Why Independent ERP Software Consultants are a Must-Have for Successful Digital Transformations

Written By: Eric Kimberling
Date: April 14, 2023
Independent ERP Software Consultants

Independent ERP Software Consultants is not a common occurrence in the industry. Therefore, the question arises: why would you require an independent ERP consulting firm?

https://www.youtube.com/watch?v=3GyCSsGomik

Third Stage Consulting is an independent consulting firm. We assist clients in selecting and implementing technology and guiding them through their digital transformations. Nevertheless, we are not associated with any software vendor and do not receive any commissions or kickbacks. Additionally, we do not have any vested interest in any client's digital strategy decisions.

Thus, the question arises: Why do we need an independent consulting firm? How can an independent consulting firm be helpful, and how could it ensure success for a digital transformation? These are the topics I intend to discuss today.

Problems with Project Bias

First, it is crucial to understand project bias and its influence on digital transformations. This understanding leads to an explanation of how independence and unbiased consulting can benefit a transformation. To begin with, what biases can negatively influence a project? During the evaluation process where the digital strategy is defined and potential options are evaluated, an unbiased and objective advisor is essential. This advisor can help understand options, weigh pros and cons, and provide realistic implementation time and cost.

Independence is vital during this phase to select software that fits your organization and negotiate a suitable agreement for your team. Project bias continues to be a problem even after selecting software. Third parties may attempt to force the use of technology in ways not intended, leading to organizations over-investing in unused technology, resulting in shelfware software.

During implementation, project bias can undermine the process by hiding project risks and problems to preserve revenue streams and software footprints. These are examples of how project bias can undermine a digital transformation. Now, let's discuss how independent third parties can assist through each major phase of a transformation.

https://youtu.be/fWtW1td2WIw

Software Evaluation and Selection

During the digital strategy or software selection phase, companies have many options to choose from in terms of enterprise technologies. With the industry continually creating more options than ever before, it can be overwhelming to determine the right system for your organization. Adding a biased party to the mix can result in an incomplete picture of the best solution. Independence is essential during this phase to decipher what's real and uncover deficiencies and blind spots.

It's important to know the deficiencies even after software selection to mitigate risks. An independent third-party advisor can help during the evaluation process and in the negotiation process to ensure a fair deal with the software vendor. An objective software negotiation device is powerful as the third party has no vested interest in the outcome, ensuring they solely look out for your best interest.

https://youtu.be/Hwmj10Zx9XU

Implementation Planning by Independent ERP Software Consultants

During the implementation planning phase, independent ERP consultants can assist in setting a course for success in your digital transformation. Often, sales reps and software vendors come in with an overly optimistic view of how long a project will take to downplay any risk and show a best-case scenario of how you might deploy their technology. However, rarely do those assumptions come true, and the implementation takes longer and costs more than expected.

Relying too much on the vendor and their proposed plan is problematic because it's typically incomplete. They don't have all the pieces required for success during a digital transformation. Yes, they have the software technology workstream, but those proposals often don't address organizational change management, process improvement, architecture, data and integration, overall program management, and general internal decision-making. All of those things take extra time and money.

By relying solely on the software vendor's proposed project plan, you're going in with an unrealistic and biased view of what the implementation will look like. Therefore, having an independent third party who is experienced in the space can help counter this bias.

Implementation

During implementation, after evaluation and planning, independent consultants can provide value to an organization. For example, they can ensure that the implementation represents the organization's best interest, not the vendor's interest. Vendors are motivated to get the organization up and running as quickly as possible, but not at the expense of putting the organization at risk. An objective, realistic view of the implementation's timeline and all its moving parts is key, not just the software implementation itself. Independence and objectivity will help organizations focus on factors that make projects successful, which are typically unrelated to software vendors.

Examples of such factors include organizational change management, effective program management and governance, overall ownership of the project, executive and internal alignment, re-engineering business processes, and a business-focused approach to transformation. These factors are generally not within the purview of software vendors, so an organization needs someone to advise them in those areas. Independent consultants, who represent the client and the implementing organization, are focused on the most important factors, including software, that are critical to project success.

https://youtu.be/EykTnZYshK8

How to Choose The Best ER independent Consultants

Here are some ways that independent ERP consultants can help with your digital transformation. How do you choose the right independent consulting firm? It's important to focus on your criteria and evaluate your options. While I believe Third Stage Consulting is the best option for most organizations, it's important to make your own decision.

One should ensure that the independent consulting firm being hired is technology agnostic. This means that they do not receive commissions from software vendors and do not focus on one type of technology. Large system integrators such as Deloitte, Accenture, KPMG, and Capgemini should be ruled out as they have specialized practices on certain technologies, leading to bias within the organization.

Ensure that the independent consulting firm you're considering is truly technology agnostic and not influenced by commission or kickbacks. Some organizations may claim to be independent but have hidden deals with sister companies or other organizations to receive commission. To address this, you could ask the consulting firm to include a clause in the contract that guarantees a full refund if they are found to be affiliated with a software vendor. This would protect you against any potential conflicts of interest.

Ensure that the independent advisory firm you select has expertise in both selection and implementation. This ensures that you have a partner that can guide you through the entire life cycle of digital strategy and software evaluation, implementation, and post-implementation. Moreover, their hands-on experience with implementation reinforces their objectivity.

Look for an independent consulting firm that has experience with multiple technologies, has a broad team and toolset, and does not rely on tribal knowledge. If you are a larger or multinational organization, consider an independent consulting partner with experience in your industry and across different geographies where you operate. They should also have boots on the ground worldwide. This is something that we offer as a bonus.

If you are looking to strategize an upcoming transformation or are looking at selecting an ERP system, we would love to give you some insights. Please contact me for more information eric.kimberling@thirdstage-consulting.com

Be sure to download the newly released 2023 Digital Transformation Report to garner additional industry insight and project best practices.

Kimberling Eric Blue Backgroundv2
Eric Kimberling

Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.

Author:
Eric Kimberling
Eric is known globally as a thought leader in the ERP consulting space. He has helped hundreds of high-profile enterprises worldwide with their technology initiatives, including Nucor Steel, Fisher and Paykel Healthcare, Kodak, Coors, Boeing, and Duke Energy. He has helped manage ERP implementations and reengineer global supply chains across the world.
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