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Category: Business Transformation

Managing ERP expectations: The story of the hammering pipe…

February 27, 2018March 9, 2018
by David Warford

Moving to a digital ERP environment is hard. It takes effort and time, but the effort pays off. Typically, our blog posts are dedicated to helping you go through the process successfully. This week, here’s a little analogy to help you keep the big picture in mind and focus on why it’s worth all that effort to move into a better system.

You are hired to build fences. The employer will supply the materials and the tools for the job. On the first day, you find your planks, all the nails you’ll need, and a three-pound pipe wrench.

For the first few days, the work is slow. It takes some time to learn how to drive in nails accurately with the back side of the wrench. Bent nails take a great amount of effort to remove as you use the vise side of the wrench to grab the nail and pull. The weight of the wrench makes work cumbersome and tiring. And hitting your thumb with the wrench? Very painful.

After several months, though, you become expertly accustomed to driving nails with the wrench. You’ve found ways to work around the shortcomings of an awkward tool, and your employer observes that your production has improved from 80 boards per day to 100.

One day, you come to work and instead of the pipe wrench, your employer has brought you a new tool to try – a claw hammer. You don’t understand the hammer, and no one has explained how to use it. It barely weighs a pound; how will it generate enough force to drive a nail? Where is the device to pull bent nails? Your boss insists that this is the tool of the future.

You try it for the first week, and your production falls back to 90 boards per day. You’re having trouble getting used to the lightweight nature of the hammer and seem to be missing your mark more often. You hate how clumsy you feel; you especially hate that you’re hitting your fingers more often again. You start to yearn for the familiar comfort of the pipe wrench. Ignoring the early problems, you focus on a few positive gains. You have discovered that the claw grabs bent nails more effectively and extracts them with less effort. Your arm isn’t as tired swinging the hammer by the end of the day. And, in time, you’ve adapted to the new weight, and your accuracy and speed have increased. Your production reaches 130 boards per day.

This is how any ERP transformation will feel for your workforce. It demonstrates why it is important to set everyone’s expectations early. Your legacy system has become a bulky tool. Your staff can get their jobs done, but it often requires brute force to work information through the system. You will have employees who will prefer to keep the legacy system not because it’s perfect but because they understand how to work around the drawbacks in order to meet production goals.

Learning the nuances of a new tool can be frustrating to employees who don’t want to see their production tail off under any circumstances. In addition, they might focus on the problems that don’t go away – “nails” still get bent and “thumbs” occasionally get hit.

Manage Expectations

I will leave you with two thoughts to help manage expectations throughout your project. First, help your workforce understand it is part of the process to hit a temporary valley while everyone works through the learning curve of a new ERP, but you will work to flatten this curve. Secondly, communicate that the new ERP will help minimize frustration as well as maximize productivity and agility, so there will be fewer big changes in the future. Small changes will become the norm, and your workforce will no longer live in fear of the next new tool smashing their thumbs.

Business Transformation

Are requirements enough?

February 26, 2018June 1, 2018
by David Warford

The value of process mapping before an ERP purchase

In rare situations, a company can successfully choose an Enterprise Resource Planning (ERP) system on technical requirements alone. However, for most companies, the decision to incorporate a new ERP into an organization should be a piece of a larger plan that includes process mapping – it shoudn’t be the lone goal.

In a previous post, we referred to companies who, unintentionally, “bought the demo”, where several features of a new ERP resonated with an organization’s current processes, but the new system did not solve many existing problems.

When an organization decides that their ERP system is no longer keeping up with the company’s ability to execute its goals, this becomes an opportunity to take a full-scale look at the business. Think of it as the difference between taking your car in for an oil change and going in for a tune-up. An oil change is a maintenance activity to make sure everything can run smoothly, similar to authorizing a software update for your current ERP. With a tune-up – which occurs far less frequently – more systems are checked for operating efficiency.

An ERP implementation isn’t solely about making sure information flows through your organization properly. It’s also about making sure that production flows efficiently and positioning the company to work from a place of agility – which translates to a place of strength.

