Why is an ERP implementation so difficult?
Why is it that a system that is supposed to give you so many advantages is so difficult to implement?
Do the benefits actually outweigh the costs you have to incur?
These are questions I see come up very regularly. Companies are simply reluctant to purchase an ERP system. They postpone it or continue using separate applications, because these standalone systems are easier to understand on their own. Integrating all business processes is complex and is avoided. People even accept inefficiencies as a trade-off.
I dare say that a good ERP system makes you money. It just requires a lot from the organization to make full use of an ERP system. I would like to give you my first 5 tips that will certainly contribute to the successful adoption of your new ERP system.
1. Your objective
Make your objective clear. Why are you investing in an ERP system? Where is the pain in your company, and can an ERP system help remove that pain? Or do you not yet have any pain, but expect growth in your company and is your current system not suitable for that? Are you starting with new products or services that require a different system?
Your objective is extremely important. Determine where you are and where you want to go, and give this objective a challenging and clear name. This main objective is your project name, and everything you do should be tested against this objective.
2. Your processes
Mapping your processes is really very important. Create a clear flowchart of your processes and the steps they go through. This gives you a good picture of how your company actually works, where the pain points are, and where the responsibilities lie.
Then, for each pain point, determine how you are going to measure whether progress is being made. Define Key Performance Indicators (KPIs) and measure their value continuously during the implementation of the ERP system. In this way, you can measure whether the ERP system contributes to the objective.
3. Your requirements and wishes
You have set your objectives and know which areas you want to improve and by how much. The processes within the company are clear. This information already provides guidance on what the system must be able to do, without going into the detailed functionalities of an ERP system. But of course there are also functionalities that you specifically want to mention. Some are very important (Must Haves) and some are less important (Nice to Have).
Make a list of all the functionalities you think you need within your company. Do this per process and group them by process. It is very important to consult your employees in this. Make sure everyone (or key users) can contribute to drawing up this list.
The last step is prioritizing. For this I recommend the MoSCoW (see image). In order for a project to succeed, at the very least the must-haves and the should-haves must be delivered. The other wishes are less important and are often delivered later, or sometimes these needs disappear entirely.
Be strict and focus on your objective. Anything that does not contribute to the objective, anything that does not deliver direct value, is better crossed off immediately.
4. Preparing your employees
Implementing an ERP system is a major change in a company. Many employees have been working with the existing system for years and are confronted with new systems, new rules, and new work processes. You need to manage this change!
Make sure the objective is clear to everyone. Involve people in the project where possible and where necessary. Regularly give employees an update on the status of the project. Create support for your vision and objective, and make it clear that the ERP system is a means to achieve the goal. But also make it clear that the system is completely useless without the right people at the controls.
People do not like change, so the art is to turn the fear of change into enthusiasm for the challenge.
5. Standard or custom
What should I do? Should I look for a standard package, or should I have custom software made, or is a combination of both possible?
My advice is: do not be afraid of custom work. You have a vision and, based on that, have determined a strategy with your company. You know that your vision and the proper execution of the strategy will bring you great success. So never let anything hold you back, and make sure you have the perfect tools to achieve your goal.
Many software packages on the market can easily offer 80% of the functionality. They all have that as standard. In my view, a package that is a 100% match does not exist. You will see that concessions are always made, and these come at the expense of your objective.
Make sure your software package is perfect, has no unnecessary frills, and fully contributes to your objective. It is best to look for a package that already includes a lot as standard and can easily be extended with custom work. When thinking about custom work, do not think of a missing piece, but of something unique that you came up with and that (probably) no one else has. Custom work can give you an edge over the competition.
These are my first 5 tips for achieving a successful ERP implementation. If you have followed these tips, then you have really taken important steps. You have a clear objective. You have mapped out the processes and put your requirements and wishes on paper. You have thought about standard and custom software and are ready to start looking for a supplier or implementation partner. In my next blog, I will give you even more tips on how best to move forward.
I wrote a follow-up! Read part 2 of why an ERP implementation is so difficult.
