We interviewed Ian Doubleday, Manager of Client Services at Panorama, to find out what it’s like to be an ERP consultant. Ian also answered some common questions about how to find a good ERP consultant for your digital transformation initiative.
[vc_video link=”https://www.youtube.com/watch?v=fCAyv6SnQ_M” el_width=”80″ align=”center”]
What makes a good ERP consultant?
This is a difficult question to answer because there are a number of factors that become important depending on the nature of your project. A few that come to mind include industry experience, cultural fit, professionalism and integrity. A good ERP consultant will give you hard truths even when they’re difficult to hear. This is one thing that makes my job as a consultant very rewarding since I have the opportunity to affect change.
What is the role of an ERP consultant?
It’s important for an ERP consultant to serve as a trusted advisor to a client. This means that the consultant brings an outside, independent perspective, and becomes an expert in the client’s organization. The consultant brings value that the organization might not see on its own.
What is the biggest challenge for an ERP consultant?
One of the challenges of being an ERP consultant is the variation between different clients. It can be a struggle to move from one organization to the next when you’ve spent so much time learning about an organization’s culture, people and processes. Shifting to a new project can be a little bit jarring, but it always keeps the job interesting.
Do you have a success story to share?
One story that emphasizes the importance of ERP consultants as well as organizational change management is my experience working with a large organization looking to implement a new accounting system. The controller had been working with an incumbent system for more than ten years, and truly believed that there was no other product on the face of the planet that would come close to meeting her needs. This clearly represented a challenge as the controller is influential in any organization. This needed to be overcome in order to have a successful project moving forward with a new system that would not only meet business needs but acquire buy-in from all stakeholders.
To address this challenge, we took it in chunks. We made sure that we weren’t trying to force any decision on the controller, and we invited the organization to come along with us through the journey of looking at different enterprise systems. We arranged detailed vendor demos that focused on the particular functionality that addressed the organization’s business requirements. After looking at several ERP systems and asking many questions, the controller became a staunch supporter of one ERP system in particular. I think of that as a success story of managing change without being overly pushy.
Innovation is a hot buzzword in the public sector. As described by Rasmus Hansen and Jens Skibsted, “The new breed of innovation professionals can be placed in two categories: innovation custodians and innovation word-slingers. The custodians are middle managers assigned to oversee the innovators and their processes. The word-slingers are external consultants that will take corporate managers through endless innovation workshops or blabber on about the aforementioned processes.”
The truth about innovation is that it is usually accomplished by a hardheaded, single-minded visionary who bullies the world into accepting their innovative ideas. I think of the Wright Brothers and Thomas Edison. Innovation typically grows from the individual rather than a group or organization. Innovation is a difficult concept to teach or draw from most people.
So, how can an ERP consultant be innovative? How can he or she help a client nurture innovation within a government agency? The first requirement is an open mind. The second is a seasoned eye for weird ideas that can be translated to efficiencies and return on citizenship (ROC). Too often, consultants fall back on “best practices” that they have witnessed over the years. Just because it has always been done that way, does not necessarily mean it is the best way to accomplish a task. The QWERTY keyboard comes to mind. It was an important process for manual typewriters to keep typists from having jammed keys, but try and have your organization stop using the QWERTY keyboard and it will reveal the challenges of innovation.
Don’t give up yet. There is always a clever operator or end-user who has a great idea that they are bursting to share it with someone. An innovative consultant will listen to the idea, sort the fly dung from the pepper and frame it in such a way that stakeholders, particularly management, will accept it.
An ERP implementation is a great venue for innovation. The organization has already admitted that it needs some assistance with its processes and actions. It is open to suggestions and the innovative consultant (not the “innovation consultant”) can be the catalyst for success. An innovative consultant will seek out and shepherd those great ideas and translate them into a positive change.
Every organization can reinforce good ideas, promote changes to the status quo and nurture innovation wherever it grows. That defines an innovative ERP consultant.