Take the time to do it right

Take the time to map your current processes. What are the steps that you have to take from start to finish for order entry through order fulfillment; from product conception to marketable item; from prospect to customer? How does information flow through those processes, and how do your employees interact with it?

Discuss the pain points that come from those processes with your workforce. KnowledgePath consultants have witnessed many a-ha moments with our clients during such discussions. Often, many of the “normal” tasks employees perform are the result of work-around solutions to your current ERP. They’re not trying to take five steps to perform a simple task – their current tool has boxed them into spending fifteen minutes to do what feels like should only take five.

The benefits of this exercise – while time-consuming – offer a large return on investment toward understanding the inner workings of your organization. Regarding the primary objective of securing your next ERP, you will begin developing a thorough list of product requirements you need to see from ERP vendors, which increases the chances of you choosing the best system for your needs the first time.

Identify important gaps

You can identify the information gaps in your current system. “I would like to do Process A, but without Information B that seems impossible.” In the real world, that can sound more like, “When I need to drop a rush order into production, I would like to be able to rearrange the schedule with as little impact to other deadlines as possible. Currently, I use my best guess based on experience, but a scenario analysis tool would make the decisions go faster with fewer errors.”

Mapping your processes is also an opportunity to help minimize issues associated with change management. A new system will be simultaneously exciting and stressful. If you’ve involved your front-line employees in the process of identifying your needs, then you have given them a voice in the process and a greater sense of buy-in.

Finally, if this exercise seems logical but the thought of going through a digital transformation is intimidating, then consider this: what I have described above is a big part of a successful digital transformation. Digital transformation is simply moving away from unnecessary manual and paper-based processes. Mapping out what you do now will allow you to step into a better, faster, and more agile method of doing business, and that will make you more competitive into the future.

Business Transformation

What exactly is Digital Transformation?

February 20, 2018June 1, 2018
by David Warford

…and does it really apply to me?

Companies replace or upgrade ERP and other business systems for a number of reasons all the time. But for the past few years, new terminology has been sending waves of fear and wreaking havoc upon CEO’s sense of order. One in particular is Digital Transformation. This post should help clarify what it is and help bring the terror level back down.

Digital Transformation sounds big. A full overhaul of unknown computer technology invading every facet of the company comes to mind. You may envision everything taken over by computers. What was once just science fiction is about to materialize throughout your very own workplace. The elements that once made your company unique reduced to a line of code somewhere in the system.

It’s not like that.

First things first, digital simply means “in an electronic system instead of on paper.” Basically, it is the elimination of unnecessary manual work.

A quick history of ERP system functionality

In the days when ERP came to the forefront, functionality in business systems grew at a manageable pace. Systems were upgraded much more often than they are today. Upgrades were less challenging because the systems were not all that pervasive to the overall functionality of the company. In the meantime, the basic technology behind the functionality began to expand. Since Y2K, basic computing power and capability has grown exponentially. Business system developers began to exploit what new computer power allowed them to do for both processing speed and user interaction. Because of this new power, upgrades grew so pervasive that changes became more traumatic. This was not only because they were touching more areas of the company, but because they ultimately still used the original technology, and realistically, this technology was no longer able to keep up. At the same time, business was demanding a change, something that first took hold when automakers forced companies to go to EDI, insisting they would not work with companies unless they could transact with them digitally.

Today, ERP and other business systems no longer manage just accounting and planning- they touch everything. A well implemented business system should impact nearly all areas of the business, but this is good because it allows streamlined access to information.

The opportunity you have with digital transformation is to move the entire enterprise forward through a change to a powerful and integrated system. The potential for improved profit, market growth, and customer satisfaction is all in play. The difference today in our digital world, is that this is not only a change in what the system does. It is also how the user is able to do it.

Now, about here you are probably wondering how this post is supposed to lower your fear level of a transformation like this. So, consider these three points.

