Make sure you know the top ERP success factors
before your start the project!
So, you’re planning an ERP implementation and you figured it’s not as easy as some think? You’re right. There’s a lot to do, plan and figure out.
Luckily for you there are some proven ERP success factors that are sure to put you on the right track. This article lists the 5 main factors that will limit the risks you take (because yes, there is a lot of money involved!)
There are so many ERP success factors that we could develop for hours , but in this article we’ll limit ourselves to the 5 most important, the ones that have the biggest chance to make your implementation project a success.
I’ll start this article with a bad news… Your chances of failing your ERP project are higher than you think.
An ERP implementation project requires a lot of energy, understanding of the business, involvement and flexibility. This puts a toll on any business and it is, even with the best people in place, a process that is risky.
The good news? If you are honest with yourselves and actually look at the company’s processes, its flaw and its needs correctly, you’ve just put the odds back in your favor. And you’ll get a much more productive and efficient business after!
Top 5 ERP Success Factors
#1 – Involvement, involvement, involvement
Involvement is the main success factor in an ERP implementation. And when I say involvement, I mean involvement from absolutely everyone: the higher management, middle management and employees of all levels. Often I’ve seen a company getting involved at some level but not the others. That’s always a recipe for disaster. Especially if only the higher management is involved (it’s often the case…).
Everyone should be involved!
Let me repeat: Everyone should be involved to make the ERP project a success. I’ve seen a company where higher and middle management decided everything – with the best of intentions. They knew the business and were the best ones – they thought – to know what they needed. After all, the president and the two VPs where the founders. Was the project a success? Not at all…
Because once they started implementing the software, the employees started noticing that a lot of needed functions were missing. The sales representative couldn’t check the credit rating of their clients before making a quote, the shipping manager couldn’t see in advance the shipments he should receive the next week, the production manager couldn’t easily transmit the production changes to the floor, etc. All that had to be done manually or in a way that was much more complicated than before.
Was it a good system? Yes.
Was it a good system for them? No.
After a few months, managers simply decided to cancel the implementation and start again. What went wrong here? The management did know their business and they did understand how it worked. But since they didn’t consult the employees that actually did the work, they missed a lot of needed features that were rather minor when all taken separately… But when put together, the employees felt they were moving backward from the old system. A killer for an ERP implementation….
How to make this an ERP success factor?
Everyone has their role in an ERP implementation. The higher manager must provide the long term view – 3 to 5 years – and make sure the project is a priority. The middle management the operational view and the support. The employees must provide the details of the process and test the system.
Make sure everyone is involved and give their input. Just by doing that your chances of success are much higher!
#2 – Know your business process
Sure, the management always knows – or assume they do– the business processes.
Sometimes they do – usually in very small businesses – but more often they only know it at a higher level. The nitty-gritty of the business process is normally known by the employees and, sometimes, by the middle-management. And each employee knows its part of the process, which sometimes contradicts what the person next to them will understand.
Thus, the importance of mapping carefully your business process as one of the ERP success factors.
Let me give you another example.
On a project I was part of, we worked really hard with the employees to make the project work. The management ‘simply’ wanted a program that could allow them to manage their supplying. They didn’t have time to manage the project and didn’t really have time to get involved in the implementation. They quickly chose a software that seemed to fill their ‘small’ business need. Of course I warned them that it was not the way to implement such software, but due to budget and time restriction, they still went forward.
… they just assumed they knew the requirements…
Since the management didn’t really know what the operational employees were doing, they ‘assumed’ the process and the software was chosen based on these assumptions. No need to tell you that this is a recipe for disaster…
Long story short…
After a short while, when we noticed that the ‘assumed’ business processes weren’t the actual ones at all, the implementation team decided to work with the employees to map the ‘real’ process and eventually to try to remodel the software to fit that process.
We worked really hard to make it work as needed by the employees and as requested by the management, but at some point we noticed that there were major discrepancies between both views that could only be solved by rethinking the business processes and choosing a more suitable software.
Because what the management never noticed was that everything was very manual and that the employees were correcting the mistakes made earlier in the process. They thought the process was very straight forward when in fact it wasn’t at all.
Something, again, that is a killer in an ERP implementation. Which it was…
How to make this an ERP success factor?
Take your time in reviewing your business processes before choosing any software and make sure that the person doing the work is actually the one reviewing it. Once you are certain of the processes, it will be much easier to see the strengths and flaws of an ERP software and then to choose the right one.
#3 – Be flexible and handle change management
Another essential ERP success factor is to handle change management. You won’t be able to keep the exact same process you had before. For sure, changes will be needed.
That will make people unhappy and uncomfortable, but if the project starts and everyone has flexibility in mind, it will help a lot when someone has to make a compromise for the greater good.
Everyone has their habits, I have mine, my wife has hers, and you have yours. Ever wondered why everyone in a class or in a meeting always sits on the same chair week after week? People like routine, it feels comfortable and reassuring. When suddenly someone sits at the desk you were at the last 3 months, it feels somewhat uncomfortable. Imagine when it’s a routine you’ve been doing for years, more than 40 hours a week…
That’s why change management is so important. Everyone has to understand that routine will change and that some employees will have to be more flexible than others.
Sometimes the ERP will bring more work to some people, but overall, it will help much more than it cause problems.
How to make this an ERP success factor?
Understand that changes will bring discomfort. The goal is that the ERP bring more – much more – positive changes than negative. If everyone stays flexible in their requests and management makes sure that they listen and handle change management, the project is heading the right way.
#4 – Communication
As with human relationships, communication is another major ERP success factor.
Before the implementation
Between how each employee does its daily job, how the management thinks it should work and how it actually works, there is sometimes a major gap.
You have to discuss that gap, address and understand it before implementing an ERP. Otherwise, when the users will actually start using the ERP, the usefulness of the system will be greatly reduced. That’s why communication in that kind of project is essential.
A lot of discussions must take place regarding how each department works, how it should works and how it will work.
Sometimes it’s easy, sometimes it requires a lot of effort. Especially in companies that never optimized their processes. But in all cases, the return on investment is huge!
During the implementation (and after)
During and after the implementation, communication is even more important.
Is the software really doing what we thought it would? How can we correct those mistakes? Is there anything we can do to improve the processes and to facilitate everyone’s job?
When communication is free-flowing, the software is usually even more useful to a company. Repetitive jobs are eliminated, employees can focus on value-added work, management has better reports, etc.
How to make communication an ERP success factor?
Make sure communication is good throughout the project. Name a manager that will be responsible, that will talk to everyone involved in the project to make sure their needs are taken care of and understood, that the higher management is still following closely the project, that needed changes are followed through, etc.
ERP Success Factor #5 – Take your time
This kind of project requires more time than you think. Implementing a single system that manages the whole company is not a small task.
Take your time.
Especially when doing the business analysis and ERP selection; you will be stuck with this system for a long time and will invest a lot of money in it, so you better take your time now than regret your choice later.