A little background
When I started as a plant manager, we were running the business with two software systems. One was a well-known accounting package that did what it was designed to do. The other was a home-grown production system and we had no access to the source code. It was a constant problem. Our IT person spent half of his time keeping it running. For all that effort and cost, all it did was produce various lists of orders we had. We didn’t know our costs, our bottlenecks, or our open capacity. (That’s the short list of information we were missing.) Every decision we made was based on gut feel and inaccurate/bad data. The company knew how to make their product, but they didn’t know how to manage a production floor.
At my previous job, we had a similar situation. We then replaced our home-grown production system with an ERP system. That experience taught me the benefit of data driven decision making. We went from driving blind to driving with lights on. It was easy to make good decisions because it was clear where the problems were and where they weren’t. As the plant manager, I knew a good ERP system would vastly improve our production floor. I was passionate about this. I pushed for, and bought an ERP system. We implemented it, improved greatly, and then I left. My passion for managing a production floor didn’t match my passion for teaching people how good systems and good data are the key to improvement. I wanted the world to know this! Throughout my career at Visual South, that passion hasn’t cooled.
Since that time, I’ve worked with hundreds of companies, and I’ve noticed a common thought process when it comes to implementing ERP: Going live with the new ERP system becomes the end goal; and that is not a good thing. Yes, you read that right. Going live with the new ERP system should be a step in the process of improving the company’s performance. That’s the end goal; not going live with ERP. Going live isn’t the finish line, it’s the starting gun.
To understand why this is so, let’s walk through a typical process a company goes through to purchase ERP.
The epiphany. At some point – and it’s usually out of frustration – someone in an organization says, “There has to be a better way!” This is in reference to dealing with late shipments, not having information that is needed, spending too much time trying to acquiring it, or working hard but not seeing results.
The airing of the grievances. Once people start thinking about a better way, they tend to think of it as it relates to business issues. Things that take too long, bad on-time shipping performance, making promises they can’t keep, a shrinking bottom line. In other words, all the symptoms of not properly managing the company because of the lack of proper tools. This information is GOLD. It is a blueprint of what the organization needs to solve to become a better performing organization. Sadly, this often fades into the background.
The search. This is where the “Airing of the grievances” information starts to fade. As the organization talks to vendors about ERP, the focus now becomes ERP. “Can it do this?” “Can it do that?” “That’s cool!” Don’t get me wrong, features in the ERP are important. But the overall goals of the company are more important. These goals need to be used to evaluate potential solutions. The tendency for the company is to focus on the software though. I get it. When you look for a car, you focus on the car. This is different though. ERP is a tool that an organization uses to achieve what they want to achieve. Hence, the goals should always be the focus. (During our sales cycles, we usually need to keep driving this point, because it’s so critical to the overall success of the project.)
The implementation. Implementations involve a lot of change. Change is difficult. Employees are working on the new system without getting any benefit from it. No one wants the go-live to be a failure. So, it’s understandable that everyone wants it to be over. It’s understandable why going live is seen as the end.
A new beginning
It's not the end though, it’s the beginning. Going live gives the organization the tools and data they were missing. All of that is useless if it’s not used to enact change. Going live provides opportunities. It’s up to the organization to seize the opportunities.