Like any business relationship, that between ERP vendor and client is a balance of trust and circumspection. That trustis built by both valuing your vendor’s expertise and demanding from them the highest standards.
The 2016 Panorama Consulting Report (http://panorama-consulting.com/resource-center/2016-erp-report/) on enterprise resource planning software found only 57% of respondents considered their new software a “success”.
What should you know in order to ensure a successful ERP implementation? Here are 12 things most software vendors will never tell you.
1. Secrecy has no place in an ERP project
Secrecy has no place in an ERP implementation project. A budget should be declaredup-front and the vendor challengedto say whether project objectives can be met with in that constraint. Too good to be true? Low as well as high estimates should be challenged. Inevitably, something will have been missed.
2. Avoid a lengthy sales cycle
Avoid the temptation to start the ERP project with a lengthy sales cycle, trying to understand all requirements in order to obtain highly accurate estimates and commitments from vendors. Although this looks like an attractive idea at first glance, this detailed RFP approach is more likely to contribute to project failure, because the RFP and formative design will be based on as-is functions and processes which may be swept aside when improved by the new functionality.
3. Let ERP vendors extract the truth
ERP vendors are experts at extracting the truth from reluctant process owners. A day spent on functional analysis without the supplier’s input is a day wasted – they will have to go over it again properly and pose the awkward questions that staff may not be brave enough to ask. Worse still, thesubject-matter experts will resent having to cover old ground.
4. Beware software consultants who rush
Beware ERP consultants who rush straight into the solution design without having a complete understanding of the whole business function (including the unhappy path). Missed requirements can cause a complete redesign – these last-minute changes cost ten times more to fix than timely requirements, because everything has to be recoded and retested.
5. Ask the tricky questions
Interview every design stream lead and ask them the tricky questions about the company’s processes. Find some little-known function (e.g. For a Microsoft Dynamics AX (https://ax-dynamics.com/microsoft-dynamics-ax/#dynamics-ax-overview ) implementation look on Microsoft TechNet) and ask them to design a process that uses it. If they say that development is required, they are likely amateurs.
6. The right contract for your ERP system
Never agree to a vendor’s ERP implementation contract without stated deliverables and a price for each deliverable– one for each business objective. Do not accept vague promises to ‘help’ you deliver, ‘assist’ your team or ‘manage’ the objectives.The vendoris being paid to design, build, configure, populate, rectify, deliver, implement and guarantee the performance of the system – accept nothing less.
7. Licence sales
ERP vendors make a sizeable margin on licence sales and may be encouraged to sell into quarterly targets. There is no sensible way to predict client licence requirements before analysis, design and organisational change are fully defined. It is perfectly feasible to start the application build on a 10-user system and add more seats on a just-in-time basis. Support fees will be paid on all licences from day one of their purchase, which has zero ROI – do not buy licences ahead of time.
8. Resource your ERP project properly
The project must be resourced properly. Ask in the office for anyone with 50% time to spare to put their hand up… Do not be deluded that a major software project can be accomplished solely by process owners and super-users who already have a day job. Yes – the best people must be put into the design effort.
9. Do the data cleansing NOW
Do the data cleansing NOW.The single greatest cause of a go-live postponement is poorly planned and executed data migration. If the data can’t be sorted out when the pressure is off, there’s no chance when the heat is on.
10. Gear up for testing
Gear up adequately for the huge testing effort needed when the software build is delivered.The software, configurations, migrated data and security settings must be tested promptly as they are being delivered,otherwise the warranty will have expired long before defects are found.
11. Challenge slippage
Ensure that the vendor’s system can capture concise data for each business objective/work-stream, and insist on Monday-morning progress reports. These must state the percentage complete/time to finish. Slippage must be challengedas soon as it occurs. Reserve the right to replace team members who don’t keep up.
12. Enterprise resource planning at warp speed
Technology moves forward at warp speed, and getting left behind leaves businesses at the mercy of the competition.An ERP system should not only be able to scale with the agency, but also have the R&D backing to keep it on the leading edge. Make sure the vendor is resourced for the long haul.
About the Author
Russell Lawrence is CEO of ANEGIS Consulting (https://ax-dynamics.com/) and a professional accountant with 24 years’ experience in implementing over 120 Microsoft Dynamics AX-family (https://ax-dynamics.com/microsoft-dynamics-ax/#dynamics-ax-overview) ERP solutions. ANEGIS is developer of AXAD (http://axadsystem.com/), a new Dynamics AX vertical for the advertising and media industry.