Written by Rich Farrell, Senior Account Executive at Panorama Consulting Solutions.
As I shopping this past weekend, I had an interesting experience at one particular store. The friendly salesperson accompanied me around their store for an entire hour. She made great suggestions and steered me away from some “bad choices.” After leaving the store, I was grateful for getting so much done but I was a little perplexed at the amount I ended up spending. It led me to think, “How much can we really trust our advisors when making important decisions and purchases?”
Similar to the concept of commission for many retailers, the majority of ERP consulting firms are aligned with one or more ERP software vendors. If the consulting firm is successful in recruiting new business to the ERP vendor they are aligned with, it will receive significant kickbacks from the contract. Of course, these motives are not always easily detected or understood because often, the ERP consultants will portray themselves as trusted and unbiased advisors. This dawned on me as I realized my “trusted shopping advisor” was also looking out for her own interests as she recommended the most expensive options throughout the store. I had fallen for her strategy!
So in light of the holiday season, I wanted to share some important questions for you to ask your “trusted advisors” in order to help you navigate through the clever sales strategies of ERP consulting firms:
1. Which ERP software systems have you evaluated for previous clients? If the consulting firm is aligned with one or more ERP software vendors, they will typically evaluate the same ERP vendors in the long and short lists for the majority of their clients. This demonstrates that they may not be fairly considering ERP systems which may be a better fit for your institution. With nearly 200 ERP systems out there, it is crucial for you to work with ERP consultants who will independently identify the best software for your unique processes.
2. Do you earn money or other incentives from software sales? Although it may be challenging to obtain an honest answer for this question, it doesn’t hurt to directly ask this. Nearly 100% of ERP consultants earn revenue by selling software or recommending specific products to their clients.
3. Will you be charging based on the savings you negotiate on our behalf in the software purchase? Even if a consulting firm indicates they do not make any money from software sales or recommendations, they may be receiving incentives indirectly through other avenues. For example, a common rigged approach is collaborating with select ERP software vendors to present a higher initial price. Then, the consultants will present a lower negotiated price. Unbeknown to you, the initial price was artificially inflated and the consultants will receive an incentive on the back end.
Just like you wouldn’t want to buy an expensive present that the person will end up hating, you also do not want to commit to an ERP system that will be a poor fit for your government institution. In Panorama’s experience, we have seen how detrimental the wrong ERP software can be to government institutions trying to serve citizens and make a high socioeconomic impact. During ERP selection, it is important to perform adequate due diligence to ensure you are working with ERP consultants – such as Panorama’s team of independent ERP consultants – who do not have a hidden agenda and are truly on your team.
When choosing an ERP implementation consultant, there are many to choose from. With the various system integrators, value-added resellers, independent ERP consultants and solo 1099 consultants available in the marketplace, finding the right one can be a challenge. Given the fact that most ERP consultants contribute to ERP failures, are more concerned with the interests of the ERP vendors they partner with, and/or don’t have a robust methodology, choosing the right firm can be more complex and risky than navigating a battlefield of landmines.
Deloitte Consulting is one of the largest ERP consulting firms in the world, and as such, one of the firms most considered for companies’ ERP implementations. In our industry experience, we have found that Deloitte is especially prominent in the world of Oracle and SAP implementations. Below is a brief snapshot meant to help clients compare Deloitte to other ERP consultants (full disclaimer: although the below analysis is objective, we often compete with them for implementation business):
Strength in numbers. Deloitte is a huge consultancy, with 44,000 consultants across the world. Our larger, multi-billion-dollar and global clients tend to like the global reach of the firm. In addition, the company also provides tax, audit and a host of other complementary consulting products. While their breadth of services might suggest a lack of focus or depth in any one area – including ERP consulting – some organizations are drawn to the appeal of services.
