ILLUMITI INNOVATION BLOG

Keeping It Real: 10 Ways to Drive ERP Project Expectations - Part 3

By: Illumiti

In Part 2, we looked at several key steps to help your ERP implementation deliver desired results. To wrap up, here are the remaining five steps (6 through 10).

6. Find the right implementation partner

Alignment is key here. If you don’t have an implementation partner that helps you work toward your goals, there’s a high risk that the project will fail to go as planned—and won’t deliver the desired business outcomes.

What are the critical alignment points?

  • The partner should believe in your objectives and the ability of the defined project to meet them.
  • There should be a cultural fit.
  • The partner’s implementation method should be acceptable to your organization.
  • Between your business and any partner, there should be clearly defined and agreed-upon roles and responsibilities.

Treat each other as equals in the journey. A procurement-based mindset hardly ever leads to a project meeting expectations, because it tends to result in “letter of the law” conversations, rather than a united front to find positive solutions to the many issues and challenges that arise during an ERP implementation.

If any of the above are not aligned, find someone else to partner with. A prospective partner may have a proven process, but unless you’re on the same page, you shouldn’t work together.

 

7. Maintain a tight project scope

When it comes to an ERP implementation, an overly ambitious scope can be fatal.

Today’s ERP systems are incredibly powerful tools with unparalleled functionality. But far too often, organizations try to solve all of their business challenges in a single project by taking on too much scope, too quickly.

This happens because the organization is still operating under the older model of “implement once and then run the ERP into the ground to maximize ROI”— this is the ERP-as-a-capital-asset mentality.

You should not view a new ERP implementation like this. An ERP is a long-term proposition with immense scope that should be implemented and grown using a phased approach based on continually improving your business. If you want all the benefits of the new system and a 100-percent return on business value in the first year, think again. This kind of mindset winds up compromising quality. It can also leave the organization unprepared for process and job changes, and sometimes leads to a failed go-live.

Benefits_Realized-1

It can take as long as three years to realize the benefits of an ERP implementation, a 2018 global survey of 300 organizations shows.

 

To improve your odds of success, take a walk-jog-run approach.

In ERP implementation terms, this means doing things in phases. For example, you might launch Phase 1 with a particular scope that meets the initial implementation objectives, but no more, then deploy Phase 2 a few months later, and so on. As you tighten the scope, don’t overestimate your organization’s ability to execute each phase.

This is especially true of the first phase, which is the most complicated in terms of new software, processes, OCM and data. Phase 1 can be double or triple the effort of all subsequent phases because it’s all new, and the organization may not be accustomed to implementing software and the effort and stress that results.

 

8. Appoint a gatekeeper for the solution

Inside the company, the ERP implementation needs a single owner of the solution who will be accountable for managing all changes requested against the original solution design, during the project and post-go-live. They will evaluate each change to determine if it:

  • Delivers enough business value to pay for itself.
  • Negatively impacts the overall solution, weakening the desired outcomes.
  • Can be executed within the planned budget, resourcing, and timeline.

The gatekeeper manages the process, sending the evaluated change request to the appropriate personnel for approval or rejection.

This role and process are critical because, over time, the solution delivered at the end of the implementation may no longer provide the business value it initially did, thanks to the volume of post-go-live changes. For example, if the solution met the desired corporate objectives and outcomes at go-live by following an 85-percent best practices adoption, poorly managed change requests could erode that compliance level materially. That would dilute the solution’s ability to deliver on objectives and outcomes—and make the next upgrade far more costly than it should be compared to go-live.

 

9. Have a clear roll-out strategy

The roll-out strategy should be aligned to the project’s business objectives; the capability, capacity, and willingness of the organization to change; and the risk profile and tolerance of the organization and its stakeholders.

Given the ultimate potential scope of an ERP, most organizations choose a phased roll-out based on some combination of functional scope, business locations, business units, employee population, retiring systems and impacted customers.

A phased roll-out strategy is a practical way to deploy an ERP, but it introduces uncertainty among internal stakeholders. Their usual reaction to a phased approach is that there will be no Phase 2. If left unchecked, this perception can cause internal stakeholders to try to expand scope as much as possible, which causes scope, cost, and effort to increase and potentially puts the Phase 1 go-live at severe risk.

To avoid this risk, actively manage the roll-out strategy, scope, and timing, and keep them visible to all stakeholders in your company at all times. Also, when new requirements are raised, schedule them into the roadmap for the roll-out and show the internal stakeholders where they fit in the schedule.

When you invest in an ERP, you’re buying into a foundational platform. In five years, it will look different than it does today. If you think of an ERP as a one-time spend, you won’t get value from this substantial investment.

Your objective for the first go-live should be a stable system that meets an initial set of business objectives. As part of communicating the roll-out strategy, explain what’s coming and when, and tie it specifically to business objectives and outcomes.

 

10. Keep on training and reinforcing the changes

Organizations put a lot of energy into testing an ERP system before it goes live, but they rarely have the same focus and spend the same effort on their people. For instance, how many projects conduct user acceptance testing (UAT)? Make sure to monitor adoption and capability constantly, based on targets that are set as prerequisites for go-live.

Don’t think of training as a one-time event. It should consist of multiple activities that reinforce the new processes and build user capabilities to execute them effectively at go-live.

Training doesn’t mean gathering your people in a room for a presentation. Make the sessions interactive, testing staff to be sure they absorb the changes that are coming. Before you let anyone near the new system, validate their capabilities, so they don’t damage it. In other words, test people like you test your ERP.

There should be formal training for all users, who also need access to material for self-study. For each area of the business, require your staff to complete exercises that will be evaluated as part of business readiness in the lead-up to the go/no-go decision.

At the outset of the project, set and measure minimum performance targets. These goals should inform the business readiness strategy and the go/no-go assessment.

Some benchmarks to meet before go-live could include:

  • 100 percent of users have attended training.
  • 100 percent of critical users have practiced their processes X times.
  • 75 percent of non-critical users have practiced their processes Y times.
  • 100 percent of non-critical users have practiced their processes once.
  • 100 percent of critical users have achieved a 90-percent competency level as measured.
  • 75 percent of critical users have achieved a 75-percent competency level as measured.

Setting such targets will greatly increase the probability of a successful go-live, shorten the time to achieving the project objectives, and reduce stress on the post-go-live support organization.

 

And remember: Keep it real

In conclusion, it all comes back to one question: Are we being realistic about our expectations? You wouldn’t buy a house without knowing what you’re getting into; investing millions in an ERP shouldn’t be any different.

Creating realistic expectations requires a focus on managing expectations and change. It also calls for the leadership to say “no” and/or “not now but later” to some of the bells and whistles your stakeholders will demand. Don’t just say “no,” say “no because” and, if appropriate, “but here is when.” They will thank you for this adherence to original scope later.

This blog post is excerpted from a recent thought leadership paper. You can find the entire paper here.