Thoughts on Implementing New ERP Solutions
Implementing a new Enterprise Resource Planning (ERP) tool is an extremely complex project that necessitates combining technology capabilities with business needs to create well defined and measurable business processes that will have a significant organizational change impact across every facet of an enterprise.
"A successful ERP implementation will ensure that the organization and its employees are sure of how they should perform their daily critical jobs"
In broad terms, there are three possible scenarios for a new Enterprise Resource Planning implementation. Each carries with it various complexities and challenges. Probably the ‘easiest’ is moving from one version of an ERP to another version from the same vendor. While new features and functionalities will still be challenging, a common language and terms that describe the ERP will generally have already been established and many things can be mapped forward since the origin and destination are known. The next major scenario is moving from one established ERP vendor platform to a different ERP vendor platform. This is a very challenging implementation mode since everything will be in a different place and a new organization language will need to be learned. The implementation is facilitated because the existence of an established ERP means that many of the critical business processes have been normalized and to some degree defined. By far the most challenging is moving from a ‘home grown’ ERP to an established vendor ERP. The flexibility of the existing solution is likely very accommodating and every business process will have to be analyzed and understood. New rigor surrounding how things will function will make the new ERP appear cumbersome and finding critical information will be challenging. The journey will be well worth it, but the challenges should not be underestimated.
After more than 20 years of using custom developed disparate systems, the city of Saint Paul, MN, decided in 2008 to pursue a new ERP. The main drivers for a new ERP were transformation, improved accuracy and consistency, better analysis and decision making capability, and improved data sharing with other critical line of business applications. After an evaluation period, the Infor Lawson platform was selected as the ERP tool and a project was initiated for the implementation. After a project reset in 2011, Saint Paul went live with the new ERP in January of 2014. While the journey to a new ERP system was challenging, the benefits for Saint Paul will be significant in the years to come.
While there are many factors to consider when implementing an ERP, we found four areas that are particularly critical. A new ERP potentially means new business processes and new ways of doing things that impact every aspect of an organization from budgeting, to procurement, to human resources, to payroll, to vendor management, to accounts payable/receivable, and beyond. A focused investment and plan for how to manage the organizational change should not be underestimated and training alone won’t suffice. The organization will need to think differently and many people will work differently. The success of an ERP implementation will require that the organization and people aren’t left behind to figure out how they should now perform their daily critical jobs. Because ERP systems don’t change frequently, many of these jobs have been performed the same way for over 20 years. Changing 20 year habits isn’t easy.
Developing a comprehensive a list of the various business processes and services that need to be performed and prioritizing this list is very important. Applying resources to the most important business process will yield a better result than attempting to work on all the business processes equally. The business process mapping is an enormous undertaking and should be undertaken in phases. Attempting to optimize all business processes as a part of the initial ERP implementation will take focus away from those that are more important. A phased approach will generally produce better results.
One of the major benefits of any ERP initiative is the ease of making critical data available for decision making. Whether efficient or not, an organization will have grown accustomed to where to find information in the existing ERP. Priority should be given to making sure that stakeholders immediately have access to meaningful data and intelligent information. This will also immediately generate a very positive view of the ERP when considering how heavy the lift is for an organization to implement a new ERP. Immediate value is returned to stakeholders. If business intelligence and dashboards are overlooked, the initial rollout period will be construed by the enterprise as generating a lot of complexity and work with minimal benefit.
Lastly, any ERP implementation will require creating an ability to share information effectively with other critical line of business applications within an enterprise. A lack of focus on this integration will cause double entry or broken business process that have a tremendous impact on the organization. Careful analysis should be conducted to insure that the right information sharing capability is implemented. Sharing too much information creates tremendous complexities and sharing not enough information will break business processes and generate additional manual work.
As the second year of our implementation comes to a close, we are confident that the value of having an established ERP will allow us to be more efficient and make more effective data driven decisions. Continual evaluation of business processes and creating a roadmap for continued adoption of ERP capabilities will increase the value of the ERP.