First, any ERP replacement or even any business system replacement at all is now digital. So take digital out of the panic list because…

Secondly, we already live in a digital world, so extending that into our daily business lives isn’t as frightening as it feels. Think of ordering Starbucks on your phone. For many it is second nature, but it would have taken much more effort just 5 years ago and was unthinkable 10 years ago. Now think of business tasks in the same way. You can create a report, and it will integrate a terabyte of data in minutes with digital technology, whereas it might have taken a day or even a week of combining spreadsheets to get a comparable result.

Finally, the transformation doesn’t have to be done all at once. Many companies will have you in panic mode immediately by discussing the enormity of the project. Digital Transformation can (and usually should) be done incrementally as any ERP replacement would be done. Just make sure you start with a solid base of the right due diligence up front.

Set the project up the right way

Develop your business case and roadmap. Create the vision. Use this base to find the right software to fit your needs. Then you can take small steps toward a bigger transformation at the level of change your company can manage. Using this well-defined roadmap, you will be able to grow and adapt over time with the same system.

In the end, Digital Transformation is really no different from past changes you have made as a company, except these changes will last longer, be adapted to faster and better, and provide more value than you have probably become accustomed to. If you think about Digital Transformation as a business system change that simply offers better options as you need them, your expectations will be much more in keeping with reality.

Business Transformation

Generation Z and Change

February 10, 2018February 10, 2018
by Bill Lewis

When working through major organizational change, barely a blip on anyone’s radar is Generation Z.

The oldest of this generation (born between 1999 and 2010) is just now entering the workforce, so it seems unnecessary to worry about whether they can let go of a business’ old way of doing things. However, it would be foolish not to consider their ability to unlock the positive potential of implementing continuous improvement initiatives well past the completion of a major project.

In previous posts, we have discussed the change management strategies associated with four other generations of employees as it relates to an Enterprise Resource Planning (ERP) implementation. Generation Z represents one of the smallest bands of employees you have, but over the next decade it will be your fastest growing group and will occupy many of the front-line and support positions that keep a company moving forward.

In the short-term, it’s not unusual to be concerned about whether they can handle change. After all, there aren’t that many of them, they occupy jobs where employees are easily replaceable, and as a result, they haven’t built much credibility to offer a voice to their concerns. In the here and now, that’s not a resume for a great asset. So with this group, you should look more toward the future.

They’re still in learning mode

Anyone you’ve hired recently who just finished figuring out your current system is going to be naturally frustrated at the prospect of learning yet a new system. Generation Z will be less frustrated in that they’re not far removed from their formal education and are still in rapid learning mode. On top of that, consider the relief they might feel when a new ERP essentially levels the playing field inside the building. Suddenly, many of their older coworkers are feeling as awkward as they are. If your core team handles this situation the right way, it is an opportunity for generations to bond and exchange knowledge across generations that will ultimately benefit the company.

Tech is the norm, not the exception

Generation X grew up during the proliferation of gaming platforms and early versions of the personal computer, and they made their parents feel dumb with how quickly they adopted the technology and ferreted out the nuances of the programs. Millennials did the same as they grew up with the Microsoft suite of products as common tools.

Now consider Generation Z.

They’ve been putting together PowerPoint slides since elementary school. While Generation X might point at their smartphone and think of it as a cell phone with extra capabilities, Generation Z looks at the same device as a hand-held information processing device that opens up a window to the world and as a side benefit allows you to speak directly with other people (though why do that when you can text?). If you want to get the most out of your new ERP, then you need to find a way to give Generation Z free rein to explore. Ideally, you want all of your employees to look for better ways to work, but this is the generation that will take the greatest advantage of it. As you’re setting up your ERP, pay attention to your company processes for sharing knowledge. Once you have a good process in place, make sure Generation Z knows how to make good use of it.