Focus on SAP and Oracle. For companies looking for narrowly focused technical consultants to assist with their SAP or Oracle implementations, Deloitte can be a viable option. The company is a SAP Global Partner and an Oracle Diamond partner so they clearly know these two ERP software solutions fairly well. We have not come across the company when dealing with solutions such as Microsoft Dynamics, Infor or Epicor but they have pitched their system integration capabilities related to the two leading Tier I systems to our clients on a number of occasions.
Track record of high-profile ERP failures. One of the concerns with Deloitte in recent years has been its abnormally high rate of ERP failures – many of which either led to or are currently in litigation. Many high-profile organizations in both the private and public sector have run into problems with Deloitte, including firms such as Marin County, Levi Strauss, Southern California Edison, Los Angeles Unified School District, State of Florida and State of Massachusetts (click here to read a recent article about recent Deloitte ERP failures). In addition, our ERP and SAP expert witness practice has been involved in a number of other confidential litigations involving Deloitte, further underscoring the challenges the company is having with its ERP implementation client base.
Imbalanced independence and innovation model. Like many large, “big 5” consultancies and system integrators, Deloitte doesn’t position well when evaluating two important criteria for successful ERP consultants: independence and innovation. Organizations benefit from independence because it ensures their consultants aren’t peddling products or services that benefit ERP vendors over the client. Innovation benefits clients because it ensures that consultants aren’t using the same, tired processes, approaches and methodologies that have led to the extraordinarily high failure rates over the last twenty years. Deloitte’s deep partnerships with SAP and Oracle, along with their methodologies dating back to the 1990’s, suggest that they are lacking in both areas.
Just like any ERP consulting firm, Deloitte has its strengths and weaknesses and the importance of each will depend on what is important to you and your organization. When considering Deloitte compared to other ERP implementation consulting options, it is important to ask some key questions. For example, how unique are their strengths and are there other consulting firms out there that have similar advantages? How important is their spotty track record when it comes to the success of your project – and ultimately, your job stability?
There are many other questions to ask when considering alternatives to Deloitte. For example, how important is a focused, robust and award-winning methodology? Are there other firms that can provide the same strength in numbers and global reach to support your ERP initiative? Are there other firms that provide the independence and innovation required to make your ERP implementation successful? Even if you know you are going to implement SAP or Oracle, which are both in Deloitte’s wheelhouse, chances are that there are other good options on the market as well.
Learn more by downloading our white paper, Guide to Choosing an ERP Implementation Partner.
Managing an ERP implementation is tricky business. Most organizations who set out on this journey aren’t experienced at managing a transformation of this magnitude and complexity and aren’t even sure where to begin. The first step is to recognize this fact and to understand that establishing the proper management structure is critical to the success of the ERP implementation. Failing to do so will almost always result in a failed implementation; and it should be noted that even being able to define success or failure, let alone measure it, is a challenge if not properly managed.
So where should you begin? Get help, get help, get help! Did I say get help? Absolutely! It is paramount that you seek the expert guidance of an independent ERP consultant to plan your project. An ERP implementation may be the most important endeavor your company will ever take on – your very livelihood may depend on it so why do it alone? Seek advice from those who specialize in ERP implementations and those who have been through it before. While it may not guarantee success, it will definitely increase your odds and save thousands if not millions of dollars in the process.
Following is a typical scenario of an organization that chooses to implement ERP software without outside guidance:
- The company is growing fast; its current systems can’t keep up or support future growth.
- There are many disparate systems; redundant data is ramped.
- Access to data is slow; reporting is backward-focused and unreliable.
- The functional stakeholders look to the IT department for help.
- The IT manager takes on the challenge of finding a new ERP system.
Sounds good so far, right? Yes, so far, it sounds great but this is when it starts to go downhill. The IT manager begins researching and calling ERP vendors, then quickly becomes overwhelmed with a huge array of available products and services. Which vendor is right for our business? Which products do we need? Which technology is the best fit? How do I evaluate if the ERP software is going to meet our needs? The IT manager can’t possibly know the answers to these questions without first determining strategic business objectives, documenting the key business processes, determining desired functionality, documenting business requirements, etc. – but how does the IT manager go about determining this? Who is going to help?
