ERP - Proven Implementation Path
Friday, August 16, 2013
ERP, The Proven Implementation Path! 16/08/2013
True or False?
There are approximately 120 ERP software packages on the market today! These are
typically described as tier 1, tier 2 and tier 3 which gives an indication of the market
segment they target in terms of sales.
ERP software sales-people, in striving to gain some form of competitive edge over the
competition make all sorts of claims to differentiate their product from that of the
competition. This will be in the form of special features etc., dressed up to look whiz bang
and sway the buying client into believing their package is better than all of the other
products on the market.
In addition to the ERP software itself software companies rely heavily on the add-on services
of implementation project management for the cream of the revenue from the sales. To
convince the customer that they not only have the ideal fit package for the target company
(60+ of companies have to modify the software so it will work for them) but they also have
in their tool kit a “Proven Path” for Implementation of the software.
When asked to provide references to back up their claims of successful sites and proven
path implementation a couple of companies are named with the rider that if the target
company wishes to contact them it should go through the software house. (so as not to
bother the reference site.)
Keep in mind software houses usually boast about hundreds of successful sites if not
thousands of satisfied customers but only offer up a few (very few) as reference sites. The
reality is all software companies have what is referred to a “Marquee” reference sites
whereby they offer incentives on maintenance, support etc., at a discount if the company
agrees to be a reference site.
A closer examination of the so-called reference sites often reveals a totally different story of
cost overruns, significant customisation and modification of software, huge internal
disruption and poor outcomes. None of this is revealed to prospective new ERP buyers who
seek some form of comfort before they buy the software.
The so-called proven path for implementation typically is not proven at all. How can a
canned process be applied to multiple industries with the expectation that one fits all?
Software houses will argue that the proven path has variations that suit different types of
industries and is modified according to the type of industry.
All of this sounds somewhat plausible except for one thing; 70% of all ERP implementations
overrun the budget by an average of 25% and in many cases by hundreds of %, are late and
don’t provide any benefit to the implementing organisation. In addition companies that do
manage to implement the system only report 50% of the benefits they expected.
If you are faced with claims of “Proven Path” implementation methodologies and quick
implementation of ERP into your business carry out detailed investigations by asking for the
full client list that you chose who you will speak to for references. My guess is you won’t get
it and flimsy implausible reasons will be proffered up.
Proven Implementation Path True or false? Based on the overall success rates of
organisations implementing ERP across the globe the conclusion can only be FALSE!