Channel their social behavior

Sharing information is what they’re primed to do. They start with the mindset of transparency. Building on the previous idea of setting up continuous improvement protocols, consider internal message boards and training wikis as tools to have so that employees can talk about things they’ve discovered within the system or to collaborate on troubleshooting. Several ERP vendors are setting these up among their customers. It could be that your Generation Z employees are among the most apt to be able to establish internal social media platforms for your business and encouraging coworkers to make use of it.

The bottom line is that you should start preparing for Generation Z to be a major force in your business over the next decade. The faster you can reap the benefits of their imaginations and tech-savviness, the quicker you will transform your youngest employees into unique company assets.

This post wraps up our series on generations and change. Stay tuned for a full summary download available in the coming weeks.

Business Transformation

The Traditionalist and change

February 3, 2018February 5, 2018
by Bill Lewis

Think about the oldest and the youngest employees in your company and how they work. Do they approach work the same way? Probably not. They won’t approach or deal with change the same way either.

In the last few posts I have discussed Change Management as Risk Management around generations in your workforce; you will mitigate your risk significantly when you address change successfully with your people. Since change happens at the pace of the individual, how do you help hundreds or even thousands of people change effectively in your organization with up to five generations working within any given organization?

Last time, I wrote about the Baby Boomers and how to help them experience successful Organizational Change Management (OCM). Today, I’m discussing the oldest generation currently in our workforce: the Traditionalist.

The Traditionalist

Born before 1945, many in this generation have retired, but not everyone! This generation has seen more significant change in the world than any other group, and younger generations often dismiss the idea that Traditionalists will be willing or able to change in their work environment. By extension, younger generations also tend to dismiss the value that Traditionalists bring. But, it’s amazing how a little information can change that thought and help people work together.

Here are some generalizations about the Traditionalist (keeping in mind of course that these are generational themes and don’t define every individual):

They believe the top-down approach to leadership is the most effective. They trust their leaders to know where the organization is going and what needs to be done to get there.
Based on this trust of leaders, they may not require significant detail or depth of explanation on the change initiative as a relates to the overall strategy.
They respond to an emphasis on transition.

So, what do you do with this information? Here are a few quick thoughts to help the Traditionalist make a successful change, so they can make a valuable contribution to the changes ahead.

First, present the vision and make sure that it is communicated from the top. This should be part of any change initiative, and there is no exception here.

It is very important to validate the work the Traditionalist has done in the past. Acknowledge the value they have brought and then help them separate from the old way of doing things. Create safety in the uncertainty of the in-between. A roadmap is helpful here. Show them point A to point B and what the road can look like in between. It can take the fear and guesswork out of the fuzzy middle when everything seems in an uproar, and it may feel like the direction is lost.

Include Traditionalists in your project teams. This will make them be part of the change while positioning the company to benefit from their organizational knowledge. They have knowledge and a background that is missing in the younger workforce. Traditionalists were often there when certain company cultures were formed or remember which mistakes were made during previous transformations. If they can be reminded that they have this background and expertise so to speak, it will help them see that they still have a place in the changing environment.

One quick note to keep in mind on this point: because change of this significance is always hard, it is a common occurrence for those with longevity in your company to become vocal naysayers. When they have seen a lot of change through the years, they will most likely have examples from the past of a similar initiative that failed. While doubt is understandable, it is important to remind everyone that you will learn from those failure points. Doing so will acknowledge the past and the Traditionalist’s experiences. Then encourage your team with the present reality: much has changed in the past few years alone. Just because something was a failure in the past should not dictate its preoperative demise. You will need to strike a balance between bringing in the value of learning from the past and preventing a derailment of the project over a naysayer perspective.

In some cases, a Traditionalist may choose to work on the periphery of the project because of retirement plans, however because of their knowledge and first-hand experiences, it is important to involve them in the change you are seeking for your company. Doing so not only allows you to capture valuable and often undocumented knowledge, but it also means they won’t feel left behind- something which is unfortunately a common situation in the face of the ever-changing workplace of today.

Remember, change with your ERP modernization or transformation will only be as successful as your people who work there, so give all members of your workforce the opportunity to be part of the change.

