Selecting a new system to replace outdated legacy infrastructure is the way that many ERP projects begin. A large number of the ERP software deployments that we work on, at any rate, start life for this reason. However, confining the scope of your project to a simple ‘update and replace’ exercise is short-sighted, and can be damaging to your organisation’s long-term prospects.
In fact, the most successful ERP projects are those that actively prepare an organisation for growth. As ERP consultants, the most valuable service we can provide involves not just specialist technical guidance, but strategic support for businesses looking towards the future.
ERP complexity = growth obstacle
Complex ERP environments are common among large organisations, where they often act as an obstacle to growth. A recent post on the APQC blog explored how ERP complexity is often a major complicating factor in mergers and acquisitions involving large businesses.
“The typical large international organization has an alphabet soup of ERP platforms and software across business units and geographies, which creates major (but often unseen) inefficiencies,” writer Mary Driscoll explained, building on the fact that a 2014 report by APQC found that 76% of companies view their current ERP environment as unacceptable. She added that this kind of unconsolidated, multi-system environment is likely to hinder “data-based decision making, cross-enterprise communication, human capital alignment and operational performance”.
Preparing for growth
Of course, not every business is a sprawling entity with a myriad of ERP software solutions in use at locations around the world. And not every business sets out to grow through mergers and acquisitions. However, the importance of an ERP environment that is set up to support growth that cannot be underestimated, for businesses that want to expand organically as well as through deals.
At CBO, our ERP implementation and improvement processes are designed to integrate with our customers’ growth strategies – because using ERP to achieve business goals is at the heart of everything we do.
Here’s how we do it:
1. Remember that software is easy, people and processes are hard
Most ERP vendors focus on providing a team of product consultants who can mould the software to your processes by asking your users what they want. Typically this results in an implementation that reflects what you have today – not life changing nor growth enabling.
In order to achieve growth you need to do different things. A major factor in enabling growth is optimising your business processes – and then configuring the ERP software to support and streamline those processes. Inevitably, changing processes means changing what people do, to the extent that people’s roles within the organisation will be affected. Change management therefore becomes critical because the improved processes will mean nothing without adherence to the new way of doing things.
2. Process standardisation
Multi-site, multi-company organisations always encounter conflicting ideas on the best way to manage the business from personnel in different sites. We bring teams from across the organisation together to establish the best way of managing your processes and then develop a standard approach. This ‘common model’ eases the rollout of the resulting ERP solution across existing and future sites, allowing for much faster consolidation of future acquisitions.
3. Software is just a tool
I’ve written before about how your ERP software is merely a tool to support your business processes and enable your people. ERP won’t automatically improve your business – your people have to know the processes and understand the output in order to deliver benefit.
We involve your people in designing new processes, meaning that we can gather the tribal knowledge that exists within the organisation and the new processes are owned (and therefore adhered to) by your staff. The more people understand and control change, the less fearful they are. This is a critical factor in successfully managing change.
4. Know the destination
When you set off on any sort of journey, you normally know where you’re going and how you’re going to get there. With a project involving process optimisation and ERP implementation, it is similarly important that you know exactly what you are setting out to achieve. Clear and measurable benefits have to be defined with timescales for their achievement. If you can’t identify and achieve benefits with your business as it is, you can’t expect ERP software to enable growth.