Are you a part of Enterprise Resource Planning (ERP), selection projects? ERP selection is something that most manufacturing professionals have only experienced once or twice in their careers.
Why are ERP transitions so rare? It is expensive and time-consuming to evaluate and select an ERP solution. It can also waste a lot of time and money. Optimizing and transforming companies is risky. They require proper investment. These projects can be disastrous if they are not done correctly. If done correctly, new technology can provide a tangible, quantifiable competitive advantage.
How can you tell when it's time to make a change? Sometimes, an ERP system or another enterprise solution that worked well years ago may not be the best fit for current business realities. Perhaps your team relies on shared drives and spreadsheets to work in silos with different versions and is losing data accuracy. Perhaps you are subject to regulatory changes or new industry requirements. You may find it difficult to adapt and comply. You may also find yourself confronted with the harsh truth about the inefficiency of your ERP system. As you struggle to manage inefficient processes, you will discover that your infrastructure is unable to support your manufacturing operations as they move towards digital transformation.
Over the course of my career, I have been involved in or led a few hundred of these projects as a consultant. Many others have failed to achieve the desired outcomes and many of them have not been successful. I know what works. These tips will help you prepare your company to select and evaluate an ERP solution.
Establishing the right foundation is key to a successful ERP project. An organization must have a clear strategy before they can talk to vendors or look at demos online.
Executives often make their first mistakes at this step. When it comes to ERP solution selection, the old saying "you don’t know what you don’t know” rings true. C-level executives often limit their ability to achieve success right away. They rely only on word of mouth and consult with their peers in the industry. While referrals from trusted sources can be a great source of confidence, it is dangerous to rely on anecdotal evidence regardless of its origin. While one resource might have had a great experience with a vendor, another may have had a different experience. Who is to say which one is correct? Decisions based on personal evidence may lead to the uninformed buyer having low expectations to not see the value in the product, and the selective buyer who has unreasonable expectations to never be satisfied.
When deciding on an ERP solution for your company, don't just rely on the expertise and ideas of employees. There is a lot of technology available for companies to review. Companies must decide whether a particular advance is beneficial to their business and then determine the best way to implement it. While most organizations have a lot of resources that have a deep understanding of technology and change, how many have experience with modern ERP solutions? Are they familiar with the best practices in ERP solutions for your industry? Are they able to tell you which practices should be continued and which should be discontinued?
Form a team
Next, you need to allocate internal resources and empower the team to achieve an award-winning ERP project.
Choose a core team. Choose a project manager that is both a driver and a communicator. This is the most important step in the selection process. Give the person the resources and time they need to complete the task. A project manager will usually dedicate 100% of their time to the ERP selection and implementation. Some parts of the project may require core team members to devote up to 80% of their time. Burnout is a common outcome of core team members trying to balance their work and design a new system.
What skills are required for project managers to be successful in a technology project? The first is to be able to understand the project's resources, tasks, timeline, and desired outcomes. While a good project manager must be able to make informed decisions, they shouldn't invest in the current state. Because some of the veterans in an organization are too keen to duplicate current state processes, it is possible for groups to be impeded from successful technology transitions. These processes have been a lot of work, investment, and pride. However, a technology transition can open the doors to positive change. These resistors can be identified by a solid project manager who has the ability to provide the right resources to coach and empower their team. Before the right time and resources have been committed, no initiative should be given green light.
It is important to consider the opinions of others when assessing your situation and determining how you can move forward. It doesn't matter if you're looking for an advisor vendor (rare), a consulting firm, or a mixture of both DIY and professional databases. You need to get objective and current information that will allow you to compare your ERP with other companies and the entire industry. A partner who is familiar with all the pitfalls and how to avoid them is a good choice.
It is worth investing in outside assistance to document the current state of affairs and plan for the future. This knowledge will provide the basis for a thorough evaluation and help to launch a successful implementation. Everyone benefits from team exercises that assess where you are starting and assign future targets. This is for everyone, whether the user performs a few tasks or the person responsible for the entire process. Everyone will not start from the same place or even the same chapter. These exercises allow teams to identify their roles and work together to determine how things are being done. You can then establish requirements for how new software will be evaluated once you have defined the current and future state processes. Evaluations often focus on functionality and adaptability.
The foundation for your future success is laid by how you begin the ERP selection process. Preparation should include socializing the strategic goals, gathering the team, and inviting true experts to help you assess where you are at the moment.
Your organization will be different if you are able to evaluate and implement solutions that are unique.