“Our ERP system was a bad fit from the start.” Have you heard that recently? When the selection team that chose that system went through RFP, Demo after demo, customer site visits and referrals, “solid” implementation planning, and finally a rocky go-live. How could it be a bad fit? After all, there’s hundreds if not thousands of similar companies using the same ERP?
What’s the definition of insanity? Customers and vendors have been doing the same things for decades and yet last week we discussed that ERP installations fail 50% of the time. “We have the best of breed and best practices and world class functionality…” says the vendor/implementer. But more than likely your system failed because you believed all that hype and rhetoric and didn’t take into account what makes your company unique.
It’s safe to say, most of the time the system can handle your requirements. How you apply the system to your unique processes and business strategy is why an implementation succeeds or fails. Chances are, 80% of what you do is “industry standard / best practices” and those things work fine within the system. It’s the 20% that cause the headaches and more importantly begin taking all the other benefits of the system away until it eventually looks like the system is “less than a 40% fit” (just an arbitrary number).
The best investment you can make BEFORE you decide to replace your existing ERP, is getting what we call an “Operational Assessment”. The worst case outcome of a good assessment is improving existing processes and procedures and therefore increasing business value. A better scenario would be to improve those same processes and procedures and have a “blueprint” for your company to move to a new ERP if that is the ultimate conclusion. The best case would be a restructuring of the company, strategy and systems that increases both the top and bottom line along with NOT having to replace the existing system! But too often what we hear is, “We need a new ERP so we’re putting together an RFP, demo, plan, blah blah blah.” If your career’s not that important to you, good luck with that, you have a 50% chance of success.
Next week we’ll discuss how to better improve your chances through an Operational Assessment.