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Despite decades of experience and lessons learned from ERP projects, many organisations and companies still find it difficult to figure out how to realise a successful ERP implementation.
We want to support you in realising a successful ERP project by providing you with excerpts from our Best Practice: "ERP Implementation Procedure Model".
Our experience from almost 30 years of independent ERP selection and ERP implementation consulting can help you to successfully realise your ERP project.
ERP - Introduction Procedure Model
In fact, however, reports, articles and our own research in the field of optimising the ERP implementation process model show us time and again that necessary principles and rules are still not observed in many implementations.
The more the market and the requirements for companies change, the more we see that certain things remain as they are. While the technology, the software architecture has changed dramatically during the existence of Dreher Consulting in the last three decades, the way of implementing an ERP software has remained largely the same. Especially for SME clients who are of interest to software providers, ERP vendors tout cloud ERP systems, agile ERP implementation methods, pre-configured industry solutions as the ultimate. These methods are supposed to ensure project success. However, what we experience with customers who ask us for help during an ERP implementation is exactly the opposite of a successful ERP implementation procedure model. Marketing and sales promises about the possibilities of improvements through the Internet of Things (Industry 4.0), use of block chain techniques, machine learning and artificial intelligence in systems are wonderful technical possibilities, but are of almost no help in an ERP implementation.
The success of an ERP implementation (statistics speak of problems during implementation in 2/3 of all ERP projects) is not a utopia that only very few can achieve. You, your ERP project team and your company can also realise a successful ERP project if you question the process models and the way ERP software providers define their process model in every case.
What Should You Pay Attention to?
The search for, identification and implementation of new integrated ERP (Enterprise Resource Planning) software is associated with high risks for managers and decision-makers in companies. In the worst case, wrong decisions can lead to a standstill in the company's value creation and thus weaken or endanger the company's existence. For the purposes of this article, we will now assume that you have drawn up your specifications, the ERP system in question has been identified and the ERP supplier or ERP software house intended for the implementation has also been decided, then you will tackle the ERP implementation as the next logical step.
Based on more than 400 projects in the independent ERP selection and implementation of ERP software, Dreher Consulting has developed a procedure model from practice for practice.
10 Steps to a Successful ERP Implementation
1. Define a Clear Vision & Strategy For an ERP Implementation
Defining and aligning with a clearly defined strategy is one of the first, important steps for an ERP implementation. Some of our clients start with a digital transformation initiative or ERP selection and subsequent ERP implementation. Regardless of whether a legacy system needs to be replaced or there are other reasons for introducing a new ERP system, what is always needed is a clear vision and, derived from this, a digital strategy in order to be successful in the market. This vision must be far-reaching and go beyond the current status and horizon. These goals should serve as an example: Standardisation of business processes, optimisation and higher flexibility of sales processes, optimisation and reduction of inventories, improvement of service and response times for customer enquiries.
These high-level defined goals are only the beginning of a declination of requirements. Participants and members in the project team have to communicate intensively with the users in order to pick up all employees in the context of change management. It is important to engage employees and make it clear what these goals mean and how they can be achieved as part of an ERP implementation. Questions like: What exactly do you want to standardise? Which competitive strengths need to be developed through IT support? Which processes or functions are you less willing to do without should the new ERP system entail restrictions? Unfortunately, precisely such questions are too rarely asked, declined and articulated. Yet they are precisely the key to a successful ERP implementation process.
2. Don't Spend Too Much Time Selecting & Evaluating Minor/ Unimportant Features.
The ERP selection process tends to be lengthened and analysis biased by vendor software presentations that do not follow process flows but show what functions and features the software has. ERP vendors tend to give "yes" answers to questions about software capabilities. Regardless of whether this can make a process simpler and more efficient. This usually leads to an increase in complexity. Consistently working through an ERP implementation procedure model supports them in this and provides a clear guideline for action.
Unqualified ERP consultants, or ERP consultants with vested interests, also provide biased analyses and do not necessarily advise on the best software solution.
Every euro and every hour spent on unnecessarily long ERP selection processes ends up being missed for the more important and critical implementation phase. Money and time are resources that most companies, however, have only limited access to. For this reason, it is important and crucial that the software selection process is carried out as effectively and efficiently as possible. Experienced, qualified and independent ERP consultants will point this out to their clients because they are needed in the implementation phase. All other ERP consultants drop out after the ERP system selection because they do not know how to implement it. This phase is much more challenging. Therefore, qualified, independent ERP consultants are not interested in dragging out the selection process, but focus on the essential processes and implementation requirements that are crucial for the client.
3. Excellent Implementation is the Key to Successful ERP
Building on point 2, it is not really purposeful to select a perfect ERP software and then implement an ERP system with a mediocre process model. Our experience has shown that in projects where many options are constantly examined and analysed, the return on investment of the project decreases. This is a point that companies tend to underestimate in the selection process because it is easier to question a necessary decision again than to make it.
In our client projects, through analysis of many ERP selection projects, we have found that there are usually only a handful of vendors as options that are realistic and have unique differentiators. The quicker a company arrives at this selection narrowing, the less time and money is wasted on endless analysis. Once you have narrowed down your choices, it is useful to focus on their ERP implementation process models to highlight the differences between ERP vendors. ERP software has been around for 40 years, sometimes in high version levels. There are hardly any functions that have not been developed. A prerequisite is, of course, the suitability for the industry in which this software is to be used. Therefore, it is decisive which process support, which simplification of processes and which cost reductions in the execution of business processes are best supported by the ERP software of which system. Working this out is one of the most important tasks of independent ERP consultants.