If the IT manager is fortunate enough to make it through the software selection process (most don’t), it’s only natural that the IT department should manage the implementation, right? WRONG! No doubt most IT managers are technically savvy enough – after all, how else could they make it as an IT manager? So let’s continue our scenario of an organization going it alone:
- The IT manager does a good job of installing the ERP software but then hits a roadblock getting the functional leaders to decide how the solution should be designed.
- The functional leaders are content letting the IT manager take on the task, with little support – after all, they have a business to run!
- The IT team does its best to design the system based on its limited knowledge of the business.
- The significant organizational change management aspects aren’t understood, leading to poor communications, training and adoption of the ERP system.
- Due to the poor communications and lack of functional area involvement, multiple phases of “rework” result.
- The business executives are hesitant to support or approve the system design.
- As the system is redesigned, the project is delayed and costs are escalating out of control
I’m sure you can see where this is going . . . and believe me, you don’t want to go there!
The problems of going it alone are many and always costly. In our sample scenario, we’ve only scratched the surface. Want to find out how to properly manage an ERP implementation? You know what to do . . . Get Help!
Written by Allan Bloom, Director of Client Services at Panorama Consulting Solutions.
Another year has nearly flown by already. In 2013, much in the ERP software industry stayed the same but plenty of things changed as well. In terms of things that haven’t changed in the past year, ERP failure continued rearing its unwelcome head among CIOs, CFOs and project managers. For example:
- Both the states of Massachusetts and Florida recently announced high-profile failures related to their ERP and HCM systems.
- US Steel spent hundreds of millions of dollars on their ERP implementation, which is now slated to run through 2016.
- Panorama’s ERP expert witness practice has hit record levels of revenue and demand, which is a troubling indicator for the state of ERP implementations across the globe.
While the rate of ERP failure doesn’t seem to have subsided in 2013, there are plenty of positive and exciting changes that gained traction in the last year. For example:
- As we predicted at this time last year, mobile and business intelligence are gaining steam.
- SaaS and cloud solutions continue to enjoy increased adoption, although the hype has started to subside.
But that’s looking backward to what has already happened. How about next year? What does 2014 have in store for the ERP software industry? Here are our top ten predictions for the coming year:
1. ERP failures aren’t going away anytime soon. Unfortunately, and as mentioned above, ERP failures aren’t going away anytime soon. ERP implementations are simply too complex and too risky for all organizations to succeed, especially those that are overconfident in their own abilities or choose to leverage the support of subpar ERP consultants and system integrators. Our growing expert witness practice is a good indicator of ERP failure rates and we see our growth in this area accelerating, suggesting that ERP failure rates are not slowing.
2. Buyers of ERP systems are becoming more educated. The upside of ERP failures is that they tend to educate (and scare) people about to embark on their own ERP implementations. Each SAP failure or troubled Oracle ERP implementation you read about serves as a case study of what not to do. In addition, there are plenty of free or inexpensive resources available to educate on how to make your ERP implementation successful. For example, Panorama’s 2013 ERP Report and our on-demand ERP webinars are good reference points for teams wanting to educate themselves before embarking on an ERP implementation.
3. Less abdication of responsibility for ERP success. As part of their self-education, CIOs, CFOs and ERP project managers are realizing that they are ultimately responsible for the success or failure of their ERP implementations. It may sound easy enough to delegate full responsibility to your ERP consultant, ERP vendor or system integrator but your implementation will succeed only if you make the correct – and oftentimes difficult – decisions related to your business. For example, if your ERP consultant isn’t delivering results, then fire them. If you don’t fully trust your ERP vendor, look at third-party oversight options. If you don’t want a hodgepodge of different consultants working on your ERP implementation, then hire a single throat to choke. These decisions can’t be outsourced to third parties.
