Friday, March 16, 2012

ERP Business Requirements

The first clue to a pending Enterprise Resource Planning (ERP) implementation failure is a statement from upper management to the person responsible for technology stating that they need and ERP solution.   This is like predicting the path of a hurricane.  You can look at the weather models, history, and current storm characteristics, but the storm will do what it is going to do.

The ERP solution is not the problem.

The problem comes from not taking the time to determine where you are now and where you want to be in the future.   You cannot plot a course or know when you arrive at the destination, if you do not know where the destination is or what it is supposed to look like when you are there.

Ask your team, management, or requestor what they want to achieve.  Is it reasonable?  Do you have the needed resources to get there?  Do not, I repeat, do start by performing an Internet search with ERP and start sorting through the 6 million results.  There is too much information and too little way to narrow down the results to the top 5 candidates at this point in time.

Having clearly defined objectives is a key ingredient to success.  There can be multiple ones, but there needs to be some yardstick to measure results.  Oh, yes, you do need to determine the metrics of success as they relate to your organization.  For example, reduce customer returns by 20% by year end.  Increase inventory accuracy to 99% in the next year.  Consolidate the eight different systems to one.  Eliminate manual processes.

Having the objectives and metrics will allow you to calculate the time it takes to get your Return on Investment (ROI).  Given the time frame you should be able to estimate the Total Cost of Ownership (TCO) during that period.

Depending on the goals set, you may need milestones which will help gauge if you are on track and provide checkpoints for corrective action.

Try starting with a self assessment.  A trusted advisor will help in this area by helping you to define what to look for.  These will vary depending on the business.  The biggest component are the people and equally so, the culture or environment.  Getting buy-in from the top through to the person sweeping the floor is an essential ingredient.  Management needs to understand exactly how the savings due to increased efficiency will accumulate.  Office staff needs to see how the new steps in a proposed solution compare to the steps they take now.  Floor workers will be more productive, if they understand this is not going to saddle them with more work, but rather increase their efficiency without increasing the work load.  A good solution may be sabotaged by lack of commitment at any level of the organization. 

Look at the ERP solution.  Does it contain the needed modules or are they vendor integrated?  You can customize the solution yourself, but one that is already built will save a great deal of time and money, while providing more stability and a quicker ROI.

My suggestion, and I am biased here, is to contact someone like myself to help you look at what you are trying to accomplish.  Determine if it is reasonable.  Look at your budget.  Look at your time table.  Look at the key people.  Look, hear, feel the pulse of your organization.  Assemble an internal team to work with your advisor so that each aspect of change can be rated to its potential impact on business operations and implementation.  This will help in prioritization and fit with the proposed new solution.

Next identify and qualify your ERP candidates based on their fit.  Do not attempt a demonstration at this point in time.  It is too early and it is a clear sign that the ERP vendor has a one-size-fits-all approach.  There should be some dialog and question and answers before getting distracted by a glitzy demo. 

What may make sense is to discuss the top five issues with the solution provider to see how they have helped others with these challenges.  I am quite sure you are not unique in your challenges and others have already blazed a trail for you.

If there seems to be a fit between your challenges and their solution, then a high level executive overview of the solution makes sense.  It is an opportunity to evaluate the company and gage the personality match between the two organizations.  After which there should be new talks with your team to identify specific issues and possible solutions.  Each department can refine their needs and the solution provider can demonstrate how they feel their solution will address your needs.

Once you have narrowed down your choices to two or three candidates, ask to meet with the company president.  This is a great test to see how responsive they are to you and how important your business is to them.  If they do not care about you now, what happens after you sign the contract?

There are a lot of details to review and discuss.  No single article will answer all your questions.  That is why you should be contacting Dolvin Consulting right now by clicking this text and filling out the contactform.  We promise to listen and will do our best to serve you.  If we cannot help you, then we will do our best to make a referral to someone that can.  That is our promise to you.

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