Implementing ERP and other large enterprise applications can be a daunting exercise.
It does not really matter if it is cloud or on premise. One large ERP solution, or an integrated system that joins many smaller solutions together. Even organizations who are aware of some of the risks get tripped up. And yet, most organizations recognize that it is worth the risks and choose to implement anyway. So how can we improve the odds?
Here are 7 steps that I believe are essential for setting up your ERP strategy and preparation. Even if you are a smaller organization thinking “we don’t have the luxury to spend months doing all of these things”, you can choose the steps that are right for you. If you only do some, you will be better off than the organization that allows the vendor with the best sales process to drive your success.
1. Align your Enterprise App Strategy with your Business Strategy
Sound obvious? You would be surprised how often organizations jump straight to working with potential solution vendors without putting in the effort to define their point of view first. Define your goals and desired capabilities. Even if it provokes spirited debate among your business leaders, this will be an invaluable exercise.
Take an organization-wide view of your strategy. Even if you are doing this as part of a more limited project, taking the wide angle in to consideration will really pay dividends.
2. Define your KPI’s and Performance Indicators
They say you cannot improve what you do not measure, and so step 2 is about defining how you will measure your goals, processes and capabilities.
While there may only be a handful of true, strategic KPI’s for every organization, most complex organizations might have hundreds of different performance indicators or “PI’s” that need to be managed. Some will be important to measuring a given process, capability, or outcome and need to be actively managed. All PI’s should have a clear lineage to how they contribute to the higher level KPI’s themselves.
How will you evaluate your performance indicators? For example…What dimensions do you need to analyze the PI to give the numbers context? What types of analysis might be needed, and where will they be used? All of this has profound impacts on your future design of data structures and models…how processes will produce data… and what roles and algorithms will likely need this information.
3. Define Your Data Strategy
Incredible insights can be enabled by today’s technology, but it is your data - your ability to intelligently act on generated information- that will truly differentiate you. A solid data strategy often begins by reviewing our strategies, outcomes and PI’s. Who needs certain types of data? Where will it be produced? How will it flow?
4. Optimize your Business Processes and People Strategy
Defining your business processes early is next. Sure, this will be a major ongoing exercise throughout you project that will depend largely on what your ERP solution offers, but you should begin with high level model of what is needed.
Take the time to think about how your organization can really leverage technology and your people to make your processes more productive, efficient, value adding… Where can you use technology to supplement people? How can you reduce mistakes and waste before they happen? What technologies might you be able to deploy to answer some of your greatest ideas?
5. Evaluate Solutions
By following some of the previous steps, you will be a more informed buyer and can start to communicate your needs and desires honestly with potential solution providers.
Here are some leading practices to consider:
- Look at the present, and future needs of your organization. How well does this match up against the planned roadmaps of your potential vendors? How might this change as your industry, or technology in general continue to evolve?
- Usability and User experience are important. If your users don’t like or understand how the solution will work for your business then you are severely handicapped from the outset
- Evaluating the features and functions of a single solution is important, but if your plans involve integrating multiple solutions integrated together, then the combined performance will be even more vital.
6. Define your Implementation Strategy
The amount of different activities and work needed to transition to implementation can be mind-boggling. Let’s take a look at a few key areas I often see leading to problems.
- Aligning stakeholders can be a complex yet subtle activity that needs to take place across many, many different dimensions. For example: Senior folks with junior, project dedicated resources to business unit representatives or executives…employees to partners … You probably cannot do enough to prepare and continually revisit this within and outside of your core team.
- Your organization will change as a result of your ERP implementation. It can be more important than the technical solution itself, and yet is often not formally managed throughout the program. Actively manage change.
- Things will not always go according to plan. Outlining your major risks, and develop contingencies so that you can respond to challenges before the program goes off the rails.
7.Create a roadmap and then revisit and update it continually!
No organization has the resources to execute everything they want in a single program. And yet, too often ERP project success is defined based on the results of a single project. In some of the worst cases, senior management is reluctant to put any more investment in to the “Bad ERP” project because the single project did not magically create a much better version of the solution they had spent the past two decades custom building for the past two decades. rest on their laurels. A roadmap may have been developed earlier in your cycle, but it is worth wrapping up on this because the act of developing, maintaining, refining, or altering your roadmap should continue to take place long after your project has commenced. Business priorities will change. New opportunities will emerge. Technologies will appear, mature, and fade away. Your roadmap should be revised and revisited with regularity.
So, these are our seven key steps to a successful strategy and planning effort for your ERP. Of course, even the best strategies go wrong in execution, but we will leave that for another discussion.
Would you like to learn more? Please take a look at this video:
7 steps to successful enterprise application strategy