4. Will SAP, Oracle and Microsoft Dynamics continue holding off Tier II competitors? Our Clash of the Titans 2104 report reveals that SAP, Oracle and Microsoft Dynamics have all done a good job of reversing previous years’ loss of market share to Tier II ERP vendors, such as Infor, Epicor and IFS. For the first time in over three years, the big three vendors regained some of the market share they had lost, which we didn’t anticipate. The Tier I vendors appear to have the marketing and sales machines but plenty of Tier II vendors now have private equity backing so it could go either way. I’ll be honest, I don’t have a clear prediction on this one but it will be interesting to see play out in the coming year.
5. Continued emergence of mobility and business intelligence. As companies look to get more out of their large investments in ERP systems, more will invest in mobile solutions and business intelligence software to get their ROI. More companies will recognize that newer ERP systems will not necessarily help them make better use or sense of business information without the tools to better support decision-making among employees and key decision-makers. In addition, executive teams will be under increasing pressure in a shaky economy, which will put more pressure on their employees to provide decision-making tools and dashboards designed to support executives’ need for information, no matter where they are.
6. Convergence of ERP implementation, organizational change management and business process reengineering. It’s no longer a secret that lack of focus on business process reengineering and organizational change management is a key driver of most ERP challenges. As a result, successful organizations will realize that they need to bake these activities into their overall ERP implementation, rather than ignoring them or operating them in a silo. When choosing an ERP implementation partner, it is important to separate the ones with integrated and comprehensive implementation, business process and organizational change management methodologies. For example, Panorama’s PERFECT Path ERP Implementation Methodology fully merges these critical success factors with the more fundamental technical activities.
7. Higher failure rates of ERP vendors and consultants. I take the view that ERP implementations don’t ever fail but ERP consultants do. Up until recently, there has simply been too much money to be made and too little accountability for most ERP consultants to focus on their clients’ success. In the past, organizations had to choose ERP consultants focused on one particular software solution, which resulted in limited options, competition and accountability. Now, organizations can leverage independent ERP implementation providers to provide options to the myopically-focused technical consultants that have historically cornered the market.
8. Shakeup among ERP consultants. The ERP consulting space is slowly changing – and for the better. Implementing organizations no longer have to choose between 1) software selection firms that don’t do implementation, 2) system integrators that provide functional and technical consultants but aren’t good at project management or organizational change management, or 3) manufacturing consultants that don’t really understand ERP implementations. Good ERP consultants should be able to provide all of the above and the ones that do are more likely to succeed than those that don’t.
9. Flaws in the ERP software industry will finally be exposed. The primary reason that I started Panorama in 2005 was because I saw opportunity to provide objective guidance in a sea of imperfections and shady practices. Although I don’t consider myself a jaded person, it is somewhat disappointing to see that many of these flaws are still very much real. Whether it’s contracts that increase risk for clients or “independent” consultants that take a cut of negotiated savings with ERP vendors (leading to vendors gaming the system), there are still far more pitfalls for our clients than we would like to see. In the coming months, look to us to provide an independent inside scoop on what these risks are and how to navigate them.
10. ERP success rates will increase. Despite the gloom and doom of ERP failures, those that are successful will actually be more successful than ERP implementations of the past. In other words, there will be more of a divergence between the successful and the not-so-successful ERP implementations. The good news is that while this trend won’t completely neutralize ongoing failures, they will demonstrate that ERP success is possible when implementation best practices are followed. This trend will also reinforce the fact that cheaper is usually not better when it comes to considering various ERP implementation options.
These are just a few predictions that we anticipate for the coming year. We will start to get a sense of the accuracy of these predictions when we publish our 2014 ERP Report at the start of the year, which will quantify the trends and outcomes of the past year in more detail.
What do you think? Have we missed anything or do you have different views? Please comment below and share your predictions for the coming year as well.
Learn more by attending our webinar on Thursday, December 12, Top Ten Predictions for the ERP Industry in 2014.