Next time, I’ll complete this series on generations and change at the other end of the generation spectrum, Generation Z. Sign up to receive notifications when we post, so you don’t miss anything.

Business Transformation

ERP transformation is about more than technology

January 13, 2018January 13, 2018
by David Warford

If you’re considering replacing your Enterprise Resource Planning ( ERP ) system or applying a major upgrade, take a step back and look this project as a part of a larger business transformation.

One of the major reasons organizations replace their current ERP is because the legacy system is not holding its value. It can be a hard pill to swallow, but the reality is that what was cutting edge in 2008 is flat out antiquated in 2018. Employees are creating workarounds in order to do their jobs because their ERP was suited to a bygone business environment. Systems on the market today have better functionality that allow businesses to run leaner and more efficiently.

Improving the technology at your disposal is only part of the solution. Even if you can’t go through a full business transformation at this time, replacing your ERP is an ideal time to take a close look at your business practices and your personnel. It will make the replacement more successful and lead to additional improvements for overall company value.

Map your processes

Learn what you do and why you do it. Define your starting point by taking the time to have your people walk through all the steps and decision points that go into their day-to-day operations. You need to do this anyway in order to help you identify requirements for the next ERP, but the exercise creates the added value of documenting processes that have only been communicated through tribal knowledge. People from different departments gain a new perspective on how their work affects someone downstream. It is not uncommon to hear something such as “I didn’t know you did all that” between two people whose tasks were side-by-side in the process flow. While it would be natural to assume everyone talks with each other, the reality is that most people will simply do what they have to do to get their jobs done without discussing the bigger picture with coworkers.

Identify the pain points

Once you’ve identified the current state of your processes, let your workforce speak candidly about where the established process and technology are holding them back. These are the pain points of their jobs. Assembling this list will allow you to prioritize what needs to be fixed. Some of the problems are not technological; therefore, a new ERP won’t fix them. However, the awareness of the issues that are technology-based gives you the ability to shop more efficiently for the ERP that is best-suited to your needs. This also give you a list of needed improvements around the non-technical process flows.

Imagine the future

Don’t settle for a system that replicates what you already do. If you’ve just gone through the exercise of identifying the flaws in your current system, the last thing you’ll want is to purchase something that reaps no real value to the company. It’s a surprisingly common mistake to make because people lean toward technology in their comfort zone no matter how unhelpful that is. You likely can’t fix all of the pain points with a new system, but it will be better to set improvement goals off of the deficiencies you can fix with a new ERP. Maintain that focus to help your team look for the established gains you’re hoping to achieve and less on negotiating the learning curve that comes with utilizing new tools.

Assess your people

Even if it goes smoothly, the implementation of a new ERP will be disruptive. Focus on the opportunity to reset your succession planning. Before the project even starts, you’ll need to determine who your subject matter experts are in order to work on requirements gathering and process mapping. This is the time to evaluate which of those people are in sole possession of critical knowledge and how vulnerable you are if any of them leave. As training and implementation begins, you need to be ready to recognize there will be employees currently buried on the company depth chart who are ready to take a leadership role because they have the aptitude and willingness to utilize the new system to its fullest potential. There will be others who will need more coaching to make a successful transition. It is important to identify these people as well. Success of a new system is dependent on success of the individual to use it correctly.

Strongly consider bringing in an outside consultant

An experienced consultant can guide your company through these early processes. They can lead your people through the mapping process and compile the findings into a coherent Request For Proposal package for prospective ERP vendors. With their experience through the ERP implementation process, consultants are in a good position to identify key assets throughout the workforce. They can recommend early adopters and other employees who will contribute to the success of the project and identify the people in the organization who are prone to working against progress. Consultants are also able to keep the project as a whole on track and on time — such as master data cleanup and change management initiatives — that will get the implementation off to a running start and avoid timeline disruptions at the very beginning of the project.

