It’s no secret that ERP implementations require a dizzying array of skills and competencies. Organizations embarking on digital transformations are hard-pressed to assemble project teams that have a vision for how the business can evolve, have deep project management and ERP implementation experience, have business process reengineering and change management competencies, and have a host of other skill sets that are difficult for most organizations to develop internally.
Because of the challenges associated with assembling such a rare and broad set of collective skills, many organizations turn to outside companies to augment their internal skills with competencies that they don’t possess. Given the difficulty navigating these obstacles, here are a few tips to help you determine when it may be most appropriate to outsource your ERP implementation:
1. Think about people and processes – not just technology. It can be easy to take a myopic view of ERP implementations, focusing almost exclusively on finding external pinch-hitters with software-specific functional and technical expertise. While these skills are important, they are also somewhat of a dime a dozen. Let’s face it: compared to the people and process aspects of an implementation, configuring and implementing ERP systems are fairly cut and dry propositions. Other parts of implementations – such as organizational change management, project management and business process reengineering – are much more difficult. These skill sets are harder to find. When looking for outside help, it is critical to find a partner that has a comprehensive skill set and methodology to help address all the critical aspects of a successful ERP implementation.
2. When in doubt, business acumen should trump technical competencies. As mentioned above, functional and technical software skills are important but not nearly all-encompassing to an ERP implementation. We’ve found through our implementation and expert witness experiences that ERP success and failure typically has very little to do with how well these technical aspects were handled during the implementation. Instead, success or failure is more commonly determined by how the business components of an implementation are handled. More specifically, project management, change management and business process reengineering are three concrete examples of business skills that are critical to the overall success of the project. While the technical skills may seem more specialized and therefore more important – especially if you’re a CIO or IT manager – it’s actually the more intangible areas that will determine your project’s success or failure.
3. You’ll never be able to (or want to) outsource everything. Some companies take more of a hands-off outsourcing approach. While you certainly want to rely on outside assistance wherever it makes sense, you won’t be successful if you don’t step up to the plate to provide a minimum level of internal support and skill sets. For example, outside consultants – no matter how talented they may be – can’t make decisions about how to run your business for you. In addition, they can’t tell you if the designed and delivered ERP system does exactly what you want it to. Only people within your organization can provide these inputs. Therefore, it is important to identify and recognize those skills and responsibilities that your internal team should provide versus those that can be outsourced to outside parties.
To take the above tips one step further, it can be helpful to conduct a gap analysis of the skills required for a successful ERP implementation versus the caliber of internal skills and competencies that you possess in-house. The biggest gaps are going to be the ones that you’ll most likely want to outsource to ERP consultants.