Iswe Solutions Limited

Success with ERP and How it Happens

The implementation of ERP systems in organisations is an enormously complex undertaking. ERP systems can affect every aspect of the organisational performance and functioning, and measures of the ERP system’s success must reflect this fact. Literature shows that different measures of success are appropriate at different points in the ERP experience cycle, and that the outcomes measured at one point in time are only loosely related to outcomes measured later. The definition and measurement of success are thorny matters. It is clear that people often mean different things when talking about ERP success. For example, people whose job is to implement ERP systems (for example, project managers and implementation consultants) often defined success in terms of completing the project plan on time and within budget. But people whose job was to adopt ERP systems and use them to achieve business results tended to emphasize having a smooth transition to stable operations with the new system, achieving intended business improvements in reporting, and gaining improved decision support capabilities.

Markus and Tanis, provide a description of issues related to the evaluation of ERP success at different stages of the ERP experience cycle.

Major activities of phaseImplications of phase activities for success in phase and laterCommon problemsPhase success measures
Project phase   
Project team formation and training  

Develop enterprise model for configuration; develop and validate kernel in multiple implementations.  

Configure ERP software to reflect either current operations or planned new business processes.  

Design and execute changes (if any are planned) in the organization’s business processes and related organizational elements (organization structure, jobs, compensation, etc.).
 
Implement add-ons, modifications, and interfaces with other enterprise systems and legacy systems.  

Document configuration decisions and rationale.  

Decide how to satisfy decision support/reporting needs.  

Communication and perform change management.  

Clean up data and convert data to new ERP system.  

Test the new system.
The majority of ERP expenditure plans are made during this phase.  

Few benefits are experienced during this phase unless the organization pursues a ‘quick wins’ or ‘low hanging fruit’ strategy of identifying and implementing business process improvements while ERP planning and configuration is underway.  

The longer the project phase, the lower the overall financial benefits from the system on a discounted cash flow basis.  

If the project goes very badly, decision makers may terminate it.  

When the schedule gets tight, team may decide to cut scope, so that strategically essential processes are not supported.
Inability to acquire/retain employees and external advisors with requisite expertise in ERP, project management, and supporting technologies.

Turnover of project sponsor or project managers.  

Excessive turnover (and/or stress-related health problems) on project team.  

Unwillingness of business managers and key users to make time for project activities.   Major changes in project scope after start of project.  

Poor quality software, documentation, training materials.  

Modifications that do not work; delays in development of modifications and interfaces.  

Conflicts with implementation consultants over project plans and management.  

Cutting testing and/or training when schedule gets tight.  

Pressure to terminate project if cost and schedule overruns occur.  
Project cost relative to budget.  

Project completion time relative to schedule.  

Completed system functionality relative to original project scope.
Shakedown phase   
Make the transition to ‘normal operation’ of the new system and the new business processes.  

‘Rework’ (mistake correcting) activities may include: changing configuration settings, upgrading IT infrastructure, revising business practices and procedures, retraining users.
The organization may not be able to realize planned improvements in IT costs and/or business process efficiency until (1) the new system stabilizes, (2) the old systems are interfaced or turned off and older IT resources are removed from maintenance agreements, and (3) users achieve full proficiency with the new system.  

In addition, the organization may have to make significant new expenditures for temporary and overtime labour, consulting help, and additional IT resources to complete the transition from ‘go live’ to ‘normal operations’.  

The longer the Shakedown phase, the lower the overall business benefits on a discounted cash flow basis.  

If Shakedown phase goes very badly, the system may be removed or the organization may become unwilling to undertake future system improvements (e.g., upgrades).  
Extremely poor system performance.   Excessive stress and/or turnover of key users and/or key system support personnel.  

Excessive dependence on ‘key users’ (project team members) and/or IT specialists.  

Maintenance of old procedures or manual workarounds in lieu of learning the relevant system capabilities.  

Data input errors.  

Inability to diagnose and remedy system and/or business process performance problems.  

Short-term deterioration in key (business)  

Extremely negative reactions from customers and suppliers (e.g., large losses of business).  

Absence of sharp and fast improvements during shakedown.  

Absence of satisfactory management information/analysis and reporting.  

Pressure to de-install system.
Short-term deterioration in key (business) performance indicators (KPIs, e.g., process cycle times, inventory levels, operating labour costs).  

Length of time before KPIs and business impacts return to normal.  

Short-term negative impacts on organization’s suppliers and customers (e.g., increased average time on hold, lost calls, lost sales, drop in customer satisfaction levels).
 
