ERP Trivia - Every Why Should Have Its Wherefore Part 3: User Recommendations

Part 3: User Recommendations
P.J. Jakovljevic - August 31, 2001

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 the mass audience owing to exorbitant subscription fees, has recently been confirmed in a more tangible manner. Namely, many major companies are having difficulty achieving effective enterprise resource planning (ERP) even after a full year of implementation, according to the report titled ERP Trends (Research Report 1292-01-RR) and released at the end of June by The Conference Board, the premier business membership and research network worldwide, which links executives from different companies, industries, and countries.

About this note:
This is a three-part note. Part One summarized a report titled ERP Trends by The Conference Board. Part Two commented on the major key success factors for ERP projects and on the causes of ERP 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 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, as also seen in Where Is ERP Headed (Or Better, Where Should It Be Headed)? Part 1: Functional Scope and Vertical Focus.

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 ERP 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. 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 the handful of business objectives they need to achieve and the ways to measure their success. They may benefit from turning to an objective third party expert who is able to translate 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. The organization can then proceed straight to a software demonstration phase (see Knowledge Based Selections).

The scripted scenario demonstration phase of an ERP selection process is the perfect opportunity to put candidate ERP packages through their paces, and TEC urges users to exercise this prerogative. However, instead of letting vendors take 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).

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.

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. Otherwise, they risk experiencing Hershey's Halloween nightmare or Allied Waste Industries' garbage within their environment.

This concludes Part Three of a three-part report. Part One summarized a report titled ERP Trends by The Conference Board. Part Two commented on the major key success factors for ERP projects and on the causes of ERP implementation failures. This part contains User Recommendations based on this information.