The 'Joy' Of Enterprise Systems Implementations Part 4: User Recommendations




The 'Joy' Of Enterprise Systems Implementations

Part 4: User Recommendations

P.J. Jakovljevic - July 12, 2002

Executive Summary

What has long been a general feeling based on rumors, news headlines and some casual survey reports hidden within analyst houses' vaults and largely inaccessible to mass audience owing to exorbitant subscription fees, has recently been confirmed in a more tangible manner. Namely, many major companies are still having difficulty achieving effective enterprise resource planning (ERP) systems even after a full year of implementation, according to the report titled ERP Trends (Research Report 1292-01-RR) and released several months ago by The Conference Board, the premier business membership and research network worldwide, which links executives from different companies, industries, and countries. The general feeling is that the situation can be mirrored across the entire enterprise applications space.

This is a four-part note. Part One summarized a report titled ERP Trends by The Conference Board. Part Two commented on the major key success factors (KSF's) for enterprise applications projects. Part Three discussed the causes of enterprise systems implementation failures. This Part contains User Recommendations based on this information.

User Recommendations

In order to learn from others' mistakes, companies that are contemplating enterprise applications implementation in the future would benefit from perusing the report thoroughly. The report might be useful for both content existing users and the implementation causalities' from the past too, though, as they have embarked on a never-ending journey and need to beware of repeating the past mistakes. As stated in the report, there is no hard stop since ERP is continually evolving to meet demands for additional functionality, capability, and expanded deployments throughout the company and beyond, as also seen in Where Is ERP Headed (Or Better, Where Should It Be Headed)? Part 1: Functional Scope and Vertical Focus and 'Collaborative Commerce': ERP, CRM, e-Procurement, and SCM Unite! A Series Study.

The old adage is "Such a beginning, such an end", and, consequently, many failures could be traced back to a bad software selection. The foundation of any enterprise application implementation must be a proper exercise of aligning customers' IT technology with their business strategy, and subsequent software selection. This is the perfect time to create the business case and energize the entire organization towards the vision sharing and a buy in, both being the KSFs (Key Success Factors). Yet, these steps are very often neglected despite the amount of expert literature and articles that emphasize their importance.

Given that within a specific client size range and vertical industry, many renowned applications packages are reaching a functional parity (convergence), users might be better off by skipping the painstaking process of RFP preparation, staring confusedly at vendors' responses, and trying to figure out who has the most pluses regardless of the individual importance of the functionality criteria. It is better for organizations to focus on a handful of he business objectives they need to achieve and the ways to measure their success. They may benefit from turning to an objective third party expert that has an ability of translating these strategic business objectives into tactical functional and technological requirements, and, in almost no time at all, recommend only two or three most suitable candidates that should proceed straight to a software demonstration phase (see Knowledge Based Selections).

To that end, TEC's ERP Evaluation Center at http://www.ERPevaluation.com includes a comprehensive set of 27 request for information (RFI) responses from leading vendors combined with a decision support tool to reduce the time and expense of examining vendors and determining the short list, while vendors and/or system implementers can check out how they stack up against the competition and what the best course of action in every particular situation should be.

As a summary, the following are some of the main mutual benefits that all the parties would benefit from being on the same page':

  • Upfront identification of issues and negotiation perspectives, enabling more efficient and productive negotiations

  • Enabling the solution implementers to be better aware of the challenges

  • Enabling vendors to be aware of product gaps with client needs

  • Manage expectations of the implementation results to be realistic

  • Enable better implementation planning

  • Enable future project discussions between the vendor and client to be processed more effectively, since past data is intact and in a form that is reusable and can be updated easily.

Users are thereafter advised to conduct a thorough analysis of vendor strengths and weaknesses in the following major areas: product total cost of ownership (TCO), corporate strategy, corporate viability, and corporate service & support. The above high-level evaluation of product functionality and technology should therefore be replicated and expanded upon for the remaining key criteria areas. Finally, only by a diligent process of evaluation that includes a plethora of other factors influencing the decision such as scripted scenario demonstrations, site reference visits/calls outcomes (see Client References - Still A Valuable Part of Vendor Selection?), product flexibility (e.g., customizability, interconnectivity, data conversion, etc.) can users hope to select an enterprise business system that will serve their organizations and deliver expected benefits. These are, however, more of a soft', subjective nature, and require an actual encounter with the software; this is where the human side will get the right of way over machine in the above-mentioned human-machine combination. For more information, see An Overview of the Knowledge Based Selection Process.

Researching Functional and Technical Capabilities

However, one has to start from somewhere, and there is no better place to start researching enterprise software than from their functional and technical capabilities. Despite the fact that these capabilities have been converging across the range of products, and that their importance in selecting enterprise software has been diminishing by the day, that is not yet the case. Even in a hypothetical case of two vendors differing by only a few percentage points of required functionality, it is very likely that these the differences will carry a significant weight and could signal a requirement for an extensive modification effort and expense.

Do you really need a sexy piece of technology that has missing functionality and will not cater to your business needs without significant modifications and system tweaking? On the other hand, basing a decision only on product functionality may result with buying a system that will soon become obsolete. Advanced technology bolsters product flexibility, and often can provide tools that can circumvent the need for expensive modification.

The scripted scenario demonstration phase of an enterprise system selection process is the perfect opportunity to put candidate packages through their paces, and TEC urges users to exercise this prerogative. However, instead of letting vendors take the charge of the demo and show you their dog and pony' shows, insist on vendors unequivocally showing you how their system will help you achieve the desired objectives (see Demonstration Post-Mortem: Why Vendors Lose Deals).

Current enterprise systems users, which, for whatever reason (e.g., process improvement, harnessing the latest technology, deploying new collaborative functionality, etc.) may consider systems upgrades may want to back up their rationale by perusing The Old ERP Dilemma: How Long Should You Pay Maintenance? and The Old ERP Dilemma - Should We Install The New Release?

Finally, users are strongly advised to require fixed time and cost contract commitments from both vendors and their affiliates. Remain firm on the value proposition you identified and do not fall prey to euphoric vendors sales representatives' attempts to sell you more functionality than you need, particularly if that is only at the vaporware' or brochure-ware' stage.

Conclusion

System integration service provider selections and project planning should involve the same amount of due diligence as business IT strategy definition and software evaluation. Users involved in selections or early project planning should seek expertise from professionals who understand the pitfalls of implementations and can offer guidance. Experienced consultants can also help determine which system customizations to keep, which to further update, and which will be rendered obsolete by new/upgraded system. Still, the implementation team should ideally remain intact in-between upgrades to curb costs and to maintain internal competencies. Otherwise, the enterprises will risk experiencing Hershey's Halloween nightmare or Allied Waste Industries' garbage within their environment.

This concludes Part Four of a four-part report. Part One summarized a report titled ERP Trends by The Conference Board. Part Two commented on the major key success factors (KSF's) for enterprise applications projects. Part Three discussed the causes of enterprise systems implementation failures This part contained User Recommendations based on this information.

 
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