We’ve been on our current ERP system for several years now. Go-live was rough – VERY ROUGH – but we finally seem to have settled into a stable operating level. Stable yes, but it hardly seems like we made the giant leap forward that we all expected. In fact, it’s hard to tell if we made any kind of significant leap forward at all. It seems like we merely traded one set of problems for another, and it cost millions of dollars to do that! And, for what? Just so we could say ‘we operate in an ERP system’? Where are all those wonderful business insights we were supposed to have by now? We have all the reports that were promised, and technically, they all seem to work, but nobody believes them. We still rely on spreadsheets for most of our important decisions. I guess I just don’t understand…”
Average Joe - CxO
Does this story sound familiar? If so, you are not alone. Thousands of companies every year spend millions of dollars chasing the ERP dream, only to come up short. They ‘survive’ go-live but end up in ‘ERP Purgatory’ – that middle-of-the-road existence somewhere between an outright failure and a glowing success. Technically, the organization might be better off than before the digital transformation, but nobody involved believes the sizable pain was worth the minor gain.
But it’s not too late to turn things around. That promised land still lies ahead, and the waters you must navigate to get there may not be as murky as you think. Unlike the original ERP implementation project, where all the puzzle pieces had to come together all at once, ERP improvements can generally be implemented in bite-size chunks, which are more easily managed. But it doesn’t just happen. It takes a plan, and it takes a team. Here are 10 tips on how to put yourself back on the path to success with your current ERP system.
Like any major initiative – and fixing an underperforming ERP system certainly qualifies as a major initiative – there needs to be a leader appointed. Someone well respected in the organization, with a track record for getting things done, without leaving a path of destruction in his or her wake. Someone accountable to upper management, but also with an ear for what’s happening on the shop floor. In large organizations, this would ideally be a full-time position (even if it is temporary), with global responsibility.
Although there may be a lot of overlap in the knowledge and skills required to do ERP improvement work and ERP break-fix work, those two types of activities need to be managed separately. Otherwise, the urgent break-fix work will always seem to take priority over the important, but longer-term, improvement work. If that happens, little if any meaningful progress will be made on improving the overall operations.
Just as ERP systems operate in a highly integrated fashion, so too must your ERP improvement team – both in identifying and resolving problems. This will ensure that the perspective of each impacted function will be adequately considered and vetted before any improvement solution is implemented.
If you come from a culture of Lean or Six Sigma, you already understand how important problem definition is to problem resolution. After all, a well-defined problem is well on its way to being resolved. But even if formal problem definition is not a natural part of your organization’s DNA, you should still adopt this key foundational element for ERP improvement work, to help facilitate and encourage broad communication and engagement. Be open to the possibility of having to develop new measurement approaches for some of your problems.
Although the natural tendency is to work on your biggest problem first, this is not necessarily the best strategy for success. The reason why is that your biggest problem is often your most difficult problem and your newly formed team may not be up to the challenge right out of the gate. This can lead to team frustration and demoralization of the entire organization if months pass without any noticeable progress being made. Instead, consider going after the low-hanging fruit first. Pick small, relatively straightforward problems whose resolution would be felt immediately and appreciably by the organization. Achieving a few quick wins will not only build momentum, but it also helps develop and prepare the improvement team for taking on larger problems.
Although the problems you face might appear to you to be novel or unique, chances are that they are not, especially for a seasoned ERP expert. If you are struggling with a particularly challenging issue, and your research hasn’t revealed a robust solution, consider bringing in an outside consultant. Sometimes a fresh set of eyes is all it takes to spawn new thoughts on how best to tackle a tough problem. To ensure you get a truly fresh perspective, seek an independent, third-party (i.e. someone not affiliated with the initial implementation), with a reputable track record.
As an organization struggles through the challenges of a bumpy ERP go-live, the one thing everyone wants to know above all else is “when is it going to get better?”. That is why it is so important to share, broadly and frequently, what the improvement teams are doing, and solicit input from the organization. This can be in the form of newsletters, town hall meetings, visual management boards, suggestion boxes, or ideally, all the above. Establishing multiple open two-way communication venues creates hope for the entire organization and provides formal routes for individuals to have their voices heard. It also provides a platform for celebrating success, which you should take advantage of on a regular basis.
Although error-laden business processes are a rich source of improvement opportunities, they are not the only source. It is important to go where the pain is, and sometimes that pain comes in the form of a particularly laborious and inefficient business process, even if it doesn’t result in many errors. Often, simple changes can greatly improve the overall process efficiency, and give the organization a much-needed boost in morale.
As you prepare to implement changes in your current ERP system, make sure you test those changes thoroughly and completely beforehand by performing both positive and negative testing. In other words, don’t just test the specific scenarios where you are actively trying to make an improvement, but also perform regression testing on other core scenarios to ensure you don’t break anything along the way.
Inadequate organizational change management has consistently been one of the top causes of ERP implementation failures for as long as ERP systems have been in existence. Even though you may not consider your ERP implementation to be a true ‘failure’, if you are still struggling a year or more after go-live, chances are you experienced at least some of the effects of inadequate organizational change management. Don’t make that same mistake the second time around as you work to improve your live system. Make sure each improvement initiative includes specific actions to address organizational change management directly, and thoroughly.
So, if your initial ERP implementation was a rough journey, find solace in the fact that: 1) you are not alone, and; 2) your journey is not yet over. There is still an opportunity to turn things around and put yourself back on the path to success with your current ERP system. If you need guidance on how to do so, I encourage you to reach out to us. We're always happy to be an informal sounding board.