Tim Yoder
Founding Partner, Solution Source
Successful ERP Implementations: What’s the Secret?
For years, the business software industry has been plagued with stories of failed ERP software implementations. No industry vertical is immune, and the stories are often very similar.
Recently, I got a call from a CEO whose company selected an ERP system and contracted with the software manufacturer to do the implementation. This business acquaintance shared that he had not seen a Profit & Loss financial statement for his company since the implementation started. It had been more than 6 months and he was running his business basically on bank statements, with little reassurance from his CFO that it was going to change anytime soon.
These stories are far too common, and the saddest part is that they do not have to happen. The secret to successful software/ERP implementations is not really a secret at all. I founded Solution Source back in 1993. In 2001, we became a NetSuite ERP Value Added Reseller. Over the years, we have completed many implementations, including some that have been difficult. However, Solution Source has never had a failed implementation.
You can read all the project management, process analysis, and system configuration books you want, and they will provide you with important information that should be considered – but they won’t tell you the secret to success. The secret to our success is that we fundamentally care about our client’s business success. We take seriously the fact that we are in a symbiotic relationship with our clients. As their businesses succeed and grow, so do we.
Know What Makes Your Company Unique
The project management books and implementation guides will tell you that you need to have a defined process that takes you through the implementation step by step with specific goals and milestones and deliverables. They will also clearly state that you need to have executive buy-in/support and a team of individuals focused on making the implementation work happen. All of these things are 100% true and it is very important to have these elements in place and deliberately manage the project from start to finish. However, if anyone can read these books and put these elements in practice, why do implementations fail?
There is an old saying in the IT industry that “no one ever got fired for buying IBM”. More recently, I have heard it said that “no one ever got fired for buying Microsoft”. The premise behind these sayings is that if a company purchases equipment and services from the largest players in the industry, everything will be just fine. After all, everyone else is purchasing from them and they didn’t get where they are by selling things that didn’t work. To some degree, this is true – especially when buying commodity products that generally work the same way for everyone, such as servers and laptops or word processors and spreadsheets.
When it comes to business functions like accounting, sales, purchasing, manufacturing, service, inventory, Bill-of-Materials, and costing – it turns out that every company has unique requirements. While 40,000 companies may use the same ERP system, very few of them use it exactly the same way. The larger the software manufacturer, the more resources they can bring to development of a high quality product. However, if their development goal is to build a software product that is highly flexible, with enough features that almost every company can use it and their profit goals are driven by selling as many licenses as possible – how much do they really care about any single implementation?
Taking the time to know and understand what makes your company unique is the most important part of any software implementation.
Your Business Partners Should Know What Makes You Unique
Any company that comes to you with a documented process complete with action items and delivery schedules, but does not include time up front to do the very real work of understanding how you do business from start to finish is not in the business of successful implantations. These companies are in the business of managing projects and they will expect you and your people to do the majority of work and will leave when the timeline says they should whether the project is successful or not.
At Solution Source, the beginning of every single implementation consists of a series of meetings with each functional area of the client’s company. During these meetings, we discuss specific business requirements that are born out of how the company actually works. During these working sessions, we identify what contributes to success under the current environment and what is causing business pain. This knowledge of how the company works leads directly to an implementation Statement of Work that outlines exactly what must be done to consider the implantation a success.
Through meetings like this, you can learn things like:
– Does the company offer custom configuration of products? If the software supported rules around sales order input to eliminate entry errors, it would improve everything from order entry through purchasing and production.
– Does the company have a high occurrence of changes to orders after they have already been placed? If the system could track these change orders with specific detail all the way from the original sales order through to the production work order and to the invoice, not only would this help sales, production, and accounting, but customer service would also have a complete picture of the final product and all its modifications.
Another client might tell you that their business revolves around delivering containers of product to their customers and then picking the containers up later to be refilled and delivered again, but lost containers is a problem that costs them a lot of money. Not only do they need a system to produce and sell their products, but they need the system to track the location of every container that has been delivered and when it returns to their facility.
While many companies share similar best practices in some areas, every company has certain aspects of how they do business that makes them unique, and some of these even contribute to competitive advantages in their industry. A successful ERP/Software implementation must identify these factors in the beginning of the process and build a plan to address them by the end of the process.
The Secret
The secret to successful ERP implementations is not a secret. Pick a vendor that not only has a proven process, but fundamentally takes the time to know and understand how your company works and what makes it unique. Partner with a provider who understands that their success is directly tied to your success and genuinely believes that as both your companies grow together, your employees and even the communities where you do business will benefit.
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