ERP: The Journey Doesn't End With Live Running
Thursday, May 16, 2013
The ERP journey for most organisations is a frustrating black hole in which money disappears ending in disappointing outcomes. For the most part organisations see an ERP project as a technology project in implementing a new or upgraded computer system. The full impact of decisions made or not made long before the software is purchased can have a major impact on the overall project outcome.
For the majority of organisations the objective is to turn the ERP software on in the belief that the project is completed at that stage or that they will achieve immediate benefits. The reality is turning the software on is simply another stage in the implementation of the project. Declaring the project complete at the go-live date is wishful thinking of organisations that have probably gone through a nightmare implementation project of delays, budget overruns, software modifications and internal disruption. Once the system is turned on what becomes obvious is the work that has not been done during the run-up to live running.
The real impact of shortcuts taken during the implementation of the system will now come back to bite with a vengeance. Missing procedures, training shortcomings, data clean-up that was deemed could be done after the system goes live now produce incorrect information through the system processing and becomes a nightmare to sort out what is good and what is bad. Other methods are used to get information as the system is not providing the accuracy of data needed.
In manufacturing environments requirements planning numbers are wrong, purchasing information incorrect impacting all of the way through inventory, production, costing and financial reports.
For those few organisations that have managed to survive relatively unscathed through the implementation project as well as the projects that have hit problems live running presents a whole set of new challenges. The company has to learn how to manage and use the data effectively for decision support and running the business.
Live running is simply another stage in the overall ERP project and declaring the project over at the live running date. There is still a lot of work to be done tidying up issues that were not considered or ignored now have to be completed. Removing people from the project too early simply results in having no resource to undertake these tasks leading to outstanding issues that can be a real headache for the organisation.
Depending on the problems that remained unresolved during the implementation of the project some of these issues can be extremely damaging to an organisation and can cause a loss of business, loss of visibility over the business operations and in some cases impact financial results or even bankruptcy.
We get involved in many ERP projects post-live running as the systems have failed or been minimised due to them not effectively working. The recovery of poorly operating systems is typically a reflection of the way the company has gone about the initial activities of their ERP project and are looking for a magical solution to the problems being experienced.
There are two messages here:
1. Look at the ERP project as a business change project and consider the broader issues and not just as a software implementation (26 steps)
2. Keep a core team together pot-live running to deal with any issues that arise during live running. With so many ERP projects ending up as failures or under-performing the message is out there for all to see. The way we approach ERP projects needs to be changed if we want better outcomes!