‘Tis the season where many ERP vendors are trying to meet their Q4 and year-end numbers, so they are often willing to do what it takes to get a deal done. Aggressive pricing with time limits, executive assurance that you’re their most important customer, and other deal-sweeteners are often tempting. Coupled with the internal excitement and momentum to start an ERP implementation, these incentives can be just what it takes to get an executive team off the fence to commit to their chosen ERP vendor.
While these incentives can be advantageous to companies looking at new ERP systems and they certainly shouldn’t be dismissed, it is also important to ensure that you’re actually ready to begin your ERP implementation. We see many companies that rush right into a commitment without having a clear plan for how they’re going to proceed with an implementation.
For example, one of our mid-size manufacturing clients signed a deal with our recommended ERP vendor worth over $2 million in license fees after the discount. While these license costs were heavily discounted and represented a good deal, the client hadn’t yet thought through the implications of implementation. The vendor, on the other hand, had a technical implementation plan and was ready to get an entire technical team on the ground the following week to begin installation, configuration, training, and other technical activities. Because the company did not have a clear implementation plan for activities such as an ERP blueprint, business process design, infrastructure upgrades, and other key non-vendor activities, we advised them to engage in a number of planning activities prior to engaging the vendor’s technical team. This extra bit of planning will allow them to complete their implementation with less time and money than they would if they simply jumped straight into the vendor’s software and technical activities.
So Are You Ready for Your ERP implementation? Which of the Following Apply to Your ERP Project?
- Do you have a clear ERP blueprint? As we have outlined in recent blogs and discussed with several of our clients in recent weeks, developing a business blueprint is a key first step to an ERP implementation. Much like civil engineers and home builders develop blueprints before calling in the crews and contractors, ERP systems require an effective foundation for how the software will be built. Most ERP software has best practices and pre-configurations built into the software, but only at the transactional and technical level. A business blueprint, on the other hand, defines how your standardized business processes will look and allows your business to drive the software (rather than the other way around), providing your ERP vendor with clear direction on how to build and configure the software.
- Do you have a complete ERP implementation plan in place? Most software vendors will provide a solid technical implementation plan, but they usually only account for 30-40% of total project activities. A comprehensive implementation plan should certainly incorporate a vendor or VAR’s technical activities, but it also needs to include internal and non-technical activities, such as business blueprint, business process testing, organizational change management, infrastructure upgrades, data migration, and other critical activities that are not typically included in a vendor’s plan.
- Does your plan include the six key organizational change management work streams? Most software vendors and VARs do not have strong organizational change management competencies. Since ERP software training is such a relatively small part of an effective organizational change management plan, it is important to ensure you have addressed all six of the key organizational change management work streams, which are proven to be critical success factors to a successful ERP implementation. Sample organizational change work streams include change impact analysis, branding and marketing, and employee communications.
If you answered yes to all of these questions, then you’re probably on track for an efficient and effective ERP implementation. If you answered no to any of the above, you may want to rethink your strategy and get these items in place before beginning. Contrary to what you might think, you can still enjoy the benefits of a solid year-end deal from your ERP vendor without jumping right into the technical implementation activities. This more deliberate and planned approach will help you make the best use of your time and budget.
If you your organization needs to enhance its ERP implementation strategy for 2011, consider enrolling in our ERP Boot Camp training course that takes place in March. It is a great opportunity to validate your ERP plan and make sure your implementation is headed towards a success.