The implementation and maintenance of large-scale enterprise resource planning (ERP) software can require a million-dollar, if not multimillion-dollar, investment. Yet many companies invest in an ERPNext system without adhering to the same disciplines applied to other areas of their business.
Essential steps such as: risk assessment, benefit analysis, performance objectives and cash flows are typically discarded. In their place, expenditures are made based on naïve assumptions that the computer will magically transform a company into a paragon of efficiency. This misguided approach sets up a sequence of events that often leads to a failure of objectives. The resulting conclusion is that the ERP software was a bad investment decision.
As a business consultant, I am often asked to review a failed job card software implementation and determine the circumstances that led to its failure. Frequently, company management will conclude that the software doesn’t work or it is too complex to implement in their unique environment. Management further compounds the failure by claiming that the wrong ERP system was chosen, and if they had the “right” software package they could recapture their initiative and achieve their original objectives.
Yet, my experience is that the CRM software itself is rarely the source of failure. In fact, selecting the presumed “right” software package will most likely result in a second failure – this one even more costly than the first.
This article examines the real reasons why ERP systems fail and offers real world advice to help ensure that your implementation is a success.
Best Business Practices
hvac service software packages, even those that are industry specific, are designed for a large audience of companies looking to achieve success by following a template of best business practices. However, software often fails to achieve its promise due to the reluctance to change by people who have a vested interest in existing processes. This leads to costly program modifications to replicate those processes. This, in turn, can result in unnecessary manual tasks and issues of software maintenance, which neutralize the original benefits of the software.
When making your field service management software selection, examine the processes encoded in the software. If you can agree to model your company’s best practices based on those processes, you’re choosing the right solution. If you can’t, continue looking.
The Project Manager
Once the manufacturing software is chosen, it’s not uncommon for management to turn the project over to a subordinate to manage the implementation. The problem is that the subordinate, who is usually chosen from the end-user base or information technology department, typically isn’t given the authority to implement necessary business process changes.
Project management is a discipline, if not an art, which requires the ability to delve into detail while keeping a perspective on the original business objectives. The project manager needs to have the ability to overcome impasses through a judicious combination of political guile and management direction.
The most successful ngo accounting software projects are led by a member of the management team who has actively participated in the both the software selection and implementation efforts. When selecting your project manager, choose the one who has the most to gain (or lose) from the ERP system.
Implementation Budget
Once the project manager is selected, many companies tie their hands by under-funding their efforts or by limiting the scope through impractical project schedules. It has been my rule of thumb that an implementation budget should be a one-to-three-times multiple of the list price of the ehs software package. Budgets are variable based on the size of the organization and the package selected.
Tier 1 packages, should be budgeted on the upper end of the range due to their implementation complexity and the size of company that gravitates to that part of the spectrum. Other packages fall elsewhere on the range. Variations can occur as a result of the amount of outside consulting required and the geographical diversification of the company.
At a minimum, 5 to 10 per cent of the implementation budget should be set aside for a project management consultant. Many companies make the mistake of using the software vendor for this role. But the vendor is driven by installing the package and moving on, not by business process improvement. Furthermore, vendors do not have the resources and background to evaluate and recommend business process improvements and do not see this as their job.
The most significant cost of the ERP implementation is not the software, but the cost of the implementation. Budget accordingly.
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