In the end, no matter how far and wide you can take a full business transformation at this time, keeping these points in mind during your ERP replacement or modernization will maximize the value of the work you do now and set the stage for more value into the future.

Business Transformation

ERP: Upgrade or replace?

December 14, 2017December 16, 2017
by Rich Dettinger

Which option is better – upgrading your current ERP system or replacing the entire system? As the complexity of business computing continues to grow, companies are faced with this decision continually. If the current ERP system seems to work you might think it to be an easy decision, but there are a number of factors that need to be considered before you commit to an upgrade.

System functionality versus workarounds

Often, the existing product appears to be working for the company. The challenge here is that users are very adaptive and over a period of time will have created processes to compensate for system shortcomings. Often this workaround is unnoticed or even unknown until a key individual leaves. Then suddenly things break down. Why? That individual had become a component of the system filling the gaps in that product and keeping things going. Without that person, the process breaks down with no documentation or inherent understanding of what was done to compensate for the system’s shortcomings.

Upgrades and value

The next thing to consider: what does an upgrade really offer? With software consolidations over the last 10+ years, many of the major providers own any number of products. If you are a customer on an acquired product, it can be hard to get straightforward information on the future of that product. Almost all vendors will say that as long as they have customers paying support they will continue to support the product, but will your system be supported for the functionality you need? A release that has been in the public domain for five or more years has had all the inherent bugs fixed long ago. So what you need from your upgrade dollars is additional functionality that is compatible with today’s computing environment.

New releases

New releases or re-writes manifest themselves in several ways. Some new releases fix long-term issues that didn’t require a major re-write along with any function changes necessitated from government requirements. In this case, the basic architecture which could be more than 20 years old, is unchanged, so interoperability with current digital commerce is unchanged. In this case, there are often a number of add-ons, customizations, etc. that must be changed with the upgrade, so it’s not a simple process. The biggest problem with this type of upgrade: after all that work, you still have basically the same capability you had before. You just put really expensive lipstick on a pig.

New delivery platforms

The other phenomenon is the “new” version of an existing product that moved to a new delivery platform. Companies redo the user interface, change the delivery from on-site to cloud, and then announce a new version. It does not offer better functionality even though the product is marketing that way. The basic underlying platform is 20 years old and no more capable than the old version.

Vendors ultimately want to move the clients they have gained through multiple acquisitions into a single platform. This, too, can be promoted as an upgrade when in fact it’s a ‘new’ system conversion — ‘new’ because it may be new for you, but it is still using a legacy platform.

In the last 10 years, the number of vendors offering products in the ERP space has ballooned to over 200. Many of these companies built products to specifically address the needs of today’s e-commerce world. How we as individuals go about our daily business has changed dramatically in just the last five years. Amazon can have almost anything to your door in 24 hours based on an order from your smart phone. Paying a bill with a paper check is almost unheard of. So, simply upgrading a product built on 20-year-old technology is asking for the impossible and cannot add the functionality often needed to meet today’s demand.

Make an educated decision

In the end, you need to determine the advantages for yourself but make this decision with all of the information. If your system meets the functional needs of your company, then staying with what you have or upgrading if it offers the right functionality is the right choice. But before you make an upgrade to your system, do the research and do the math. You may be surprised to find that replacing your ERP system to one built on new technology is often no more costly than an upgrade and will offer functionality far superior to anything an old platform, no matter how much lipstick is added, can offer.

Business Transformation

ERP replacement is not just an IT project

December 8, 2017December 8, 2017
by David Warford

ERP replacement is often considered to be an IT project. This makes sense. After all, it’s the IT department that must handle and resolve the challenges caused by an outdated system. They know the daily toll it takes firsthand- both on the workforce and on the company itself.

Once the need for a new ERP system has been identified, who in the company should be expected to manage the project itself? Many argue that it is an IT project, and therefore IT should run it.

There is just one problem with that perspective: an ERP replacement or modernization is never just an IT project.

