Enterprise Resource Planning (ERP) software is well known for its benefits. It unifies fragmented systems, and ensures that employees can access all the data (and insights) they need from one centralised system operating across the business, from product development to accounts payable.
Unifying systems ensures that employees use their time more proficiently and, of course, overall customer service improves because better data ensures you understand what your customers need and supports the efficient delivery of products and services.
Organisations around the world are very familiar with all the arguments supporting ERP projects, not least of all the urgent need for digital transformation. And yet, actually implementing successful projects remains elusive. Many leadership teams we engage with have had negative experiences and are weary of investing in ERP projects because they’ve seen how quickly they can spin out of scope, out of budget and not deliver on their promises.
Get ERP right and you can transform your business. Get it wrong and it becomes a costly exercise in wasted time and resources.
Here are 10 essential drivers that will help your ERP project stay on track and deliver the benefits you are looking for.
1. Ensure leadership from the CEO.
Unfortunately, CEOs rarely take a leadership role in transformational projects, particularly at a governmental level. However, in our experience, leaders who think of these projects as their legacies set the project up for success from the beginning. The rest of the organisation takes their lead from the top and adequate resources are focused on project implementation and change management, including human capital, time and the appropriate investment.
2. Set clear parameters and think of ERP as a disruptor.
ERP projects can be incredibly impactful but they also require a major and significant transformation of the business, not to mention the months of disruption that your entire team will feel during implementation. The most successful ERP projects we have experienced prepare the team for disruption, focus on change management as a priority and add resources to the business before the project commences, instead of after.
3. Focus on functional fit.
Choose an ERP solution that can be implemented without additional development to begin with. These solutions come with standard business processes, standard configurations and standard features that are a a strong fit for most businesses because they are based on best practice in your specific industry.
4. Engage your subject matter experts.
Engage the best representatives from across your different business units. They will understand what the business needs now and help shape what is required in the future, their expertise will help shape the ERP project. There’s an added bonus as well. There is a much higher chance of success when it’s clear that the changes the business is experiencing are for the good of the business and its employees. We only have one word of caution however: subject matter experts tend to be extremely busy already. It’s important to give them the time and resources to focus on the ERP project.
5. Understand your success criteria.
What is success? How will we define it? How will we track it? Success could look like this: We want to increase revenue by 30%, achieve 10% better customer satisfaction, increase productivity by 15% and reduce our workforce costs by 5%. Only once you have quantifiable benefits in place, can you determine how you will track results and immediately recognise if your project is creeping out of scope.
6. Conduct regular benefits analyses.
Benefits management is sometimes seen as what needs to occur after the project. ERP is a significant investment. It’s therefore critical to understand where you are willing to invest funds and where you will not invest funds. ERP can come with a lot of functionality that could may not necessarily add value to the business. The only way to determine this is through early and regular benefits analyses before, during and after the project. All benefits should be tracked at the process, people and technology levels. You also want a benefits realisation framework that is specific and detailed and that can be used to inform decisions around changes of scope, but it shouldn’t be so cumbersome that it isn’t used. Ideally, you want to be able to trace every project decision back to the original, pre-determined success factors.
7. Set up a clear project charter.
Everyone in the organisation must understand the overall purpose of transformation, where the organisation is going, why it is going there and how it will get there. A clear ‘as is’ state versus a future state provides a road map that employees can follow and believe in, which supports the change management necessary for ERP success. This includes how the project will be delivered, what the rules of engagement are, and what the expected behaviours are from everyone involved in the project. Project charters should also outline the methodology, tools, processes and systems that will be used.
8. Follow a strong and clear governance model.
A decision making team (or teams) should be in place to expedite decision making based on the original scope of the project. For example, a business process council and an enterprise architecture council can be set up to make decisions based on new information or requests to ensure that projects are not delayed and that all benefits are realised (within scope and budget).
9. Create centres of excellence.
As each module within your project is implemented, establish a centre of excellence to ensure that the momentum of the change is maintained. Ensure each CoE is made up of strong representatives (including both functional managers and business people) to ensure continuous improvement.
10. Treat ERP implementation as a change management exercise.
We’ve mentioned this point but we cannot emphasise it enough. Make sure you are bringing your people along on the journey. Keep everyone engaged, communicate well and regularly and have change champions in place. And invest in training. The most successful ERP projects include training in the budget. This will result in the project being pulled by the people in your business rather than being pushed down to teams. This is the opposite of a mandate from a project team or from a CIO. Instead, the business genuinely owns it and wants it.
Many organisations successfully transform their business enabled by the implementation of ERP solutions. However, success is not a one off, but a recognition that there is a real opportunity to embed a culture of continuous improvement across the organisation.
To continuously evolve and adapt is to sew the seeds of success. Visit allaboutXpert today to learn about the smart solutions that support your organisational change!