A few weeks ago, I published a blog outlining how to determine the most appropriate ERP vendor short-list for your organization. We have yet to discuss how to narrow this field of several different options down to two or three options most worthy of further analysis. Given that we have hundreds of people attending our ERP Vendor Showdown webinar series this week, we thought it would be a good time to provide some advice on how to best complete this important part of the ERP selection process.
First, it’s important to understand why this process is so important. Aside from the obvious need to narrow the field in order to ultimately make a final ERP vendor decision, there is also the need to structure your analysis and evaluation in a way that provides your project team with a focused, structured and objective approach to arrive at a final consensus. In addition, the evaluation process should lend itself to capturing and examining multiple data points – both inside and outside the organization – to provide a comprehensive analysis of which ERP software is the best fit for you.
Here are a few tips to transition from your short-list to your chosen ERP vendor:
Don’t rush the decision. It can be difficult to find the right balance between quick versus thorough ERP software selection. On one hand, it can be easy to get caught up in analysis paralysis, death by consensus and other pitfalls of a thorough evaluation process. On the other hand, it can be easy to gloss over the details in the name of making a quick and painless decision. We have found that the most successful organizations find the right balance between the two extremes – they don’t rush the decision but they also don’t get overwhelmed and paralyzed by the process.
Consider multiple data sources during your ERP software selection. Pick any data source regarding your ERP vendors under consideration and you’re likely to get different stories regarding which one is the best. For example, our Clash of the Titans report provides a comparison of SAP vs. Oracle vs. Microsoft Dynamics. The report shows that, on average, Oracle has the highest satisfaction rate, while SAP has the fastest return on investment and Microsoft Dynamics is implemented in the shortest timeframe. So which is the best based on these potentially conflicting data points? This is why it is important to evaluate data from multiple sources, including your own internal demo scores, reliable resources such as Panorama’s ERP Report or Clash of the Titans, and advice from independent ERP consultants who have selected and implemented hundreds of ERP systems over the years.
Focus on what’s most important to your organization. The beauty of being the world’s leading independent ERP consulting firm is that we don’t have any preconceived ideas of what the right answer is for our clients. Instead, leverage our industry experience – whether it be in the manufacturing, services, government or healthcare verticals where most of our clients reside – to help define and prioritize business and technical requirements unique to that specific client. It can be tempting to put too much stock in anecdotal examples of what software other organizations have implemented but at the end of the day, what your organization needs is what matters.
Reengineer your business processes before ERP implementation. One of the common failure points of many ERP implementations is that they assume their chosen ERP software will foster business process reengineering through sexy new technologies. While it’s true that software is an enabler of operational improvements, those improvements simply won’t happen unless you define how your processes should look in the future before you select and start implementation. In addition, conducting a fundamental level of business process reengineering prior to your selection decision will ensure that you are making your decision based on future-state needs, rather than simply paving the cow paths of what has worked in the past.
Don’t forget to start planning for implementation now, before your final decision is made. While many organizations want to make a final decision before even thinking about implementation, it is important to note that most ERP failures begin with mismanaged expectations. In other words, organizations that experience ERP failure often sign contracts with their ERP vendors and system integrators without fully understanding the time, budget and resource requirements to make the project successful – leading to cut corners later in the project. Unlike most ERP consultants, we typically advise our clients to develop a thorough implementation plan and budget so they understand exactly what they’re getting themselves into before making contractual commitments. After all, it’s easier to have any “uh-oh” moments early in the project rather than after spending millions of dollars and years of man-hours trying to implement an ERP system that may have been doomed from the start.
Evaluating ERP vendors doesn’t have to be an overly complicated process. With the right methodology, data points and independent guidance, organizations like yours are able to find the right ERP software and position themselves for a successful implementation.
Learn more by registering for our Vendor Showdown webinar series or – if you are in the manufacturing industry – by downloading our 2014 Manufacturing ERP Report.