ERP implementation failures are commonly discussed in the media and feared by corporate executives. Most executives we speak with are less concerned about return on investment and more concerned about making sure their projects don’t turn into train wrecks.
Companies spend millions of dollars on their ERP initiatives, so it’s not asking too much to expect that they fully take advantage of the potential functionality of the software they implement. Here are a few things to consider if you’re truly focused on driving ROI for your ERP implementation:
1. Set the bar high for your ERP implementation. It’s okay to shoot for the stars. Rather than operating out of fear, try aiming for something higher, such as delivering a set of business processes and related ERP functionality that will take your business to the next level. This mentality should affect every aspect of the project, such as where you focus your time and resources, how to bridge the gap between new technology and your employees and other critical mindsets that will make your project more successful.
2. Focus on people and processes, not technology. Don’t get caught up in the technological aspects of the implementation. ERP vendors invest billions of dollars per year in R&D to make the cool bells and whistles even cooler, but at the end of the day, the success of your project won’t have anything to do with these technical features. Instead, it will come down to how well you handle business process reengineering and organizational change management – the two most important success factors for any ERP implementation.
3. Don’t underestimate the cost, time and effort required for your ERP implementation. While it is important to not become too focused on implementation time and duration, you also have to remember that you will never achieve your expected business benefits and ROI if you don’t make it through your ERP project alive. When developing your project plan, don’t take your ERP vendors’ proposed project plans and estimated costs at face value. Instead, benchmark to other organizations, get someone – other than the vendor – to estimate your project’s time and cost and develop a plan and budget that makes sense for your organization. Setting realistic expectations early is the first step toward a ROI-driven and successful ERP implementation.
4. Understand where the finish line really is. Just as marathon runners know that they are in for a 26-mile haul versus a 400-meter sprint, successful ERP implementers know where the finish line really is. Most organizations go into their ERP implementations with the expectation that they are going to implement everything that their new ERP systems have to offer. However, due to inadequate and mis-estimated time, budget and resources, most organizations end up quitting the race early and never realizing expected functionality.
5. Focus on the long-term alignment between your business and your new ERP system. To take point #4 one step further, successful organizations don’t ever really “end” their ERP implementations. Instead, they focus on ensuring alignment as their businesses evolves over time. The organizations that don’t institute this depth of focus end up experiencing misalignment between their business operations and technology – ultimately leading to a premature need to replace their systems. One of the ways we help our clients create this actionable philosophy within their organizations is to implement an ERP center of excellence that focuses on continuously improving and keeping their ERP systems aligned over time.
While success and full benefits realization is never guaranteed, this will ensure that you are one of the few organizations that does more than just implement new ERP software. You will be one of the few that actually deliver on-time and on-budget, while realizing the business benefits and return on investment that you’ve expected all along.