Make ERP Do Its Job

“Life is so simple when you’re just doing your job.” Jeannette Winterson

Whether a full suite solution or “best of breed” approach, enterprise resource planning (ERP) systems (or more simply put, business systems) are necessary for all organizations to implement and maintain. ERP takes up large chunks of IT budgets and can be viewed as necessary evils. We’ve all heard the horror stories of $100 million-plus implementations that run over schedule and over budget.

There is technical hope. A new breed of ERP is coming to market, ranging from Workday to apps on the salesforce platform. With configurable interfaces and workflow, flexible data structures, and integration friendly approaches, they are compelling next-generation alternatives for the behemoth transactional systems based in late 20th century technology.

An overwhelming opportunity as CIOs, CFOs and their peers start to consider these next-generation systems is to – finally – make these business systems do their job. And in order to do so, the internal cost-center units who are the primary customers of these systems need to get serious about doing their job – drastically ratcheting up effectiveness and efficiency, and get better aligned with revenue-generating units. Further, ERP systems need to last in order to be worth the total cost.

Here’s a four-step process for getting the most out of a new ERP implementation.

1.     Process engineering. Don’t buy one byte of new technology without leaning out all the administrative processes. Such as: Budgeting, expense approvals, AR/AP, supply chain, personnel add/move/change. Investment in quality process work with an experienced partner can have exponential returns; you’ll gain fresh understanding of the as is, and have all the improvement opportunities arrayed.

2.     Avoid reconfiguration temptation. Newer ERPs have a lot of flexibility. A path of least resistance can be to let the existing process owners configure the system to re-pave the cow paths. This means spending a lot of money to do things the same way. Leverage the flexibility and functionality of the system to enable better ways of getting work done. If #1 is done well, #2 will be much easier.

3.     Face change management head on. New systems bring along unease – of reorganizations or lost jobs – or even worse, a repeat of the last agonizing implementation. Leaders need to understand the impacts of streamlined processes coupled with strong automation on the most important asset – people. Once you have better processes and a system prepared to streamline and automate those processes, you will be able to fully assess the change impact and establish a plan that is right for your organization.

4.     Measure, monitor, repeat. With crisply defined and documented processes, you’ll know what to measure, how and when – and therefore watch the positive results unfold. Fewer errors, faster processing, less resources producing more throughput. Many a leader has been undone by the “what did I get for $X million?” question from the CEO or board. Make sure you have quantitative answers.

Think of these 4 steps as 4 legs of a table – you need all four to get a stable and valuable base.

(Also, as covered in a previous blog, don’t underestimate the value of an RFP-like process to flush out the needs, wants and complexities.)

“Everything is created twice; first mentally and then physically. The key to creativity is to begin with the end if mind, with a vision and a blue print of the desired result.” Stephen Covey

Worth considering:

Even large successful companies like Nike and the US Air Force aren’t immune from ERP difficulties. Among the root causes:  insufficient governance and under-appreciation of complexity.

I usually don’t check a bag, but when I do on @Delta I love it that my bag updates me on its merry way through the baggage handling system, into the plane, and back out again.  #IOT

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