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.