Smart ERP - Less is More!
Last month we continued to talk about where to find the value in ERP implementations - Finding Value
This month we make a case for Smart ERP - Less is More when it comes to functionality. Find out what this can mean to you.
Smart ERP - Less is More! By Paul Sita, Principal, Innovative IT Consulting, LLC. Paul can be reached at 631-549-1685 or email@example.com.
How can less be more? One of the most common issues faced by clients considering a move to a new ERP platform is How much functionality to implement compared to their current legacy system? We have seen very few clients fail due to implementing LESS functionality. On the other hand we have seen many clients fail attempting to implement MORE functionality. The rush to keep adding to the scope, regardless of budget, in many cases slows things down.
Why is this and what lessons can be learned?
Since we don't do this often, now that we're doing it, let's do it all! On average, companies switch ERP platforms only once every 10-12 years. (8-10 depending upon who you listen to). In either case, in technology that’s a lifetime. And not only has technology changed radically since your last implementation, but chances are that your business and organization has changed radically as well. And even if your business model hasn’t changed that much, it’s likely that your software and your business are seriously out of alignment with each other.
It's now or never. (Not true). Decision makers in mid-size companies are acutely aware of this situation. Frequently middle management has been “living with” any number of serious shortcomings and system inadequacies for many years. So it is all too easy during the prototyping or implementation process to push to add all sorts of “neat” things that sound great, and possibly are – things such as CRM, High end analytical tools such as dashboards and Cubes, Document management, Portals, - the list goes on. Frequently the key drivers in the company know how difficult it is to get support for large scale initiatives such as ERP. They fear that if everything they can envision is not included in the project from the outset, that it may never get implemented.
It's only good if it's actually used. (Absolutely true). In and of themselves these are all good things. However, the process of implementing an ERP system stretches the limits of the resources of most organizations even when that implementation is limited to business processes and practices that are well understood within the organization. It is even harder to get people to focus on things that go beyond the limits of those practices and processes. No standards exist, and frequently no business requirements exist. Therefore, with these kinds of additional scope, it becomes increasingly difficult to get things nailed down, make decisions and move through the implementation. No one is suggesting that you replicate your current business process in your new ERP system. Making the right trade-offs between existing and new practices and functionality requires a level of experience and savvy that few clients have. This is one of those areas in which an experienced ERP specialty firm such as ours can add significant value to a client’s implementation.
Five simple steps to SMART ERP. Before your ERP initiative gets off track, ask yourself these 5 key questions.
2) What are the costs of delaying the implementation one or more months?
3) What are the risks involved in extending the scope of the implementation?
4) What are the costs of NOT ADDING to the scope of the implementation?
5) Do we have enough knowledge of the system to make the right decisions now regarding the additional scope? (In most cases the answer is NO.)
Embrace the paradox of slowing down to speed up. Less is More. In most cases, getting live on time and within budget is much more critical to the organization than adding scope and functionality and extending the time line. Budget is not the issue. Ability to focus, ability to make the right decisions and ability to effectively plan out new and improved business processes is the issue. Start small, build an environment of continuous improvement and evolution, and grow bigger, faster.
To Upgrade or Not to Upgrade - That is the Question.
In last month’s tip I discussed ways to stay informed about the upgrades, both minor, patch level upgrades and major, new releases. Use this information to make the decision as to if, and when to upgrade. This month we continuie with tips on the ERP upgrade subject by discussing whether you should upgrade or not upgrade. So, what is the answer? Drumroll . . . . Well, frankly, it depends. It depends on the upgrade, your specific situation, any future business growth plans, and many other factors.
Avoid patch level mania. Last month I mentioned that patch level releases can come out very often so let’s start by stating that you do not have to upgrade every time a new patch level comes out. They can be done “as a group” once it is decided to do them. Each ERP vendor has a slightly different way to do this, but the general idea is that you can upgrade patch levels 1 – 5 as one planned event. If a particular patch level comes out that fixes a bug you are having or gives you some functionality you need then do the upgrade.
Business drives the decision.When it comes to major releases that add significant functional or technological changes then utilize the business people in your organization to weigh in on the decision. A good person to consult is the sponsor of the original implementation, but other business leaders can be included. If the business can use the new functionality or technology to run the company better (i.e. cheaper, faster, etc.) then do the upgrade. Or if the new functionality will allow the company to grow in an area that may have been “out of reach” before then do the upgrade.
Stay leading edge, not bleeding edge.Most mid-sized companies cannot afford to be on the “bleeding edge” of technology. That’s where you adopt a new functionality or technology before it has matured in the field. The same can be said about upgrades. So, unless there are overwhelming benefits to upgrading sooner rather than later, wait to upgrade. On the other hand don’t wait forever to upgrade, maybe 1 or 2 major releases behind the newest one so that you are current and supportable. Next month I’ll discuss how to do the upgrade if you’ve decided it is time.
The Question of the month!! Every month we field a question from one of our fearless readers! Don't be shy. Submit your hardest question and see how we do.
Word Scramble time.
D L E G N B E I G D E E
“ A software change initiated by the ERP vendor that usually adds significant functionality to the system. (2 words).(MAJOR RELEASE)
Question of the month. This month's question comes from Jason in NY City.
Whenever we upgrade our system, it usually takes weeks to iron out the problems caused by the upgrade. Because of this, we are usually far behind other users of the same system. Any suggestions? Jason, it sounds like your IT team doesn't have a good change management process. Any number of situations could cause this to happen. Regression testing is crucial to successful upgrades. Start by assembling a team of key users who will test the upgrade BEFORE it goes into production. Want to learn more about how to test? Stay tuned!
In June, we'll look at the critical role of Master Data in successful ERP implementations.
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