What Do You Expect From Your ERP Project?
Tuesday, April 09, 2013
For many senior executives the question of “What do you expect from your ERP project” is difficult or impossible to answer due, in the main, to lack of knowledge of the technology. For most executives the response is vague statements about improvements and replacing legacy systems due to them falling over.
It is this lack of knowledge that has the smell of disaster all over it. Not knowing what the technology is going to do and what benefits, in detail, are expected translates directly into lack of executive direction and effective support for the entire project effort.
We see many ERP projects that start out with money being budgeted for without understanding the quantum of work required or even the different software modules needed for effective operations. This approach effectively undermines the possibility of a successful ERP project outcome and ensures budget overruns through shortcuts, scope creep and compromises
The unfortunate part all of this is senior executives are of the belief that they are doing the right thing by delegating the project detail to the people in the company that understand what ERP is. From a technical implementation point of view this is fine but the issue is when significant problems occur that require senior management action the likely outcome is senior management put the problem in the too hard basket hoping it will just resolve itself or just go away.
We (Atko Global) put these issues down to lack of education on the ERP technology leading to executives believing they are just putting in a computer system to record the different transactions of the company for easy retrieval when required.
The proactive part of ERP through the MRP planning and execution modules which have the capability of generating so much benefit for the company require a change to the way planning is carried out starting with business planning linked to sales and operations planning through to materials and factory planning. If this level of planning is not driven by management then the technology capability will not be realised. ERP can provide a real competitive advantage if used correctly.
The evolution of ERP through the MRP and MRPII stages recognised the essential philosophical changes that are required to get the most from the ERP system but most of all recognised that unless the company understood, through education, how to use the system and what processes to reengineer around the technology to get the best from it the system would be of little value other than a recording and retrieval system for work being done. For many this information recording and retrieval is a major step from current systems but ERP is capable of far more if fully understood.
The expectation that the training provided from software vendors and their implementation partners will fill the education gap as to how to use the system is misplaced. Typically the people provided by the software company and their implementation partners are conversant in the software and the training house it but not in how to apply the technology in the business sense to get the most from it. They simply don’t have this level of expertise!
Knowing what to expect from the technology is directly related to your knowledge of how to use the technology to the best advantage. The cost of education is minimal compared with the potential returns the ERP technology can provide, if used correctly.