ERP transformation is about more than technology

ERP bigger than replacement Business Transformation

ERP transformation is about more than technology

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.

David Warford
David Warford
Co-Founder, Managing Partner , KnowledgePath Consulting, Inc.
As co-Founder and Managing Partner at KnowledgePath Consulting, Inc. David applies his 30+ years of experience in the technology industry, exceptional leadership skills, and his commitment to honesty and transparency to ensuring client success. He drives customer relationships that span the globe in numerous industries and product categories.