Over the past few years I have seen a number of relatively small businesses really struggle with their ERP implementations. These businesses go live in a relatively short period of time, but they fail to realise the full potential of the system they have purchased.
The three common obstacles small businesses face are:
- Sticking to old ways of inputting and analysing data which involve “fudging”
- Failing to get proper training and education about the new system
- Failing to review business intelligence regularly
1. Don’t Fudge Data
Systems hung together with spreadsheets, or customised to very specific ways of working, can smooth over underlying process and data issues. Sales get used to changing the numbers that come through from estimating, production know to add a “fudge factor” to the production runs and the purchasing team know to order less raw materials than production suggests.
These small changes to data are good enough as a basis for human decision making but an integrated, automated system demands clean, accurate data as it moves it around from one area to another.
Left unchecked, ERP systems expose data issues, potentially bringing a business to its knees. Data is often cleaned, but rarely challenged. Users need time to understand the implications of data, system settings and processes.
If, after go live, stock levels are increasing, or “on time in full” metrics are down, then the data is a good first place to look. If users haven’t been used to an integrated system a good starting point can be generic ERP training so that everyone understands the consequences of the bill of material overstating a key raw material component by 10%, or the customers’ delivery address being incorrect in the main customer record.
Following education, there is usually no short-cut to basic hard work and diligence over data. This can take time, so data must be accurately prioritised. Assigning work to temporary staff or juniors can be counter-productive. If only the top engineer can make the call on the quantities required to make a product, or the best supplier to for an item, then only the top engineer can challenge and correct the data.
2. Ensure Proper Process is Supported by Extensive Training
In the implementation phase the users are sat beside the ERP consultant, they have a safety net to help them all follow the correct process. The self-paced testing and system practice often gets neglected as time pressures mount. Small businesses don’t have an army of people sat around waiting to implement an ERP system, those people all have day jobs which don’t get any smaller during the project.
These same businesses implement ERP on the tightest of budgets, so precious ERP consultancy days are spent on software configuration rather than extensive hand holding and guided practice sessions. This can mean when ERP goes live and the consultant exits the building, the users lack confidence and the processes start to flounder.
If, after go live, new spreadsheets start to flourish and users spend more time on the phone to the ERP support desk rather than customers, it’s a good indication that user confidence is low and trust in the system is weak.
Time alone won’t improve the situation, users need further training and education, not in a classroom or on test data, but sat working the processes for real. A good option is to bring in a more junior consultant at a lower day rate, someone who has the time to take in the mass of information provided by the ERP consultant and distil it in bite-size pieces to users.
3. Review Information Regularly
Most ERP project plans contain a stream of work relating to reporting. Indeed, many ERP systems include business intelligence and it’s very common for the deployment and extensive use of this tool to be central to the return on investment promised by the ERP system. However, as timescales become squeezed and resources are stretched, reporting can be seen as non-essential to the go live process.
Use this situation as an opportunity to think carefully about what information people actually need to run the business, both at an operational and strategic level. Think about bringing in a reporting specialist to spend time with your business helping design the right reporting set for your business.
Take the time to review the standard reports in your ERP system, but remember modern ERP systems deliver information to users in other ways. Don’t forget about screens and dashboards which can be customised to show the user what they need to see during the process, rather than in a separate report afterwards.
Implementing an ERP system is more than following a prescriptive project plan, it requires a mind-set change to bridge the gap from legacy, disparate system to fully integrated ERP system. Users need time and support to adjust. Businesses shouldn’t give up on their original objectives for ERP, instead they should recognise that the “go live” is just the first step, engage with their ERP vendor and put plans in place to “bridge the gaps.”