So, let’s get this straight…
Your company spent $5 million on a new ERP system that was supposed to help you run your business. Then another $1 million on staff training. You’re nearing the end of Year 4 in the implementation timeline, pushed the delivery date back twice… and you still haven’t gone live with your software?
It’s no wonder enterprise software shoppers are getting fed up with trying to find the perfect ERP system: not only are you likely to hemorrhage time and money, you’re also going to be stuck with it for years and years. After all, why would you want to go through this entire process again in a quest to find something better?
As ERP software providers, we need to do better. And, as users, you need to expect more.
Remember Target? The glorious Canadian business blunder from 2016 resulting in 133 closed stores and 17,000 jobs lost across the country? Yup, that’s the one. Little do people realize that the reasons for their demise can be found in their ERP implementation. In fact, many similarly large companies have paid dearly (and not only in dollars) for implementations that have gone off the rails.
On-site ERP installations are no easy feat. You’d likely need to purchase additional equipment including new servers and computers, and hire external expertise such as implementation experts to set it up and IT consultants to maintain it. And… they almost never meet the expected go-live date due to unaccounted complications along the way.
In 2011, Loblaws experienced similar growing pains: their ERP project was severely mismanaged, and, as a result, was almost two years late in going live. Their trust in their ERP provider waned, and their disappointment in the way the scope was communicated went so far as to even make the news. Hell hath no fury like a national grocery chain scorned.
Expect more: Why spend time and money investing in new equipment and service providers when you can look to the Cloud? Cloud-based solutions allow you to benefit from the full functionality of the software without having to maintain the IT infrastructure. But when considering Cloud solutions, make sure that whoever is hosting your data is doing so securely and holds up to your country’s data protection laws and standards.
It’s not uncommon for implementations to become time-consuming and wrack up enormous bills because of complicated customizations. After all, most companies would actually like their software to work for their specific business needs – not a totally unreasonable request.
In 2001, after two years of ongoing implementation problems, Sobeys decided to part ways with their ERP system. They came to realize that their chosen candidate would never end up being a sustainable solution: due to a lack of core functionality, it would not be able to keep up with the number of transactions that were typical in their retail environment. Sobeys lost almost $50 million on the project.
Expect more: Find a software that can be easily configured under your own control. Think about how you want your products to be described. How different business functions should interact with each other. How it should manage your workflows. Nobody knows your business better than you do.
Converting your data from one system to another can be excruciating. A single product can have many characteristics, and the manual inputting of each one of those data points can go awry. Similarly, all is well and good if you’re operating in dollars, but the American greenback ain’t the same as the Canadian loonie. Don’t forget to account for currency conversions.
Functionality aside, a shiny new ERP software won’t mean much to you if your data isn’t brought over properly. Target learned this the hard way: poor manual data entry (wrong prices were uploaded, widths were logged as heights, etc.), and not accounting for the Canadian currency and metric system were only two factors of a list of many missed steps.
Expect more: Your system should allow you to easily import and export your data. By using Excel templates generated by your system, you should be able to clean up your data and bring it into your software in a snap. No other manual data entry necessary. Also, aim for multi-currency functions: one day, your little local store may be a international player.
Realistically, you should not need to earn a PhD to get trained on how to operate the software that helps manage your company. The implementation of a new ERP software is incredibly strenuous on your staff, and change management in these situations is crucial. The training involved in acclimatising oneself to using a new software on a daily basis can ultimately change the scope of your job.
In late 2010, Lumber Liquidators reported a 45% decrease in net income due to reported reduced staff productivity. The company hadn’t anticipated the difficulty involved in having their entire workforce transition to a new system, coupled horrendously with the poor training following the implementation.
Expect more: Your system should be intuitive and user-friendly. Make sure you have access to a vast library of how-to documentation. Self-starter tools that will help you navigate around the interface before getting started are a bonus.
So. Have we all had enough now? We’re exhausted.
You’re allowed to demand more. You should absolutely hesitate when an ERP provider tells you to completely change your company’s workflows in order to fit the new system. Hesitate again when they tell you that you should pay them to change your business model. Then, when everything goes wrong, hesitate when they tell you that you owe them more money to complete the project.
There is proven value in the art of easy implementations. Your system should live in the Cloud and your data should be hosted in only the safest environments. You should be able to choose how the software fits your business. Your data should be uploaded and found in the right places and, more importantly, be correct. And your employees should feel respected during times of change as they adapt to their altered jobs.