ERP: Success is Managing ALL the Issues
Friday, April 12, 2013
Introduction of the book “ERP The Great Gamble”
The many ERP projects we have analysed and the projects that have hit problems reveals a lack of knowledge on the issues that are involved in implementing successfully ERP projects. An ERP project is a technology that integrates all of the different business departments electronically to better decision making and to provides real time information on the operations of the business.
The original MRP and MRPII were developed back in the 1960s-1970s for primarily the manufacturing and distribution industries. Originally the focus was on providing better tools to plan and purchase materials as a better method than the min/max method of inventory replenishment. Since the name change in the 1990s the technology has been marketed to appeal to a much broader business community and was rebadged to the name ERP (Enterprise Resource Planning).
Since the rebadging of the technology to ERP an industry has grown up around it and we now have experts, software companies, consulting companies all tapping into what is a 50 billion dollar industry.
The industry success rates for ERP range from 30-45% success but even that hides a worrying statistic. Even those companies that report successful ERP implementation only obtain around 50% of the benefits expected despite paying millions of dollars to so-called experts to advise and guide implementations.
So what is the problem here? The technology starting from the MRPII days has been around for more than 35 years and we still have abysmal success rates!
There are a number of factors at play here:
There is an industry that reaps huge profits from keeping the technology clouded in obscure terms more designed to keep the gravy train flowing than revealing the simplistic nature of the technology for fear of losing revenue.
There are the users whose management believe they are dealing with a computer technology that needs to be relegated to the tech heads in the company due to the technology component of the software.
There are the IT people struggle to get effective traction as people see ERP as computer system and systems aren’t their business.
There is the ERP project manager and his team attempting to implement the technology under all of the constraints a non-understanding management put on them in regards to resources, budgets, timing and pressure over delays.
There is an ERP vendor and his consultants milking every dollar they can out of the project using the corporate lack of management involvement and resources to blame the client for delays
There are the users at the coal face who don’t really understand what the company is trying to do so don’t commit to or pay due diligence to what they are required to do.
It really isn’t terribly surprising that the projects fall into a heap despite the best efforts of the ERP project manager and his team.
The reality in all of this is that ERP is not just a technology project and for it to be successful there are a lot of other issues that need to be managed and dealt with long before the technology component is even considered.
For some time now we have listed and referred to the 26 steps our failed ERP project analysis has revealed. These are steps that are transparent and quite obvious when pointed out. Unfortunately for most organisations they believe they are too far mired down into their project to take a breath and review where they are at. The reality is there is a lot to be gained by taking a slight pause and reviewing where their strategy is taking them.
To assist this we have now produced a book called “ERP The Great Gamble” A senior executives resource handbook on understanding and ERP project.
This book does not deal with the technical issues of ERP software but looks at all of the issues that will be involved in an ERP project from making the original decision all the way through to turning the system on using the 26 steps to explain the issues the organisation will face from a management perspective.
This book is written in laymans terms aimed at non-technical senior executives, management, project management and project teams to enable them to recognise potential problems and deal with them before they impact your ERP project.
The book is not a tome that managers would find tedious in reading and understanding and the managers that we have provided advance copies to have all come back and said that it has opened their eyes and believe it will make a major difference to their approach to either embarking on an ERP project or reviewing their existing ERP project.
This book will be formally published in July of this year but we are able to make advance copies available in pdf format for any of our readers who want a copy. Price AU$4.50 This book contains the 35 years of experience of the author and is experience worth.