a few of the plethora of questions you’ll need to ask yourself (and your team) to succeed.
You’ll also want to clearly define the expected business benefits and improved efficiencies in great detail. Your business case should be more than just a means to justify the project; it should also provide a way to track and manage benefits going forward. Think of it as a living, breathing benefits realization plan that has significance and doesn’t sit on the shelf collecting dust after the project begins. This is one of the best ways to ensure you realize the full benefit potential and ROI of your investment.
The benefit to your ERP implementation or digital transformation
Besides longer-term benefits, a focus on bigger picture goals also ensures that your ERP implementation or digital transformation goes well. All too often, companies with a “replace the old system” mentality get lost during implementation. They don’t have clarity when making critical decisions, such as how to streamline business processes, how to define scope, whether to customize and a host of other issues. Without a clear vision of what you are trying to accomplish, you’re shooting in the dark when making these decisions.
How can you ensure that you’re focusing on gaining lasting competitive advantage as opposed to replacing an old system? The easiest way is to start during your implementation planning process. Ensure these questions are answered and integrated into your implementation strategy, project charter and overall project approach. The balance of benefits like improved workflow and integrated processes must equal better customer satisfaction. This is something that independent ERP consultants such as Panorama can help with.