Page 39 - MetalForming September 2013

fail to deliver at least half of the antic- ipated business benefits.
These figures should serve as sober- ing reminders to any leadership team believing that an ERP implementation will be a success just because they want or need it to be.
3) Business process improvement should start before—not after—imple- mentation begins.
While business process manage- ment, optimization and reengineering all encompass different activities and occur at different stages in the proj- ect, the key is to start focusing on improving business processes prior to implementation. The last thing a com- pany should do is purchase a new ERP system and use it to “pave the cow- paths” of what your employees have always done.
On the other hand, organizations also are remiss in thinking they will throw out all of their processes and completely adopt the new ERP system right out of the box. Both approaches are flawed and typically lead to poor realization of benefits. Instead, start an implementation project by docu- menting current processes, and determining which processes pro- vide competitive advantage to the organization. Those areas that are fairly rote, such as accounts payable or human resources, certainly can be adapted to off-the-shelf functionality. However, the processes that provide your com- pany its edge must be improved and protected. It’s a long and complex undertaking, but one that will deliver the greatest long-term benefits.
4) ERP-software best practices and preconfigured solutions do not solve all of the challenges of ERP.
We never recommend that an organization adopt all of the best prac- tices touted by an ERP vendor. This homogenization will strip your organ- ization of its unique attributes. When going through software demonstra- tions, remember that it’s the job of the software vendor or reseller to sell you the software, and (if you give them a fixed-bid implementation contract) then implement it as quickly as possi-
ble. Although the fastest way is to shove it in out of the box, this won’t in any way lessen the challenges of actually using the system to gain business benefits.
Our advice? Carefully consider all of the processes your company cur- rently employs, should employ and will employ in the future, and assess each best practice as an option—not a fore- gone conclusion.
5) Your project will fail without adequate organizational change man- agement.
Sorry to be so blunt, but it’s true. Panorama has discovered that the most common cause of ERP failure is lack of strong organizational change man- agement (OCM). If your employees, including executives, managers and
tem are misaligned, it’s probably not the software’s fault.
While its tempting to blame a new ERP system (or the team that imple- mented it) for every operational issue, the truth is that poor alignment over time results directly from not continu- ally investing in ERP maintenance and performance improvement. ERP imple- mentation does not end at go-live. Your company likely will change dramati- cally over time, and so it must develop a plan to continually assess ERP-system use, capabilities, businesses processes, new requirements and key perform- ance indicators, and adjust or cus- tomize as needed.
7) Most ERP implementations do not properly define the finish line.
As noted, the finish line is not the day of go-live. In fact, go-live should be considered the end of only the first phase of implementation. Phase Two includes adding advanced modules, functionality and third-party additions. These steps will enhance reporting and analytics, and further improve busi-
ness processes. Then, Phase Three focuses on fine-tuning business processes and achieving full func- tionality and superior analysis and
execution capabilities.
Don’t set your team—and your
organization—up to realize poor busi- ness benefits by communicating the expectation that everything will be done at go-live. Friends, the work is just beginning.
8) Most organizations strive for no customization, but most fail to do so. I can’t count how many implemen- tations we have been involved with that have started with the idea of no customization. After sitting through the seductive vendor sales demos, it’s what any reasonable person would expect, want and think best. But this expectation often is unrealistic and merely creates more organizational change management. Our research shows that 90 percent of organizations end up customizing their ERP soft- ware. So, enter into the project knowing that customization is likely, and know- ing which processes you want to shield
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end-users do not support the project, do not understand the benefits the new system can bring, and are not ade- quately trained, supervised or provid- ing supervision, your organization will end up with a multimillion-dollar ver- sion of Excel.
But just as poor OCM can quickly derail a project or post-implementation system use, a strong campaign can pay dividends for years to come. We fre- quently are troubled to see organiza- tions choose to cut their OCM budgets when in reality they should be invest- ing the bulk of their time and energy into ensuring their people understand, believe in and are excited by the oppor- tunities the software will bring.
6) If your operations and ERP sys-