“Insanity: doing the same thing over and over again and expecting different results.”
Why are you reading this? I’m sure you have better things to do, like focus on your customers and your products. You’re likely reading this because at some point your ERP solution stopped meeting your needs. Don’t worry, you’re not alone; only nine percent of companies achieve 80 percent or more of the expected benefits out of their ERP system.
For some companies this may have happened on day zero due to the design of the implementation. For other companies, it may have happened later as the needs of the company evolved (and their ERP solution did not). Your business environment is constantly changing. Growth, mergers & acquisitions, new regulations, new products and even new competitors can impact the requirements you have for an ERP system. At the same time, unless you’re working to continuously evolve your ERP solution, a gap will grow between your needs and what your ERP provides.
The Three Sins of ERP
Here’s something to think about: 75 percent or ERP implementations take longer to implement than planned, 55 percent are over budget and 21 percent fail at implementation. Add to that the fact that 60 percent receive less than 50 percent of their expected benefits, and there’s good reason to step back and try to understand why some ERP projects fail while others succeed.
In working with companies who came to us because of failed ERP projects, we have identified what we call the Three sins of ERP that other vendors often commit. These include: a lack of continuous improvement approach, a singular concentration on software and assuming the job is over when the solution is deployed.
In general, these “sins” are associated with a feature-focused rather than a business-focused approach to ERP. In fact, 72 percent of projects have a feature focus versus business focus. A feature-focused approach can lead to complex, higher cost, big bang projects focused on “advanced” software features. A business approach will lead to a lower cost and lower risk phased project focused on achieving business outcomes through process review and business transformation backed by a rational set of software features.
How can you tell the difference? Are you working to define your technical requirements or your business process requirements? When you train do you conduct system transaction training or process and workflow training that emphasizes ERP as an enabler of those process, not ERP as the process itself? Do you measure the success or you ERP based on minimizing technical bugs or maximizing business results?
Time To Rethink Your ERP
Just as a near death experience can cause you to reassess your priorities, a failed ERP implementation has led companies to rethink their solution.
The first step in preventing a similar fate is to challenge yourselves about the role of ERP in your business and the criteria you will use in selecting an ERP partner.
If you don’t, you’re doomed to suffer the same fate again. After all, don’t you already have an ERP system? What will prevent you from being in the exact same place in eight years?