Overcoming ERP Implementation Challenges

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By Tom Sonde

Not happy with your enterprise resource planning (ERP) system? You have plenty of company. Studies report that up to 90 percent of companies are not satisfied with their ERP systems. There is plenty of blame to go around. Depending on where you sit you can point fingers at the software provider, the software selection committee, the IT department or the user.

The favorite target for many is the software industry. Several companies have a long history of over-promising and under-delivering. Most critics may be justified in their beliefs however not all of ERP’s ills can be blamed on the software. One area that does not receive enough attention is the actual implementation process. Many a problem or system shortcoming might have been avoided if the implementation team had addressed the issue properly. Unfortunately, many victims of ERP’s problems do not point fingers back to the start because their employees were part of the implementation team.

Implementation Shortcomings

Most ERP implementation teams include process owners that have limited experience with large IT projects and do not know what to ask or demand. In addition, the only system they know is the old system and for many it is hard to visualize the new one until it is delivered. Adding to the mix are external consultants with knowledge of the new software but limited understanding of actual business processes and even less understanding of their client’s business. In many cases the consultants become the experts on the system and when they leave they take the expertise with them. Throw in problems typical to any large project such as scope creep, a lack of resources, inappropriate resources, personnel turnover, inadequate funding and/or an unrealistic go-live date and there is little chance that a system will perform as the software developers planned.

The Good News

There is some good news – there are companies that have found that by taking a second look at how their system and related processes work they can make improvements without replacing products or purchasing additional software. Companies are fixing the technology they already own and have in place.

Each software solution has its own shortcomings, many of which can be traced back to three key areas: 1) how well the processes were married to the technology, 2) how the system was setup and 3) the type of training people received.

Organizations may never achieve the success they hoped for when initially purchasing their software. Incremental changes, however, can provide significant benefits. Investments made on these improvements typically show a positive return on investment, some in less then a year. By addressing the three areas mentioned above, companies have been able to unlock additional value from their systems.

Marry Technology to the Process

Many technology solutions fail to achieve real success because to varying degrees the implementation team drops the solution on the process owners’ laps, leaving them to figure out how to make the best use of it. Technology works best when it is aligned with process. Leaving it up to the users to figure out how to use a newly delivered system significantly decreases the opportunity for it to deliver on its potential.

Companies that have had success improving their ERP systems have found that simply trying to fix the software is not enough. Success comes from taking a big picture view and addressing both the technology and the process. Uncovering problems from the process owners perspective provides far more insight as to what requires improvement.

In some cases the software is functioning properly, the staff is not using it correctly.One human resources organization found that over five years after go-live the staff continued to track certain employee histories on manual index cards. Since the implementation team never loaded the history it was easier for the staff to continue to use the index cards rather then have the old data on index cards and new data in the system. Once the problem became known, it was not difficult to get the data loaded into the system and eliminate the index cards.

Keep Talking and Listening

Process owners are often frustrated to hear the standard answer, "the system can’t do that." In many cases, the statement is true – the user is requesting something that is impossible. But there are times when the software is capable of the requested function; it may, however, require some work. Sometimes a request may only require a day or two of systems work in order to eliminate hundreds of hours of labor.

Other times the request may require months of effort to get the change up and running. What usually never gets past the discussion phase is a calculation of cost vs. benefit. A five-month project may be worth the effort if it eliminates enough work. One accounts payable department reduced its staff by 30 percent after its systems workflow functionality was turned on. Obtaining funding for an improvement project is a much easier sell once one can articulate the benefits it can provide.

Companies that have improved their ERP systems have found that the more one understands both how day-to-day processes work and their systems capabilities, the more can be accomplished.

Train Both Process and Technology

Many implementation teams deliver technical training programs on how to use the new system. The majority of programs are technical in nature and are created by technologists. Their focus is on the system itself, how to log in, navigating the various screens, writing reports, printing, etc. Limited time, if any, is spent showing the process owner how the system works with their processes. Training programs often leave it up to the process owners to figure it out. Unfortunately, not all process owners make the leap and determine how to get the most from the new system’s functionality. Most learn how to accomplish their day-to-day requirements but few have the time or experience to capitalize on it.

Many companies have found success by returning to a company to provide additional training, even if the system has been in place for years. The key difference is that the additional training combines both process and technology. The training is developed after conducting a process review and walking through the end-to-end process to uncover the real needs of the users.

Most process reviews find a combination of shadow processes, spreadsheets, an extensive use of paper, downloading of data and/or the use of external databases – all of which were created to perform tasks that should be – and could be – performed by the system.

Process reviews sometimes uncover surprisingly simple requirements. One process review found an accounts payable department making a photocopy of every check and related advice prior to mailing them to vendors. They were doing this because it was the only way to access information when a vendor called about an unpaid invoice, because the department’s employees had not been taught how to get the information directly from the system.

Training that marries system functionality to the users’ specific needs provides significant productivity improvements both for the process owner and the system itself.

Summary

Unlike the massive disruption created by an initial implementation, improvements can be accomplished gradually. A team can focus on one process area at a time. Most successful projects begin by focusing on processes that provide a quick win. Once the team has created some credibility they can move to more complicated areas.

While one can debate whether their system lived up to expectations, there is little doubt that addressing the issues caused by the implementation can provide significant benefits.

During your ERP implementation, keep an eye on the following common complaints, facts management should know and benefits provided:

Common Complaints

• Customers, employees and vendors continue to complain
• Too much paper is used
• Significant amount of manual data keying and re-keying
• Information is not easily accessible
• Workarounds, renegade processes and complicated spreadsheets exist
• External databases/data warehouses supplement the system
• It takes too long to get basic work accomplished
• The system did not deliver on its promises

Facts Management Should Know

• Many system issues are not the result of faulty software, but are caused by a flawed implementation
• Improvements provide a positive return on investment
• Improvements can support Sarbanes-Oxley compliance
• Changes will not require an army of external consultants
• Improvements can be accomplished in stages
• The project will not cause the same upheaval as the initial system go-live

Benefits Provided

• Increased productivity
• Improved/quicker access to data
• Improved customer service
• Reduced costs
• Improved quality
• Lower error rates
• Improved data integrity
• Fewer complaints and inquires from customers, employees and vendors
• Improved employee moral
• Increased revenue
• Improved controls and Sarbanes-Oxley compliance

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