Attitude isn’t everything
I’m a fan of a “can-do” attitude. Having a positive attitude helps you overcome obstacles and get through anything life throws at you. If a new ERP implementation in a manufacturing industry is something life will be throwing at your organization, a can-do attitude is the right attitude for the implementation team to have.
Don’t stop there though, because attitude isn’t everything. If I need surgery, I’m not just looking at the attitude of the doctor. I want to know about their training, experience, success rate, etc. An inexperienced doctor with a good attitude isn’t going to cut it (or me).
The same rules apply for implementing ERP. You need a strategy; then you need a plan on how to execute that strategy. Experience is an important element throughout the entire process. During the execution phase, that can-do attitude comes in handy, but it can’t overcome the shortfalls created by not having a strategy or a plan.
Got business goals?
Before any strategy or plan can be developed, you need goals. Not ERP software goals, but business goals. Business goals have nothing to do with ERP software. Here are some examples of business goals:
- Maintain a minimum gross profit of nn.n% for product codes xxx-xxx.
- Maintain a minimum inventory accuracy of nn.n%.
- Maintain a minimum on time delivery of nn.n%
Notice how none of the above goals have anything to do with ERP software? You can’t achieve these goals with the software alone. Developing new procedures that take advantage of the software’s functionality with the business goals in mind is how you get there. Without business goals, all you end up doing is an ERP implementation. You learn how to do the same tasks in new screens. You may feel like running your business on your new ERP is an accomplishment, and I guess it somewhat is. However, if you still don’t know or trust cost, inventory, or on-time delivery information coming out of your new ERP, what have you really accomplished?
Developing business goals and building a strategy and plan around those goals allows you to aim higher than the goal of implementing ERP. Your goal becomes achieving benefits with your ERP in your manufacturing environment.
A final note on business goals. In my eBook, How to Select ERP…and not regret it, I talk about developing business goals to help evaluate what ERP software to buy. If you did that – great! You need to evaluate the goals again, though. Here’s why: All ERP evaluations evolve during their lifecycle. During that evaluation process, the team learns about what ERP can and can’t do. The team may have seen functionality that made out-of-reach business goals seem possible. The business goals also may have been reprioritized. The last reason to reevaluate your goals is your ERP project is about to shift from theory to reality. The ERP implementation strategy and plan will be developed around these business goals, so make sure they are rock solid.
Hire consultants & listen to them
Unless you have someone in your organization who has experience running a successful ERP implementation in a manufacturing industry (this is much, much different than someone involved in an ERP implementation), use consultants. I know, I know—I’m the President of Visual South, a company that does ERP implementation strategy and consulting. Telling you to bring in experts is still great advice. We have seen too many examples of what can go wrong if that advice isn’t followed.
In a nutshell, here is the most valuable thing outside consultants provide: They are experts on your new ERP. When developing procedures to take advantage of the features in the new ERP, it’s a good idea to have someone in the room who understands the system, inside and out. If you don’t have an expert on the new ERP in the room, you’ll develop procedures based on knowledge of the legacy system. It will make sense to everyone, it will feel right – because no one understands the new ERP functionality. Hence, they won't tap into the functionality that would provide the mos benefit to the manufacturing organization.When our team is brought in after a situation where consultants weren't used (or not used enough), we hear a lot of, “I didn’t know you could do THAT!” Of course, they didn’t. This isn't their expertise; it's the consultant's. This expertise comes with training and experience; and that is the consultant's value to your organization.
One last note on the consultants: Listen to them. They have done this before. They don’t know your company like you do, but you don’t know the ERP software like they do. That is what makes you and your consultants a team. From time to time, we work with a leader whose management style is to dictate. This creates a weird environment where a company hires a consultant and pays for their expertise, but the leader doesn’t listen and starts telling the consultant what to do. In cases like this, the implementation doesn’t go smoothly until the leader starts listening or is replaced.