4. Accept That a 100% Solution is Not Possible.
In our workshops we always experience the enthusiasm for new, revolutionary techniques and features. Or a revolutionary idea for the implementation of process models for medium-sized companies. It is interesting to note that we humans all hear what we want to hear. So if the software supplier promises that he has developed a new method that does not require a lot of effort and requires little time from the project staff, you will hear this and store it away. Therefore, when presenting implementation strategies, it is important to evaluate the statements in a differentiated way. Unfortunately, there are no easy answers and there are no easy ERP implementations. Whether it's industry templates, industry templates, agile implementation methods or new technologies, it doesn't make implementation any easier. We have found that a system is easier to implement if the processes to be mapped have already been defined to a large extent in the specifications and the ERP usage goals are used over and over again as a reference for everything that needs to be set.
5 Start with Realistic Expectations of An ERP Implementation
In the analysis of projects where failure was imminent and we were asked to help, we could identify one main reason in the evaluation of the reasons. It is usually unrealistic expectations that are the first link in a chain reaction that triggers project problems. Above all, it is reasons related to too little time of the project participants for the project, too low budgets and resources outside the core team, which then inevitably lead to problems, poor implementation decisions or even the termination of the project in the course of the project. Most of the time, estimates of a project duration are based on the assumptions of the software vendors without knowing the real resources of the team members or taking into account their project collaboration and efficiency. As Dreher Consulting, we have learnt to scrutinise such implementation plans for details and identify the focus points that are critical for an ERP project to be successfully implemented.
6. Treat Your ERP Implementation As a Business Project, Not As a Technology Project.
Technology can be very impressive, that is undisputed. But it also carries the danger of designing processes, workflows and much more in an unnecessarily complicated way. Mostly these are requirements in the context of integration of third-party systems, complex requirements for workflows and much more. It can help you a lot with these complex technological issues if you always ask yourself the question: is this a process where your customer has an advantage if we create it this way? In the context of an ERP implementation process model, we think it is more important for you as a client to focus on looking more at the non-technical aspects of an ERP implementation. We see the focus on a clear strategy, on a functioning organisational change management, an effective business process management and the involvement of your users as much more important for a successful ERP implementation. Our evaluations of many projects have clearly shown that this greatly increases the chances of success.
7. Prepare Well & Consistently For the ERP Introduction
Before you start and plunge into the implementation, it is important to scan the planning for risks. Just like building a car, you would not expect the wheels to come first or the navigation system to be available at the first process step. Therefore, accurate sequencing is crucial. If you are generous at this point, you might find that an army of system integrators or ERP software consultants show up, start the meter running with your billing, and begin installation, configuration and test management without following clear instructions. This route is usually very expensive and inefficient for an ERP client. It is not always possible to implement a fixed budget. This leads to your system integrator - i.e. your ERP software house - owning the implementation and not your internal team.
8. Assemble the ERP Implementation Team Carefully ...
You expect your ERP software house to send the best consultants to your project. Consequently, you must do the same with your own team. Unfortunately, it is usually the case that the best ones are already scheduled in other projects or can only be taken out of their daily business routine with difficulty.
However, they have to be employees who understand the current processes well, were involved in the specifications and future requirements, and have ideas about what can be improved in the future. The tasks for organisational change management and possible new process design have to be performed and are usually critical roles for the own staff to enforce. It may be useful to bring in external experts to provide support and a neutral assessment for the duration of the project.
9. Invest in Change Management
In none of our many ERP implementations have we heard from entrepreneurs or responsible project managers that we should have spent less on change management or that we could have saved ourselves one or two measures in change management.
But we have heard from many entrepreneurs and countless managers (as well as project team members) that, in the aftermath of an ERP implementation, they wished they had invested more attention and more resources in change management. It is not uncommon for our clients to hire us for such tasks because the internal capacity is not there. Whatever budget you set for change management, it is probably always too small. Even if you think your staff and project team will be enthusiastic about the changes (they probably are), change management will become a critical issue at some point during the project. Also because change is not always easy for those involved to manage. Therefore, investing in change management is a wise investment in the context of an ERP implementation.
10. Implement ERP Quality Assurance Risk Mitigation
Surely you don't want your software vendor or ERP system house to self-assess how well they have done the implementation or assess their work. Ultimately, you have a lot to lose if you are too soft on project risks or project challenges. In the course of an ERP implementation, you will always encounter challenges that are new or were not expected. Be it technical problems or organisational challenges that are pointed out by the employees. These must be overcome and made transparent. Here is a small example: Would you want the fox to guard the henhouse? Your company and especially your organisation needs full transparency and an honest, neutral assessment of what is going well and what needs to be improved or what is not working at all. Most of the time, attempts are made to get a handle on this through steering committee meetings. Here the provider presents its project progress and we are back to the metaphor of the fox in front of the henhouse. The vendor will certainly try to present deficiencies in your organisation at some point, thus laying the groundwork for additional consulting expenses and billing. If your project team waits until such an event occurs, it is usually already too late. This is where an independent third party - who has nothing to lose - can add value by identifying and reducing risks.
Summary: Benefits From Our ERP Implementation Process Model
We hope you find our 10 best-practice points for an ERP implementation incident model helpful.
It's not rocket science. An ERP implementation requires discipline, focus on the goal and consistency.
Of course, experience with such ERP projects also counts for a great deal. If this is not sufficiently available in your own company, it is easy to call in an experienced, independent ERP consultant for project management or project expertise. This lays the foundations for a successful ERP introduction.Have you got any questions, feel free to contact us on the link below ...
