Why are big ERP software implementations so painful?

June 21st, 2012 11:49 am Category: Enterprise Resource Planning, Global Supply Chain, Optimization, Risk Management, SAP Integration, Supply Chain Improvement, by: Ted Schaefer

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I was sitting on the plane the other day and chatting with the guy in the next seat when I asked him why he happened to be traveling.  He was returning home from an SAP ERP software implementation training course.  When I followed up and asked him how it was going, I got the predictable eye roll and sigh before he said, “It was going OK.”  There are two things that were sad here.  First, the implementation was only “going OK” and second, that I had heard this same type of response from so many different people implementing big ERP that I was expecting his response before he made it.

So, why is it so predictable that the implementations of big ERP systems struggle?  I propose that one of the main reasons is that the implementation doesn’t focus enough on the operational decision-making that drives the company’s performance.

A high-level project history that I’ve heard from too many clients looks something like this:

  1. Blueprinting with wide participation from across the enterprise
  2. Implementation delays
    1. Data integrity is found to be an issue – more resources are focused here
    2. Transaction flow is found to be more complex than originally thought – more resources are focused here
    3. Project management notices the burn rate from both internal and external resources assigned to the project
  3. De-scoping of the project from the original blueprinting
    1. Reports are delayed
    2. Operational functionality is delayed
  4. Testing of transactional flows
  5. Go-live involves operational people at all levels frustrated because they can’t do their jobs

Unfortunately, the de-scoping phase seems to hit some of the key decision-makers in the supply chain, like plant schedulers, supply and demand planners, warehouse managers, dispatchers, buyers, etc. particularly hard, and it manifests in the chaos after go-live.  These are the people that make the daily bread and butter decisions that drive the company’s performance, but they don’t have the information they need to make the decisions that they must make because of the de-scoping and the focus on transaction flow.  (It’s ironic that the original sale of these big ERP systems are made at the executive level as a way to better monitor the enterprise’s performance and produce information that will enable better decision-making.)

What then, would be a better way to implement an ERP system?  From my perspective, it’s all about decision-making.  Thus, the entire implementation plan should be developed around the decisions that need to be made at each level in the enterprise.  From blueprinting through the go-live testing plan, the question should be, “Does the user have the information in the form required and the tools (both from the new ERP system and external tools that will still work properly when the new ERP system goes live) to make the necessary decision in a timely manner?”  Focusing on this question will drive user access, data accuracy, transaction flow, and all other elements of the configuration and implementation.  Why? Because the ERP system is supposed to be an enabler and the only reasons to enter data into the system or to get data out is either to make a decision or as the result of a decision.

Perhaps with that sort of a focus there will be a time when I’ll hear an implementation team member rave about how much easier it will be for decision-makers throughout the enterprise once the new system goes live.  I can only hope.

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