There are few things in IT that hold more promise, but that can also go horribly awry, than ERP systems. For every success story, there is a business that describes myriad problems they’ve encountered using ERP.
Several months ago, we asked our members what concerned them most after rolling out an ERP system. Our survey results showed that the majority of respondents—32 percent of the 151 TechRepublic members who took the survey—were most concerned about end-user adoption.
In a discussion related to our survey, other TechRepublic members shared their experiences with and insights on ERP. Here’s what they had to say.
Why are we doing this?
Kate Foti, an information systems specialist in Grand Rapids, MI, said that because her company’s management was not trained in the expected end result of their ERP implementation, they didn’t clearly convey the benefits that the ERP solution would bring and the work it would require.
Craig Fogg also contends that while many users are trained to use ERP systems, they are never told how ERP is supposed to benefit their business. As a consultant with Mill Wheel Consulting, he encourages clients to have both their line and senior managers trained by the American Production and Inventory Control Society so that they can form a clear picture of ERP’s role in the business.
Strong training is the key
Fogg also agrees with Gartner’s contention that at least 20 percent of the implementation budget for ERP, if not more, should be earmarked for training. (TechRepublic is an independent subsidiary of Gartner.)
Ed Gooding told us how ineffective training can hobble businesses that upgrade to more complex ERP systems. He shared his experience with a company that upgraded to an SAP system.
“Before the SAP implementation at this Fortune 100 company, we used to get our invoices paid in 20 days,” Gooding wrote. “After the SAP implementation, it was taking them 95 to 105 days to pay us. The purchasing and A/P folks just couldn't handle the complexity and inflexibility of the new system over the homegrown ones they had previously used.
Choosing ERP often means overhauling your business
Another member suggested that implementing an ERP system requires a company to “overhaul the way it does business” as well as provide thorough training.
Wju_PMP told us about the multinational company he had recently left after multiple SAP financial systems were installed two years ago. “The company not only refused to redefine how the disparate units operated but it also chose to reject the very premise of the SAP best-in-class business processes and chose instead to force-fit SAP R/3 to match the legacy systems that drove our business. Did I hear someone say ‘disaster’?”
ERP replaced by custom software?
In response to another member’s comments about ERP’s future, Gooding suggested that many organizations will choose custom software instead of ERP systems. Two decades ago, many companies eschewed payroll and accounting packages in favor of customized software or heavily modified packaged software.
“Will that happen again? Can’t say for sure, but this profession does seem to work in cycles,” Gooding wrote.
Executives looking for answers
So if ERP is problematic for businesses, why is there enthusiasm for it? Paul Tiffany, CEO of CA-based Help Team, says that business executives are seeking solutions—like ERP—that will help them deal with IT responsibilities.
“These executives are tired of the pain and are amenable to any pitch that says it will go away,” Tiffany said. “ERP is no less complex than what any business currently runs, but the prospect of someone else shouldering the responsibility for unpredictable systems development costs is a glorious dream.”
Often, an organization runs into greater problems when development priorities are handed to ERP vendors, who don’t share the same business goals as their clients—unlike service providers, who have a greater stake in their clients’ success.
“ERP vendors have little stake in the game, while most outsourcers have a big responsibility for their outsourced systems to thrive and prosper,” he said. “Outsourcers cannot just throw up their hands and walk away.”
Buy in from the beginning
As important as training is in making ERP a success, ensuring stakeholder participation is also critical, according to consultant Laura Landy.
“Those who contribute to the vision and design of the implementation, or who, at the very least, receive clear communications throughout the life cycle of the project about its benefits and status, are much more interested in making it work than those who feel left out of the loop,” she wrote.