Choose a team
No one knows everything (except our kids), so the ERP implementation project needs a team of people who are current subject matter experts within different areas of the organization. These areas are pretty standard: finance, sales, production, etc. The people on the team are usually responsible for their area in the company, so they have authority. They will typically involve others in their department during the procedure development stage. For example, a CFO may not be familiar with the nuances of entering AP invoices, so the CFO would include someone more familiar with it during the development of the AP invoice entry procedure.
The other thing to consider during the formation of the team is who the subject matter experts for the new ERP system will be. Don’t assume the current subject matter experts will be the new subject matter experts. Chances are, you will transition from having many non-integrated systems and spreadsheets to a single fully-integrated system. That transition changes the landscape. The new ERP system will allow you to do more within the system (things you may have been doing on a spreadsheet before). Being the subject matter expert of a function performed in a spreadsheet doesn’t necessarily mean you can transition into being the same subject matter expert in the new ERP.
At this point, just be aware of the need for those subject matter experts after you go live on the new ERP. No need to choose them now. Usually during the implementation process, the experts begin to emerge. I’ll revisit this topic towards the end of the blog.
Related: Common Structures of an ERP Team
Choose a leader
With rare exception, every organization I’ve worked with has an individual who is capable of leading an ERP implementation project. The person needs to understand the business, have authority, and have organizational and decision-making skills. The problem isn’t finding the right person; it’s freeing up time for the individual to successfully lead the project. Someone with the skills I described is usually already in a leadership role in the organization and probably not working part time.
Don’t make the mistake of keeping the leader’s job responsibilities exactly the same and adding ERP implementation to that list. While it’s the easiest decision to make, it puts the project in jeopardy. Implementing a new ERP system means introducing massive changes to the organization, and this only happens after new procedures are developed. Needless to say, there is a lot going on. The leader must stay on top of the entire process, which takes dedicated time and focus. The risk for failure is real. The risk is minimized well below acceptable levels when leaders have the time to face issues head-on.
A common method companies use to free up the leader’s time is to off-load a major portion of their responsibilities to others in the organization. This shift is temporary until the new ERP is launched and a few weeks past go-live. I know distributing responsibilities is easier said than done, but it’s less painful than working on the implementation, failing, then starting over. It’s also the most cost-effective route.
Develop a strategy and a plan
This is where the expertise of your consultants really comes into play. They know how to do this; they can reduce your risk (if you listen!). Using your business goals and their knowledge, they will develop an ERP implementation strategy and plan.
ERP is an asset that needs to be maintained
Just as nature takes over an abandoned house, procedures tend to degrade over time. The biggest cause of this is employee turnover. The new employees didn’t live the pain of the old systems. They weren’t involved in the training of the new ERP. The result is employees can deviate from the correct procedure. Down the road, new employees deviate even further from the procedures they were trained on. This continues until the company is filled with employees who don’t understand their ERP system.
There are three ways to prevent this procedural degradation from happening:
- Document your procedures. I know…boring! But there is no better way to maintain your procedures than to document them. Infor has a great tool that helps create procedures quickly. If you want to write a procedure for entering a sales order, you just turn on the tool and enter a sales order. The tool produces a video that walks a user through the process. It will also produce a document with screenshots. It’s called Infor User Adoption Platform (UAP).
- Train new employees. This is much easier to do if your procedures are documented.
- Create a team of subject matter experts. Remember in the “Choose a team” section I discussed keeping your eyes open for future subject matter experts. About a month before you go live with your new ERP, identify the subject matter experts. These people are responsible for the health of the ERP system. They need to meet regularly and address any issue that is degrading the system or polluting the data. Companies with one ERP expert don’t do well because there are not a lot of stakeholders. Companies that have a team responsible for the ERP are more likely to keep the system healthy and improve over time.
Other companies have done this, so can yours
Follow my advice and you will dramatically increase your odds for a successful ERP implementation. If you want to talk through this, let me know.