“This ERP project is beginning to unravel. Should we start looking at where we can cut costs?” This statement usually comes when the realization has set in that you’re not going to get everything you want out of the new system at any kind of reasonable time and cost. It’s time to “settle” for what you really need vs. what you wanted and the whole reason you started this project in the first place.

Go back to the “80% rule”. That’s where every vendor will start the discussion and customers are more than happy with that because that’s the easy part. “Let’s get the project rolling on a positive note and get a lot of buy-in.” There’s an old Chinese saying, “Sometimes life works backwards”. Ever try to push a wheel barrel over a rock? Much easier pulling it isn’t it? It’s the same with software implementations, you need to start with the questionable aspects of the software so you’ll know quickly your true costs and troubles. If you do software selection properly, you still haven’t paid for the software but there will be a cost to figure out just how well the software will fit.

Whether you have an RFP or not, start with the most difficult processes that have a questionable fit. Going through the “20%” (not so good fit) will quickly determine the “true” cost of the implementation. The 80% won’t change, or only change slightly if something was overlooked, but the 20% will have a dramatic effect on the overall scope and cost of the project. Further, as we already stated in a previous post, the probability of getting the entire 20% is extremely rare, and you’ll discover just how good a fit and what compromises have to be made in order to proceed with that particular vendor.

An aside: there’s really no way to truly determine an”80% fit”. As with “Best Practices”, the term is more software vendor driven to prove to the customer how well their software fits. The term came out of the RFP world years ago when “80% of the boxes were checked YES”. Today, virtually all RFP’s are returned with well above a 90% fit but as we have already determined, those “YES’s” are useless unless figured in to the process with which they are designed. the solution to this is to figure out the processes that don’t fit well into the vendors’ processes and focus on determining what and how much work has to be done to make those two merge into a satisfactory solution.

 


Clark Green

Clark brings a deep level of experience with ERP companies to KnowledgePath Consulting. He has strong leadership skills, and demonstrated success in manufacturing, supply chain, business unit, and operations performance in multiple industries.