🧮ERP: Implementations (Part XII: The Process Perspective)

ERP Implementations Series

Technology can have a tremendous potential impact on organizations, helping them achieve their strategic goals and objectives, however it takes more than an implementation of one or more technologies to leverage that potential! This applies to ERP and other technology implementations altogether, but the role of technology is more important in the latter through its transformative role. ERP implementations can be the foundation on which the whole future of the organization is built upon, and it’s ideal to have a broader strategy that looks at all the facets of an organization pre-, during and postimplementation. 

One of the most important assets an organization has is its processes, organization’s success depending on the degree the processes are used to leverage the various strategies. Many customers want their business processes to be implemented on the new platform and that's the point where many projects go in the wrong direction! There are probably areas where this approach makes sense, though organizations need to look also at the alternatives available in the new ecosystem, identify and prioritize the not existing features accordingly. There will be also extreme cases in which one or a mix of systems will be considered as not feasible, and this is an alternative that should be considered during such evaluations! 

An ERP system allows organizations to implement their key value-creation processes by providing a technological skeleton with a set of configurations and features that can be used to address a wide set of requirements. Such a framework is an enabler - makes things possible - though the potential is not reached automatically, and this is one of the many false assumptions associated with such projects. Customers choose such a system and expect magic to happen! Many of the false perceptions are strengthened by implementers or the other parties involved in the projects. As in other IT areas, there are many misconceptions that pervade. 

An ERP provides thus a basis on which an organization can implement its processes. Doing an ERP implementation without process redesign is seldom possible, even if many organizations want to avoid it at all costs. Even if organization’s processes are highly standardized, expecting a system to model them by design is utopian, given that ERP system tends to target the most important aspects identified across industries. And thus, customizations come into play, some of them done without looking for alternatives already existing in the intrinsic or extended range of solutions available in an ERP’s ecosystem. 

One of the most important dangers is when an organization’s processes are so complex that their replication in the new environment creates more issues that the implementation can solve. At least in the first phases of the implementation, organizations must learn to compromise and focus on the critical aspects without which the organization can’t do its business. Moreover, the costs of implementations tend to increase exponentially, when multiple complex requirements are added to address the gaps.  Organizations should always look at alternatives – integrations with third party systems tend to be more cost-effective than rebuilding the respective functionality from scratch! 

It's also true that some processes are too complex to be implemented, though the solution resides usually in the middle. Each customization adds another level of complexity, and a whole range of risk many customers take. Conversely, there’s no blueprint that works for everybody. Organizations must thus compromise and that’s probably one of the most important aspects they should be aware of! However, also compromises must be made in the right places, while evaluating alternatives and the possible outcomes. It’s important to be aware of the full extent of the implications for their decisions. 

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🧮ERP: Implementations (Part VII: The Process Seems to be Broken)

 

ERP Implementations Series

Participating in several ERP implementations, one has the expectation that things will change for the better when moving from one implementation to another. Things change positively in certain areas as experience is integrated, though on average the overall performance seems to be the same. Thus, one may wonder, how can this happen? Of course, there are so many explanations - what went wrong, what could have been done better, and the list is usually quite big. However, the history repeats in the next implementation. Something seems to be broken, or maybe this is the way implementations should work, though I doubt this!

An ERP implementation starts with a need and the customer usually has an idea of what the respective need is about. It might even have a set of high-level or even low-level requirements, which should be the case when starting on such a journey. Then the customer selects an implementation partner, event followed by a period of discovery in which the partner learns more about the business including the overall infrastructure, business processes, data and people. Once the requirements are available, the partner can evaluate them to identify the deviations from the standard functionality available and that translate into customizations, sketch solutions, respectively make a first estimate of the costs and resources needed.

Of course, there can be multiple iterations of the process in which the requirements are reviewed, reevaluated, justified, prioritized by all parties and a common understanding, respectively an agreement on the scope and expectations is reached. In the process some requirements are dropped, others are modified or postponed for a later phase or later phases. The whole process can take a few months, though it’s mandatory for creating a workable estimate used as basis for the statement of work and the overall contract.

In parallel the parties can also work on a project plan and agree upon a project methodology, following that once the legal paperwork is signed, resources to be allocated to the project. A common practice is then for the functional consultants to generate based on the requirements a set of documents - functional design documents (FDD), process diagrams - that should be used as basis for the setup, for programming the customizations and User acceptance testing (UAT). Of course, the documents need to be reviewed by the business, gaps or misunderstandings mitigated, and this takes several iterations until the business can sign-off on the respective documents. It’s the point where the setup and programming can start, usually half a year, or even a year or more after the initial steps.

Depending on the scope, in the best-case scenario the setup will take one to two months, at least until having a system ready for UAT with business data as needed for Go-Live. The agreed customizations can translate in further months and effort not only for programming, but also for testing, reviewing and further mitigations. This would be the time when many of the key users see for the first time a working version of the system, which frankly might be too late. Of course, they read and reread the FDDs, though until this point everything was very abstract and no matter how good such documents were written, they can’t replace the hand-on experience with working with the system, discovering the functionality, understanding how it works.

In the best-case scenario, the key-users are satisfied with the results and the UAT, respectively Go-Live can go on as planned, however the expectations for first time right are seldom (never) met. Further iterations and delays are then involved. Overall, the process doesn’t seem to be efficient!

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