Take a Wider View to Deliver ERP Success

By Roger Lovis, Technology and Management Consulting Partner, RSM

Roger Lovis, Technology and Management Consulting Partner, RSM

The shape of enterprise resource planning (ERP) implementations over the last two decades has significantly and dramatically changed. However, despite 20 years of experience, we continue to hear horror stories of delays, cost over-runs, and lack of adoption. Understanding the key factors, recent innovation and their influence on the shape of a well-managed ERP project is important for any business to implement real change. But, with so much advancement and disruption in the market, what is the right option to choose and what are the pitfalls to avoid?

Emerging Cloud SaaS

The emergence of built-for-cloud ERP, primarily Software as a Service (SaaS) such as NetSuite, Xero, Workday, and Microsoft’s Dynamics Business Central and Finance & Operations, has disrupted established software vendors and will continue to make gains across the market. This intuitive software, which is simpler and quicker to implement than more traditional products, reduces time and cost of implementation and thereby lowers cost of ownership. The availability of pre-built sector models, either through the vendors or their partners, is intended to further accelerate implementation timescales.

The core benefit of Cloud SaaS ERP is the facility to regularly upgrade to the latest version of software. This allows businesses to take advantage of the latest features of the product and remove the need for periodic and disruptive re-implementations. This is predicated on keeping as close as possible to vanilla software. Although this might sound restrictive, there is a fair degree of flexibility within the core of most modern ERP, thereby removing the need for unnecessary modifications.

Widening ERP Ecosystems

Modern ERP has embraced the concept of extending the available functional footprint through the adoption of an ‘ecosystem’ including partner products and apps. This provides greater flexibility to include best of breed products, with ready-made (and maintained) connectors. This is a step shift from the former mantra that the ERP must do everything.

In addition to proprietary tools provided by the ERP vendors, the parallel emergence of simple and intuitive integration software, such as Dell Boomi and Mulesoft, can also provide a consistent and simple corporate integration approach.

Integration may still form part of the project critical path if a business has a complex legacy system landscape.

The next step in the evolution of the ERP solution will be an increasing adoption of AI and robotic (RPA) technologies to ‘fill in’ the repetitive, but unavoidable gaps between or within systems. We are also witnessing early exploitation of blockchain technologies around particular cooperative processes (particularly supply chain) although integration through to ERP is less well established.

Emphasis on Business Change

The need to align closely with vanilla software switches the pressure of an ERP implementation from technology development for business change and adoption. More sophisticated and comprehensive approaches are needed to maximize adoption and minimize business disruption. Merely introducing a training approach may not be enough and may need to be accompanied by a defined communications plan, visible leadership alignment, business change agents, and other similar measures.

A common challenge is the agreement of standard and common processes across departments or subsidiaries, and avoidance of rebuilding a current solution. Businesses should lean on defined right practice processes and consider who will ultimately provide the design authority and approve the designs.

Finally, it is a mistake to consider Business Change as just a set of separate activities. The principles of change should run through the project structure, approach, and ethos. Clear accountability, ownership, and engagement of the business are critical to the success of an ERP project regardless of size and scale.

Strong Governance and Approach

Governance principles have coalesced over the last decade primarily in-line with industry standards such as Prince II. Successful delivery requires absolute transparency from the project manager on current and forecast status in order to escalate issues or blockers to the Steering Committee in a timely manner. Projects rarely go to plan, and having a mature understanding between the project manager and Steering Committee will help to navigate the waters of uncertainty, lack of commitment and indecision.

The traditional components of governance, such as clear team structure (and defined roles), scope change management process, RAID log, project plan, are well understood and should be in place. New tools, such as Google Docs or more latterly Microsoft Teams, are emerging for team collaboration and document sharing and ultimately make the team more efficient.

Increasingly companies are also more prepared to adopt a minimum viable product (MVP) approach for the implementation to avoid challenges of a never-ending scope. The benefit of this approach is that a business can reduce initial timescales, reduce risk of failure, and allow the solution to stabilize before commencing further project activities based on a sounder judgment on what changes are necessary.

Take a Wider View

Modern ERP implementations should be considered as business projects facilitated through the replacement of underlying technology. IT has an important role to play in support of these projects and typically has a good understanding of the end-to-end processes, and will play an important role across integrations and data tasks. The business needs to consider practical solutions and understand its commitment for successful delivering these projects.