In fact, at a recent industry gathering, we were asked, “If there were just a few “secrets” to a successful ERP selection project, what would they be?”
In response, our team of ERP consultants regularly makes the case that improving productivity and streamlining operations is first and foremost about improving business processes.
First Think Business Process Improvement
While the ERP system can be a key technology enabler, the Business Process Improvement (BPI) phase is critical.
Business Process Improvement focuses on understanding key processes and business requirements, and identifying areas of improvement based on best practices that reduce process waste.
Thus, any questions related to selecting an ERP system must first take into account steps needed to drive Business Process Improvement.
3 Secrets of Selecting an ERP System
That said, we’ve been asked this question enough times to share the following suggestions of common “secrets” to selecting an ERP system.
Secret 1: Gain Executive Buy-In of the Value of the Solution
A key secret of selecting an ERP system is a high level of CEO sponsorship meaning that the CEO has a deep understanding of the business case for the project, along with a sense of the key metrics for ERP success.
When it comes to selecting an ERP system, the importance of executive sponsorship and “buy in” cannot be overstated.
We see a direct correlation between the involvement of a CEO and the overall success of the ERP project – the more involved the CEO, the better the chance of ERP success.
If there is not strong executive management support and sponsorship, the parties left holding the bag – including business process owners, the IT department and functional area managers– feel like they are heading upstream into a long and difficult effort.
Additionally, a CEO who delegates ERP project leadership has a lower rate of success. Certainly, there can be good project outcomes, but success is not as likely.
The CEO allocates the proper level of resources to execute the project effectively, including the capital investment for the tech solution, the allocation of human resources for the project, the time for the project, and the right team for selection and implementation.
Strong executive management support and sponsorship is key to successful transformation
Secret 2: Clearly Define the Future State Processes that the ERP System Will Support
Transforming your business processes, with an ERP system as a technology enabler, requires creating a vision of the future state from the current state – and then on to defining the business value for the project.
Done properly, this foundation will establish alignment of expectations with management, improve the efficiency of the project team, eliminate process waste, and reduce the time to benefit for the project.
With projects beginning to address the low-hanging fruit and understanding the potential offered by modern ERP systems, the team can define the future state by reviewing in detail the current state process maps covering cross-functional processes.
Beyond looking at wasteful practices that currently exist, the team should discuss what processes are currently done outside the formal system or what types of value-adding activities could be brought in-house.
The “secret” comes into play by thoroughly documenting the future state process and communicating the newly designed process to the rest of the organization in formal sessions.
Secret 3: Set Realistic Expectations Supported by a Solid Change Management Strategy.
One of the most important components of change management is thinking about ERP as more than the “end game” or destination. To that end, change management methodologies must be woven into the project. More than just a “secret,” this involves everything from mapping out the Key Performance
Indicators (KPI) for insight into where waste resides, where bottlenecks occur, and where there is a possibility for improvement – to communicating a realistic and thorough time-line for the evaluation, selection and implementation.
Regarding the project timing, be sure to involve a cross-functional team to gain internal consensus and participation from all parties. Engaged commitment is needed from the shop floor, shipping, accounting, and other areas. Be sure the right people on the ERP project team, that timing projections are clearly communicated, and that they are in alignment with executives.
It’s been our experience as an ERP selection consultant team that there will be organizational resistance to an ERP system if there isn’t an emphasis on educating the team about ERP and change management, or if communications about timelines are fuzzy. All parties must have insight into what the new system will mean for their departments, and for the entire organization.
The right approach to the team, the resources, and organizational commitment helps insure that staff can function as “change agents” within the company as opposed to those that block or resist. change.
It’s No Secret!
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Final Thoughts: “Secrets” to Selecting an ERP System?
We’ve covered just a few thoughts that address the question “are there secrets to selecting an ERP System?”
But recall, the focus should always be on true business process transformation.
It’s no secret! Contact Ultra so you can leverage modern technology to streamline operations, improve employee productivity, and improve performance of the business – reflected in improved profit and loss metrics on the company’s balance sheet.