ERP projects touch every facet of your company. No department is left unaffected, and technology requirements are only one factor. Your business processes and how your people work must be taken into consideration from day one if you are going to successfully identify and modernize your company now and for the future. If these pieces aren’t in place at the beginning, there will be some hard realizations farther into the project as key considerations come out that were not previously identified. This will impact the cost, timeline, and even the success of your replacement.

The only path to success is through working with this fact, not against it. Turning your ERP replacement over to your IT department is a recipe for failure. This is not because they aren’t highly capable professionals. I would venture that, as with most IT departments, you have highly talented and skilled individuals. They need to be able to focus on their strengths and continue bringing value to the company. ERP replacement is a very specialized and intensive undertaking. While the IT director and their department need to be actively involved throughout the project, ERP projects take a different skill set than the regular demands of the IT department. It is unfair and unrealistic to expect them to become an expert overnight in something that requires years of knowledge and experience to master.

An ERP project will require hands-on involvement from the leadership team, the IT department, and other key stakeholders. Managing this project overall, from its inception, to developing a business case with the right goals and strategy, to the right roadmap, and then on to selection, negotiations, and implementation takes specialized knowledge. It also takes deep and wide experience and a lot of time. No one really has the time to stop everything else to become a specialist in the ERP industry. Even if they did, it would take years to get there.

One other point to consider: If you put your IT director in the position of running the project, they lose their ability to be a member of the team needed to analyze the process. It will be difficult to gain consensus in this role if the team feels like the IT department is pushing their own agenda. When the IT director is a member of the team, they can serve as a voice to offer valuable input.

This is why consulting firms can bring value to an ERP project. A good consultant will bring that deep and wide experience to ensure you are taking the right things into consideration, involving the right people and departments when needed, and allowing your employees to focus on their primary jobs the rest of the time. Consultants will work with your IT department and other key people to help the project succeed. A good consultant will get your project completed successfully with significantly more value and significantly less wasted time.

Overall, the IT director and their department is clearly vital to the success of your ERP. But help them be successful by supplementing their deep insight into your company with professionals who have deep insight into the industry.

Business Transformation

ERP Modernization: Why not keep it internal?

November 13, 2017November 13, 2017
by David Warford

You’re faced with a major project. Your company needs a new ERP system and getting approvals for this is not typically smooth sailing. It takes a lot of time, money, and resources.

Once your company has agreed to move forward on a new system it’s normal to consider going through this process alone. After all, why would you spend even more money and hire an outside consultant when you have highly competent IT professionals in-house?

For many IT projects, I would agree with you. Your internal resources are usually just what you need to accomplish your goals. But when it comes to ERP, the factors are much deeper and often hidden on first – or even fifth – glance.

Here are a few things to consider before you jump into the ERP abyss on your own:

ERP modernization is NOT merely an IT project. It touches all facets of your company, involving your people and business processes in addition to your technology. The whole company must be involved at different levels for this to be a success.
Because this project will involve more than just the IT department, who will have the time to manage this? Have you dedicated one internal resource to oversee the project? If you have, then good for you, but you need to ensure they have nothing else on their plate. When other issues bleed in, it will affect the ERP project every time – usually in a negative manner. This person will also need to help manage the other internal resources needed.
And how about the person who has been chosen to oversee the project? Have they been through an ERP modernization before? Typically, an internal project manager has been very successful with projects but has only been through an ERP modernization a couple times at best throughout their careers.
Statistically, over 70% of all ERP projects are considered unsuccessful. Of those 70%, over 95% were run without a professional consultant.*

Why hire a consultant?

A good ERP consultant is worth much more than the cost it takes to hire them. At KnowledgePath Consulting, we actually reduce the overall cost of the project while also ensuring that it is a success. How?

