Busting ERP myths

ERP has had a bad rep in the past for being costly, complex and unwieldy. But manufacturers and other companies considering installing or updating their ERP solution need to know that now is the time to do it.

“ERP software and services have improved dramatically in recent years,” says Lyall O'Carroll, Technical Account Manager, Seidor Africa. “It is no longer an enormous expense, nor does it take an age to implement. ERP has also become much easier to use.”

O'Carroll looks at four of the most common myths that persist around ERP implementation and how to bust them:

Myth 1: When ERP projects crash, it’s ugly

Saying that ERP projects crash is a provocative way of saying they have failed. But to understand if something has failed, we need to comprehend what the starting goals of the particular project are. The reasons driving an ERP project may be unique or generic, but typically fall into four areas:

• To develop the brand
• To improve gross profit
• To increase turnover
• To align governance

When evaluating ERP solutions, the leading question should be around growing or protecting these four key areas, the return on investment (ROI) needs to be proven, and should outweigh the investment required.

If the ROI does not have a start and end date, then it is without substance and cannot be proven. This means further investigation is required.

From a service provider’s point of view, an ERP implementation fails when it does not answer the key questions or meet the primary goals agreed to at the onset.

It is also important to note that the advantages of ERP are not limited to streamlining business operations and cutting costs. Even a problematically implemented ERP system can help companies serve their customers better by improving efficiency and control of the business processes.

Myth 2: Millions are lost in failed ERP implementation costs

This is a myth that needs to be contextualised. Anything can go wrong, given enough scope and time, but what is key is the client and service provider relationship. They should be clear and agree on the scope and objectives of the project while maintaining a partnership that fiercely drives the project to that end.

According to Murphy’s Law “If nothing’s wrong, you’ve missed something”. It is naïve to think that any project will run without a hitch and at the same time, there is also no room for failed implementations which is why best-business practices are adopted. Understanding future roadblocks, resolving them as early as possible, maintaining regular open communication whilst respecting the project goals and budget reduces the risk as well as cost and time overruns which directly effecting the project success.

It is almost impossible to find a project that has not had some level of scope creep and most clients are excited about the product, wanting to leverage more.

Business basics dictates that if anything is added to the project, it must support the original objective or be moved to an additional phase of the original project. ROI must be proven in every phase.

Myth 3: In many ERP projects, the client ends up at square one, with an outdated system

It must be stressed that this kind of scenario only takes place when a project is implemented with a goal in mind, but without a plan.

Without a blueprint of how to get from A to B, there is no way to agree on results, budget and ROI. Without a documented, methodical approach, a company can be building the walls without having set a foundation.

One of the major reasons this happens is when senior executives, managers and employees “just want to get started” and aren’t aligned and clear about the project’s aim.

We recommend spending a significant amount of time planning and road mapping, even if the start date needs to be pushed back. Why waste the customer’s budget implementing a shinier version of what they already have?

Myth 4: ERP projects are enormously complex

ERP systems bring operational areas together to overcome the challenges that arise from lack of visibility, collaboration, and coordination. Whilst the projects can be intricate, the attention to detail (which can be seen by some to be complex) helps a customer become a digitally intelligent organisation, able to drive efficiencies throughout business processes. ERP projects are only as complex as the problem that needs to be solved.

In any project, the customer requires three personas to be present. The first is the champion – the person who sees the value of the project and will drive it forward from a customer’s perspective. The second is typically an executive – they will make sure that the project is aligned with the strategic goals of the business. The last is the end user (employee) – they understand the “real world” process and every variation and problem that comes with that.

They are invaluable assets to the project but a word of caution: it takes a lot of skill to balance user acceptance with user exuberance.; if the goals and objectives are clear, things should run smoothly.

The Truth:

Never has there been a better time to deploy an ERP solution than right now. “Solutions today are far more technology-enabled, easier to implement and use,” O'Carroll says.

“Equally important is management support of the project and change management initiatives, and of course, an implementation partner who has the experience and expertise to make it happen.”

“Don’t listen to the misconceptions hovering around ERP systems. The benefits of ERP solutions are extensive. To leverage them, choose an ERP solution partner wisely,” concludes O’Carroll.