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You bought a shiny new ERP – Now what?

Published On: May 20, 2014

You just bought a new ERP system – or BI solution for that matter. You did your homework, selected the right vendor, paid for licenses or subscribed to a monthly fee, and you can’t wait for the promised benefits and return on investment.

There are many posts – including mine – about things to know when shopping for an ERP solution. It is generally a good decision to equip your organisation with software to manage and integrate your diverse business processes from Financials to Operations, to Analytics.

But choosing and buying the solution, whichever the vendor, was the easy bit and now here is my first tip for the morning after you’ve signed up.

Appoint your internal Project Manager / change agent

One thing that I have learned over the years is that most human beings are creatures of habit. Change is hard and the larger your organisation, the more resistance you are likely to experience. While the complete support and commitment of your board and management team is a must have, I would like to point out the importance of your internal Project Manager.

I believe that farming out “change management” to external consultants is a mistake. Instead, it is vital to identify a Project Manager who has the respect of your staff, the diplomacy to negotiate difficult issues, and the enthusiasm to bring people along the journey.

That person may or may not be your CFO, CIO or the person that led the ERP selection group. A few years ago, when I was implementing an ERP solution for Pronto Software, the change agent was the Quality Assurance Manager; she was exceptional despite not being an IT person.

If by reading these lines you have spontaneously associated someone to the role of change agent, you are probably on the right track. If not, here are some traits of such a person.

Change agents are outgoing, not really introverted and pro-communication. They are creative people that enjoy improving things rather than manage the same stuff year after year. They are the ones that come with left side ideas, things that your average manager sees as annoyances.

But these qualities are not enough. For an ERP implementation, you need someone who is respected in your business. Someone who has strong wisdom and is listened to. Someone who can work at all levels, who is capable of grasping different points of view and get adhesion for a solution that is not compromising the expected outcomes.

Last but not least, you need someone that can stand their ground with external parties including the ERP vendor, and has the ability to turn around difficult people and issues.

Did I just describe superman? Not really – there are exceptional people in all businesses. If you can’t find a change agent in your organisation, I suggest you recruit and nurture someone long before you start the ERP selection process.

To customise or not, that’s the question.

I hope that I’ve convinced you of the value of an internal change agent to drive your project. A frequent issue I encountered in my consulting and implementation days was the urge to bend, twist and customise the software to match exactly how the business works today. Isn’t each business unique? Surely we can’t have software that fits hundreds if not thousands of businesses?

Protect your differentiation

Having implemented ERP solutions in a few enterprises, I discovered that most businesses have something specific that makes them successful. This something special can be two or three attributes like “reliable, always on time delivery”, “outstanding quality”, “great return policy”, “fantastic customer service”, etc.

Your differentiation is usually known within your business. So when choosing and implementing an ERP solution, it is essential to ensure that the new system will support the attributes that are making you successful. These attributes should under no circumstances be compromised by a new software, and it is here where customisations may be appropriate.

Just imagine if your “we always deliver on time” reputation is downgraded to “best effort” for a few months because of a new IT system. This could be extremely detrimental to your business as you are losing your competitive advantage. You may tell your clients that your new system is giving you problems, but honestly, they don’t care. And as we all know, it takes a long time to build trust, but only a short time to destroy it.

Take a closer look at your business process

Everywhere else, I suggest that customisations should be avoided. At Pronto Software, I had a customer who decided to implement their ERP solution with a no-customisation policy. While challenging at times, it forced the team to dig deep and ask questions – to find out why a certain report was needed, why a process was performed, why some authorisation levels where required…

In most cases the solution was quite simple, upon closer look, the required customisation was created by legacy processes or needs that could be easily removed or replaced. A good example was an important weekly report that nobody really looked at anymore.

But there are a few cases where the solution is more tricky because it forced a change in human interactions. Removing an authorisation step in a purchase order approval sequence means that you give more trust to the people that are handling it. Sometimes these process changes are difficult but can be worthwhile as the benefits far outweigh the negatives.

Easier and faster access to innovation

The benefits of an ERP implementation with no or few customisations are huge. From an IT perspective, support, upgrades and training are easier. It will give you access to innovation and technology provided in new releases of your ERP solution without having to go through difficult upgrade and costly projects.

Continuous improvements

You just bought a new ERP system and have already considered the value of an internal change agent to drive your project and the benefits of limiting customisations, now it’s time to think about continuous improvements. It is all too common to see companies implement the core features that they need and stop there; just happy that they got over the disruption that the software implementation brought to their business. I believe in continuous improvements to maximise the benefits you get from your ERP.

Continuous improvements are small changes that you bring within your business. Nothing major, nothing disruptive, small steps driven solely to remove activities that don’t bring added value to your customers.

The good news is that your new ERP can help. ERP products are configurable as they need to adapt easily to the various business processes of their many customers. To achieve this from a single source code, an ERP can be setup in multiple ways to run your business.

If you don’t have a culture of continuous improvements, I suggest you select a department and start with a meeting to discuss their frustrations and what is adding no value to your products or services. You will be surprised that the issues are already known, but nobody is taking action.   Some issues are not software related, but some others could be solved with the ERP that you have already purchased.

Let’s take a few typical problems:

  • Are you still duplicating data entry from spreadsheets to the ERP?
  • Are you still running multiple reports, checking various totals to get the information you need?
  • Are you still checking your system for anomalies, both good and bad?
  • Do you have poor data quality in your system?

If the answer is yes to any of the above, here are the improvements that some of our customers using Pronto Xi have applied to their business:

With Intelligent alerts, a customer is now aware in real time of sales with low or negative margins occurring in their stores. This information is provided by SMS to the store manager who can check the issue while the customer is still in the store.

With a configurable screen, a customer has defined default data to be applied to some fields in the sales order entry screen and hidden some others, reducing the guess work and errors of data entry clerks.

With easy to create BI dashboards, a customer has removed the need of running multiple reports as the key information is now displayed on the main screen every time a user logs in to Pronto Xi.

These are just examples, but in all cases, there was an increase in staff happiness and value to the customer by simply tweaking or enabling functionality that was already available in their ERP system.

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