Business leaders pondering the challenges ahead as their organizations begin implementing Enterprise Resource Planning (ERP) software experience a range of thoughts and emotions. In these situations, well-worn clichés such as “adapt or perish” and “change or die” often seem magnified.
How is that different from any other challenge you’ve faced? Remember, you’ve been playing the “survival” game every single day since your business opened its doors and welcomed its first customers.
The process of transitioning to a Cloud-based ERP system has (justifiably) developed a reputation for being a complicated process: one that involves sophisticated software and detailed planning. Yet at its core, ERP implementation is about people working together. That being the case, this kind of digital transformation is only possible with the support of your employees.
Consider how and why you now stand at the ERP starting line. Perhaps your organization recently merged with another that has already discovered ERP success? Maybe your operations have outgrown the capabilities of your current software? Did “word-of-mouth” testimonials from your peers make you reconsider the potential advantage of ERP on your own operations?
These are all possible scenarios…but it’s more likely that your customers, your employees, and future job candidates are demanding digital transformation – away from costly onsite servers and toward remote/Cloud-based operations.
We live in an On-Demand world where information is shared with a click. Your customers are demanding better services more quickly. And younger employees entering the workforce are quick to embrace new technologies – especially those that fit their desires for a better work/life balance. Ignore these trends at your own risk.
The “Hybrid” Model
ERP has proven itself to be an industry disruptor, but it is also dynamic enough to be tailored to your specific needs. Organizations with extensive industry experience and highly-trained, effective staff often employ a hybrid approach that incorporates the benefits of Cloud-based ERP to improve customer service and operational efficiencies.
At its core, the hybrid model is the result of leaders deciding that, for whatever reason, they are unwilling to embrace wholesale change. That’s OK. It’s also effective, when done properly. We have worked extensively with these types of legacy companies who seek a “best of both worlds” approach (apologies for yet another cliché) that leverages the talents of your people with the capabilities of ERP systems.
Throughout the planning, development, and implementation phases, it is essential to identify the optimal balance between existing staff and new technologies. It’s the only way to make sure you fully achieve your stated goals. It helps to have a checklist.
Define the Objective
Picture a best-case scenario for how ERP will transform your organization – and, in particular, how your employees will be more productive – and then work backwards from there. It’s all too easy for organizations to embrace technology that doesn’t necessarily fit their needs, or simply begin finding ways to adopt small-scale operational improvements for the sake of it (e.g. without clear goals).
Doing so increases the risk of isolating of specific divisions or departments from one another, which makes it more difficult to integrate new technologies throughout the enterprise.
Secure Executive Support
Successful ERP implementation cannot happen without strong executive commitment and support. Innovation often occurs organically throughout an organization, but executive buy-in ensures innovation across enterprises.
We’ve seen horror stories where CEOs become enamored with the promise of ERP, tell their middle managers to make it happen, and then don’t bother checking in for another 6 – 12 months. When they finally do, the program bears no resemblance to what they envisioned. That’s when organizational morale takes a hit and people lose their jobs.
Gain Employee Buy-In
Executive-level buy-in is critical to achieving success but having the support of employees and staff makes the process much smoother. One way to “sell” your team on the benefits of ERP is to remind them that its purpose is to make their jobs easier.
“When used as a tool to supplement day-to-day business processes, ERP systems can provide substantial benefits,” explains Lisa Anderson, MBA, CSCP, CLTD, founder of Claremont, CA-based LMA Consulting Group. “The most frequent benefits our customers experience include the automation of routine tasks, significant improvements in process flow and efficiencies, improvements in service levels to customers, and better information and reporting for decision-making.”
Work with an ERP Partner Who Understands Your Organization
There are two ways to approach ERP: installation vs. implementation. System installation is a one-step process that often leaves the end customer (you) to figure out how to make it work. Implementation, meanwhile, involves highly-skilled partner/providers working closely with their customers (again, you) to:
- Build a system best-suited to your specific needs.
- Test it thoroughly.
- Provide training for the employees who will operate it.
System configuration and testing are complex steps, and you’ll benefit from the knowledge your provider brings. Proceed with caution and deliberation. In fact, Ms. Anderson points to “a few key steps that must occur if you’d like to go ‘live’ without imminent disaster:”
- Align the ERP system’s functionality and training with the organization’s day-to-day routine.
- Simulate a regular work cycle with typical customer orders, production schedules, inventory checks, etc.
- Make mistakes on purpose to “break” the system. This helps organizations learn how to back out of errors and gain an understanding of down-the-line impacts.
Some systems, like Infor, have programs like the Infor Alliance Partner Program to certify valued partner / providers for the implementation phase. Oracle NetSuite has the Oracle NetSuite Solution Provider program for this purpose.
Don’t Cut Corners
“ERP implementation always takes longer and is more complicated than it appears during the planning stage,” Ms. Anderson adds, noting that it may be tempting to cut corners in order to meet expected benchmarks.
“Project leaders start to feel pressured to make quicker progress and keep the project on track, whereas employees realize how challenging it is to simulate ‘a day in the life’. Unfortunately, this can lead to shortcuts” that dilute the software implementation’s effectiveness.
On the other hand, there is also danger in being too cautious.
“If project members have been through a horror story in their past, they might go overboard in testing and simulations,” Ms. Anderson says. “You must realize that it is not the number of tests performed that matters most, but the quality of those tests and the level of your team’s involvement.”
Within that framework, always remember the critical link between ERP functionality and its impact on day-to-day operations. “Training alone will not cut it!” Ms. Anderson concludes. “To succeed, you’ll need to bridge the gap between ERP system tasks and an organization’s day-to-day functioning.”
There are clear risks. Research completed by LMA Consulting Group indicates that only 20% of ERP implementations fully achieve desired results. However, if done properly, ERP implementation can transform a company’s operations. Make sure you work with a group that is fully-vested in your success and will do what it takes to help reach your goals.
A successful transition to Cloud-based ERP systems will have a profound impact on your organization’s day-to-day operations. For legacy enterprises in particular – those who seek a balance between ERP operational efficiencies and the advantages of highly-skilled employees – the promise is matched only by the potential peril. The path to success involves identifying clear goals, securing strong executive backing, gaining the support of the employees who have made your business a success, and partnering with a trusted ERP service provider.