Onward and Upward phase   
Ongoing operation and use of system and business process after the Shakedown phase.  

Planning for upgrades and migration to later releases/version of hardware and ERP software.  

Adoption of additional modules/packages and integration with ERP.  

Business decision making based on data provided by the ERP system.   Continuous improvement of users’ IT skills.   Continuous business process improvement to achieve better business results.   Reconfiguration of current release/version.  
The majority of business benefits (if any) are achieved after shakedown.  

Many desired business benefits may not be possible with the current release but may require the organization to undertake a series of upgrades (e.g., reductions in an organization’s IT personnel expenditures may not be realizable during the initial ERP experience cycle; achieving business process ‘visibility’ across sites occurs after all sites have been implemented).

Many benefits cannot occur until: (1) users have learned how to use the system well, (2) managers have used the data collected by the system to make business decisions and to plan improvements in business processes, and (3) additional changes are made in business processes, practices, software configuration, etc.
‘Normal operation’ never materializes.  

Non-improvement in users’ ERP skill levels (e.g., many potential users remain untrained; users routinely rely on project team members and technical support personnel to perform ‘normal’ job activities).   Failure to retain people who understand the implementation and use of ERP systems.  

No documentation of rationale for business rules and configuration decisions.  

Difficulty in optimizing system performance and in reconfiguring the system to support business innovations.  

Unwillingness of organization to adopt additional changes in business processes, system configurations, or IT infrastructure.   Pressure to de-install system.
Achievement of planned business results (e.g., IT operating costs, inventory carrying costs, business process cost and cycle time).  

Use of data and decision analyses produced by the system.  

Ongoing improvements in business results (after planned results have been achieved).  

Ease in developing/ adopting/implementing additional innovations in technology, business practices and managerial decision making.  

Original decision to implement ERP still makes sense in light of subsequent business decisions and events (e.g., mergers and acquisitions).

(Over time) decreases in length of Project Planning and Shakedown phases for subsequent ERP implementations.
Assessing achieved success and problems in the ERP experience

At ISWE Solutions Limited we help you in your ERP implementation by following these key factors that contribute to a successful ERP implementation:

  1. Clear Objectives and Requirements
    • Define Clear Goals: Understand what you want to achieve with ERP. Define specific, measurable, achievable, relevant, and time-bound (SMART) objectives.
    • Gather Requirements: Thoroughly document your business requirements. Involve key stakeholders from different departments to ensure all your needs are considered.
  2. Effective Project Management:
    • Experienced Project Team: We assemble a skilled project team with experience in ERP implementation. This team will include relevant subject matter experts from the client and with a strong understanding understanding of the internal business processes.
    • Project Plan: Develop a detailed project plan outlining tasks, responsibilities, timelines, and milestones. Regularly review and adjust the plan as needed.
  3. Thorough Training and Change Management:
    • Training Programs: We provide comprehensive training to the client. Ensuring that they are proficient in using the new system effectively.
    • Change Management: Address resistance to change through communication, education, and involving end-users in the process.
  4. Data Accuracy and Migration:
    • Data Cleansing: Cleanse and validate existing data before migrating it to the new system to prevent issues related to data accuracy.
    • Data Migration Strategy: Develop a solid data migration strategy to ensure a smooth transition of data from legacy systems to the ERP system.
  5. Customization vs. Standardization:
    • Evaluate Customization Needs: Carefully evaluate whether customization is necessary. ERP systems are often robust enough to meet most needs without heavy customization.
    • Best Practices: Align your business processes with ERP best practices. Customizing too much can lead to higher costs and longer implementation times.
  6. Regular Evaluation and Improvement:
    • Continuous Monitoring: Regularly monitor the system’s performance and address any issues promptly.
    • Feedback Mechanism: Establish a feedback mechanism to gather input from users. Use this feedback to make continuous improvements.
  7. Compliance and Security:
    • Compliance: Ensure the ERP system complies with industry regulations and standards relevant to your business.
    • Security Measures: Implement robust security measures to safeguard sensitive data and protect against cyber threats.

Success with ERP implementation is an ongoing process that requires attention even after the system is in place. By focusing on these key factors and maintaining a proactive approach, we able to help organizations maximize the benefits of their ERP systems and ensure long-term success. At ISWE Solutions Limited with Odoo ERP we aim to ensure ERP success for businesses of various sizes and industries, by offering a flexible, user-friendly, and continuously evolving ERP solution, along with strong community support and a network of partners.

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