We’ve been speaking with the CEO of a mid-market manufacturer in the industrial supply sector about a key question – why team with an independent ERP consulting firm?
It’s been an interesting dialogue because the organization was grappling with a variety of legacy systems, manual workarounds, siloed solutions and several stand-alone spreadsheets to track operations, production and inventory management.
As the CEO has described to us numerous times, their legacy systems resulted in a frustrating waste of time and resources. In addition, about a year and a half ago the company experienced a false start with the implementation of a new ERP system which sputtered to a halt for a variety of reasons. Thus it was understandable that the CEO wanted to head immediately into vendor demos to “kick start” the ERP selection with his team.
We certainly understand the frustrations this company was experiencing. Many times Ultra’s team of independent ERP consultants gets pulled into projects with manufacturers or distributors that had experienced a failed implementation or an implementation that was causing severe disruptions to the business. In some cases, we are brought in for a full business process improvement, selection and to guide recovery from a failed ERP implementation. In other cases, we’ve been bought in to re-implement an ERP solution.
So when thinking about the question “why team with an independent ERP consulting firm,” we’ve assembled some of the concerns and considerations this industrial supplier noted in their decision to partner with Ultra for their project.
First – Some Concerns
Like many organizations, the leadership team of the industrial supplier had concerns when looking to team with an independent consulting firm. Their concerns were primarily in the areas of cost and confidence in their own resources.
Enterprises will sometimes have a very short-sighted perspective on costs; they consider the costs of a third-party consultant as an additional expense rather than thinking in terms of what that expense delivers: an avoidance of risk, business transformation, project business case delivery with on-time and on-budget realities and related project opportunities.
While confidence in in-house resources is admirable, unless those resources have experienced a successful enterprise software implementation in the last couple of years, those staff members did not have the strategic expertise and knowledge of ERP best practices. Implementing new technology is more than just dropping in a software package – it is integrating that technology with the business processes and transforming those business processes to achieve the desired future state.
Top Reasons to Team with an Independent ERP Consulting Firm
In the case of this industrial supplier, the CEO understood that to team with an independent ERP consulting firm shielded them from unnecessary risks, cost overruns and disruptions to the business.
Going it alone without expert guidance, access to research, methodology, and experience would likely lead to a project that did not cover specific requirements, would go over budget and overschedule.
Summarized here are some of the top reasons the company’s leadership decided to team with an independent ERP consulting firm:
1 – Minimize the Risk of Failure. The supplier decided to team with an independent ERP consulting firm to minimize overall project risk. A successful enterprise technology project must be built on a solid understanding of business processes, value targets, decision drivers, the transformation roadmap, roles and responsibilities of the project team and how a new solution will drive the ROI. Due to a variety of ERP risk categories, researchers note that between 55% to 75% of projects fail to meet their basic objectives, so an independent guide who has been through the process hundreds of times is proven to reduce the risk of failure.
2 – A Laser Focus on Process Improvement. In this case, the CEO of the industrial supplier company appreciated that an independent ERP consultant team would apply a laser focus on business process improvement that started with an evaluation not of technology solutions, but of current and desired future state processes.
The CEO understood the approach involves taking an accurate assessment of the current state of the business and then aligning software evaluation criteria to the desired future state of business processes and requirements.
Evaluating the software and implementation services against future state business process models enables a project team to make the best decision that supports long-term needs.
3 – Knowledge of Manufacturing. The business model in place was unique to industrial supply manufacturing. The CEO wanted to team with an independent consulting firm that had worked with businesses in that niche but also wanted consultants who worked in other kinds of business. A distribution background would help with warehousing and logistics. Of course, a specific focus on manufacturing meant the company could be guided with best practices that are proven to work in the industrial sector.
4 – In-depth Knowledge of the Technology Vendors. The industrial supplier was looking to work as effectively as they could during their project and understood the importance of obtaining as much insight about the technology vendors in the market as possible. They decided that to team with an independent ERP consulting firm meant to tap into the latest research about vendors, their products, functionality, implementation strengths, reseller attributes, long-term roadmaps, strengths and weaknesses of their contracts and what the bottom dollar price point is of the software licenses.
5 – Driving Organizational Change Management: Along with industry expertise and vendor knowledge, strategic experience with project and change management was a key reason the industrial supplier decided to team with an independent ERP consulting firm. Applying best practices for ERP change management, Ultra’s team of consultants proactively looks forward into the plan and activities to identify potential risks and mitigate those risks before they become obstacles which disrupt the flow of the project.
Organizational change management focuses on the “people” aspect of the change and ensures that the organization is ready for the new system. It involves communication, training, user readiness, support and fostering understanding of the change. Business transformations through ERP will not take place without effectively managing change across three key organizational areas: people, process, and technology.
Change management planning from the very beginning is essential.
Lessons Learned
All in all, this “story from the field” shares powerful lessons.
The last thing this CEO wanted was to enter a technology project that would result in unmet expectations, budget overruns, missed deadlines, and lost opportunities.
The risk of these failures all pointed to the need for better preparation, a better understanding of business processes, and better change management.
The company found that teaming with Ultra – a leading ERP consulting firm serving manufacturing and distribution companies – delivered the value they expected.
Looking to Team with an Independent ERP Consulting Firm? Look Further
Want to know more about ERP implementation consultants? Read how manufacturers can reduce effort, resources and costs of an ERP selection and implementation project when guided by the right consulting team in Ultra’s white paper, Five Guidelines for Choosing the Right ERP Consultant.
Similarly, read about key strategies for a successful ERP implementation in Best Practices for an Effective ERP Implementation.
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