Let’s start with numbers. Our negotiating power is strong. We help our clients finalize a much better purchase price than they would get negotiating on their own. And, since we take no commission, all the value goes straight to you, the client.
ROI: Throughout our process we identify both technology and business efficiencies to help you improve your efficiency, flexibility, and agility both company-wide and in specific departments. In a recent project for example, we helped our client save approximately $3M a year and had an ROI payback on both system and consulting costs in less than 3 years.
Because we do this all day, every day, our consultants draw from years of knowledge and experience. We also stay up to date on the latest developments throughout the industry, and that’s no easy task either. This translates to leveraging the value of professionals who have seen what it takes to successfully go through an ERP transformation and identifying new opportunities for your business, as well as the hidden pitfalls and roadblocks that can cut the unsuspecting project manager short.
Mitigate risk throughout multiple channels. ERP modernization is fraught with risk. I don’t say this as a scare tactic; it’s common knowledge. A good consultant will help you mitigate this risk from day 1 by ensuring the right questions are asked and answered. They ensure you don’t lose what makes your company unique in the marketplace, that the process minimizes interruption of day-to-day business, and (just as important) that your workforce is properly trained and educated to use your new solution.

In the end, you have choices. You may still believe your best option is to go it alone. But, consider the value you will gain with a ERP consultant working with you before you make your decision. The difference will probably surprise you.

Numbers are averaged from studies by Gartner and Accenture

Business Transformation

Why is change so difficult?

October 10, 2017December 28, 2017
by Bill Lewis

Why don’t people change when we ask them to?

Any successful ERP project or Process Excellence program must include solid Change Management. As a leader of such a project, in order for your company to make its necessary changes successfully, there are certain challenges inherent to change which must be both recognized and addressed.

Change is a fundamental issue with any company who is working to improve or compete. The basic and obvious reason for this is that no one really likes to change. The idea of change may be a good one in theory, but when it comes down to taking action, change is h-a-r-d.

However, one of the primary reasons organizations struggle with change goes beyond the basic concept of change simply being hard. This reason answers the question, “Why is change hard?” The answer: the discrepant motivations for the change.

This discrepancy goes beyond the business or even the industry. Whether you are in finance, manufacturing, retail, or any other industry, you’ll see it. And, you’ll even feel it.

Executives want change in order to increase profitability, reduce waste, increase efficiency, and help their company become more competitive in the marketplace. In other words, they are highly motivated to change the company in large part because this change will bring about more success.

If we’re being honest, unfortunately, often times this success is often me-focused. If you’ve been around long enough in a company to go through a change of any kind, you’ve likely even witnessed it. An executive who was “in it” for themselves. In addition, the executive level of an organization is not typically the group being asked to change. They get to send out the order. They hold a meeting to tell the people what they are doing “for them.” The people then hold a “meeting-after-the-meeting” and talk about what the leaders have done “to them.” The perspective can unfortunately often sing to the tune of: “Why should we help the workforce change? Shouldn’t our leaders do what they are paid to do?”

Enter the workforce perspective:

The workforce is being asked to change what they do, and they must be respected and valued from the executive leadership level for this to go well. It may not be what the executives think is important, but it is crucial to the people being asked to make the change. If there is little interaction or communication between the people being asked to change and those dictating this change, morale and engagement will suffer quickly. When morale declines, so does productivity. It’s human nature and something I’ll discuss more at length in a future post.

Real change takes place at the level of the individual. For an organization to experience tangible, measurable change, it can only happen when the individuals being asked to make this change actually do so in a productive and lasting manner.

For the sake of this discussion, let’s assume those asking for change are the executives. Those being asked to change are the workforce.

Two Key Questions

There are two key questions the workforce has that executives need to understand and address for a productive conversation to take place regarding change:

What’s in it for me?
What are my chances for success?

When executives can help to answer and address those 2 questions for their workforce in a positive, productive way, people will actually lead themselves in change. The will have their confidence boosted, in a REAL way. Not in a false cheerleading manner.

When executives help to re-position change as a positive goal, they have just set the company, and more importantly its people, up for successful Change Management.

In the coming posts, I will address this challenge in a tangible and practical way and also discuss inherent risks of change with methods you can utilize to help ensure your project and Change Management program is a success.

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