(From an interview with Shoshana Jamieson, Director of Consulting at Illumiti)
It’s no secret that many organizations struggle with ERP. Gartner’s recent whitepaper, entitled “Working Smarter, Not Harder Is the Key to Business Success With ERP” identifies the principal reasons why some organizations are so successful with their implementations, while others continue to experience challenges.
One of the key things to take away from Gartner’s paper is the fact that many companies implement ERP, but don’t really stop to think about why they are doing it. Or they get it to solve one problem, but don’t have a clear strategy on how to use it going forward in other aspects of their business. This has been a common issue for many years, but often for different reasons.
In the mid 1990s, for example, companies looked to ERP as a key solution for their Y2K challenges. Later on, companies sought out ERP implementations as a means of replacing Excel spreadsheets for their business activities, or as a tool to help them consolidate many legacy or disparate systems into one system. In fact, these are both still key drivers today.
But all too often, an ERP implementation is seen within a company as an IT-led project, and that can lead to potential challenges when it comes time for the business to start adopting and using the product. So what we try to do is make sure we coach them that it’s a business-led project, and we ensure that the business and IT are aligned. It’s common for IT to go off on a tangent, thinking they are helping the business, without really understanding what the business wants. So it’s important to make sure the two are talking in a way that both sides understand.
It’s also crucial before any implementation to encourage businesses to baseline where they are today, because only by doing this are they able to set goals on what they are trying to accomplish with the ERP solutions. Remember, these should be business-focused goals — but of course, there will IT benefits as well. These can include anything from replacing legacy systems to having a more efficient landscape, etc. Base-lining and setting clear goals at the start also ensures that companies will be able to measure the value of what they did achieve, once the implementation is complete and the tools have been running for a while.
At Illumiti, we also help companies look at what key performance indicators (KPIs) they are measuring today. Not every company has KPIs, so for these ones, we can suggest what KPIs make sense for their industry. We also encourage them to use SAP’s benchmarking tools — this is a free website where there are various surveys that clients complete, and it allows them to benchmark their result against those of their peers, which are defined by industry, size and revenue.
By completing the surveys and seeing how they fare against their competitors, they can start to see and set goals that are realistic for them. They will be able to see where they are doing well, where they are average and where they are falling behind. And that allows them to decide where to focus when blueprinting their ERP implementation.
Bigger companies may have already been thinking in these terms, but for smaller companies, it’s often the first time they have ever looked at their business in this context. It allows them to really have the numbers to validate their thoughts or can even change the way they are thinking.
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