ERP Requirements Refinement

72% of ERP projects fail in one or more three key dimensions: cost, duration, and/or realized business benefits. Those trying to select and implement ERP software are faced with high hopes and great expectations, only to face significant challenges and some bad decisions along the way. It is clear that “mismanaged expectations” is a key driver of ERP failure. 25% of ERP Users over the world cited “realistic ERP implementation expectations” as the most important requirement to avoiding failure. The good news is that there are some lessons to keep expectations aligned with reality. It’s important to watch for the pitfalls and landmines that often lead to unrealistic expectations. For example, how many of the following statements sound familiar? ·          “We’ll get this implementation done in no time.”  Software vendors and consultants are notorious for over-simplifying the implementation process. Most sales reps don’t know (and ...

Return on Investment (ROI) is one of the most important considerations for the company management. After all, any investment must yield some value to be worthwhile. But what about the ROI of an Enterprise Resource Planning (ERP) system? Understandably, management may be hesitant to invest in a costly software solution like ERP. Like any new technology, ERP systems  take time to implement  and require all workers  to be adequately trained . Is the value of ERP really worth the cost? Answering this question comes down to understanding two things: what kinds of value ERP brings to your company and how to attach a dollar amount to them. In this post, we’ll cover both. Adding Value to Organization Before understanding the value of an ERP solution that brings to the organization, first there is a need to understand where the existing challenges and pain points persist. When weighing the potential areas where ERP will bring value to the business,  one ...

Ask most companies and you’ll get the same answer. The ERP software upgrade process is both disruptive and expensive, especially for those companies that have modified their legacy ERP solution. Research backs this up; please note that a survey of 878 companies revealed that the average upgrade cycle is 3.5 years. Not So Timely Releases Most ERP vendors issue major upgrades “releases” every 12 to 24 months with minor code shipments on a more frequent schedule. As a result, the ERP user company tends to skip major releases on a regular basis, depriving themselves of fixes, improvements and new functionality that they are paying for with their annual maintenance fees. Additional Burdens Even without modified code, the upgrade process is still burdensome. Expensive IT resources are needed to apply the release. User retraining and/or procedural changes might be required to accommodate changes in functionality. Companies may not be interested in, or have...

It’s no secret that most ERP systems fail to deliver the business benefits anticipated by the organizations implementing the software. 50-percent of organizations fail to receive at least 50-percent of the expected business benefits from their investments in enterprise software. Adding insult to injury, and as outlined in our blog last week, is the fact that most organizations experience a misalignment between their business operations and ERP systems, which typically worsens over time as the companies go through acquisitions, international expansion, supply chain reorganizations, and other changes. The reasons for the failures to achieve business benefits as well as operational misalignments with ERP software often point to business processes. As opposed to incorporating process best practices in their ERP systems, most ERP vendors and system integrators use the flawed practice of designing and configuring the software to handle a hodgepodge of transact...

Multisite ERP implementations are not at all unusual. Unless you work for a small, local company, chances are your business is spread across multiple locations. About 50% of organizations implementing ERP software have four or more sites undergoing deployment. Multisite implementations can be arduous and intimidating so a solid integration strategy – decided upon early in the process – is necessary in order to achieve expected business benefits and high ROI from your ERP software. Integrating your organization’s ERP system across multiple locations can improve data accuracy and accounting projections and slash the cost of invoice processing. An integrated system allows users to scan and email invoices, creating electronic versions of scattered paperwork. ERP system integration also enables shared data from any department to be immediately synchronized across all departments and all sites. Following are three common challenges of multisite implementations w...

Those of us that have been involved with ERP projects know what it’s like to experience the thrill of an ERP go-live. It’s exciting, confusing, difficult, and full of opportunity, all at the same time. While it may be a huge step in a long battle, it is by no means a final step. It seems that many project managers use the go-live date as their primary milestone and key measure of success. However, just getting to the go-live date on-time and under budget is just one piece of the ERP benefits realization puzzle. ·          What about the effect the new system has on the organization? ·          Are people using the system effectively? ·          Is the software making the business more efficient? ·          Is it adding value to the organization? These are many questions that go unanswered until well afte...

In addition to budget, time and scope overruns, lack of realized business benefits can be one of the most frustrating parts of an ERP implementation. Hundreds of ERP implementations worldwide reveal that a majority of organizations fail to achieve at least half of the business benefits that they expected. In addition, the feedback of manufacturing, distribution, financial services, government and healthcare organizations across the globe validate that ERP benefits realization can indeed be a disappointment. Despite the challenges, ERP benefits realization doesn’t have to be impossibility. At the same time, it also doesn’t have to be an all-or-nothing proposition. There are a number of ways that organizations can go after the “low-hanging fruit” of potential ERP business benefits to start realizing their return on investment sooner: 1.   Carefully manage total implementation costs.  One of the most immediate ways to optimize the ROI from your ERP impl...

An ERP system (or enterprise resource planning) is a platform for gaining and sustaining business excellence. Excellence in business is more important than ever in a global economy where international competition is intensifying and holding on to a competitive advantage is increasingly difficult. When properly selected and implemented, an ERP system can enable business excellence in areas that include: ·          Excellence in Financial Management and Compliance ·          Operational Excellence ·          Business Process Excellence ·          Knowledge Management Excellence ·          Teamwork and Collaboration Excellence Let’s take a deeper look into each one of these areas of excellence. Excellence in Financial Management and Compliance Great financial management...

No ERP implementation is successful without focused, comprehensive end-user training. No matter how bright you think your people are, no matter how adaptive everyone is to changes and new technologies, there just is no way of getting around it: your staff needs to be trained and then trained again and finally trained some more. Following are a handful of tips to help get your training program off the ground: ·          Allocate enough time.  ERP initiatives frequently go over both budget and anticipated duration. By the time training rolls around, organizations can be in a rush to get the project done and behind them. Unfortunately, this is the worst time to start cutting corners. Plan to begin training at least 60 days before the ERP system switchover. ·          Leverage internal resources.  Your super-users and subject-matter experts are critical to training success;...