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Successful ERP implementation (or re-implementation)

How to get an ERP implementation right first time or recover from a poor previous ERP implementation

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Implementation e-book summary: A company that realises it has a planning problem will often turn to the advertisements where many software planning systems claim to have the "solution" to their problems. New software and sometimes new hardware seems to provide the answer, the only question appears to be whether the cash can be found for the system. Buying a Steinway does not make you a concert pianist. Buying the equipment, the piano, is just the start, you have to learn how to play it and that takes a lot more time than buying it. Exactly the same applies to buying planning software. Planning software does not make you plan better, at best it is only a tool to help you make decisions, you need the management systems to generate accurate data and then implement the decisions the system has helped you identify. In reality the implementation of the software frequently embarks a company on the most fundamental change in methods and, more importantly, culture that the company has ever known. Changes of culture are always the hardest to implement.


Successful ERP Implementation (or re-implementation) e-book. Table of Contents
:

  1. Introduction
  2. Causes of failure
  3. What's in it for me?
  4. Cost and benefit analysis
  5. Project organisation
    • Steering committee
    • The project team
    • Implementation time scale
  6. Implementation phase I
    • Internal and external education
    • Other phase I work
    • Project team conference room pilot
  7. Implementation phase II
    • Task force objectives and tasks
      • Sales and operations planning task force
      • Master production scheduling task force
      • Performance measures
      • Data quality
      • Bills of material
      • Purchasing
      • Manufacturing
      • Finance
    • Managers conference room pilot
  8. Implementation phase III
  9. Feedback and co-ordination
  10. External consultants
  11. Summary
  12. Software selection guide
  13. Cost and benefit analysis guidelines and example with Excel spreadsheet

Extract from "Successful Implementation (or re-implementation) e-book.

2. Causes of failure
Data accuracy is the most common reason for implementations failing to live up to expectations but there are many other reasons. A lack of understanding of the ERP planning process can give rise to a variety of problems. If the whole planning process is not driven by a common set of numbers, which include the budgets, sales forecast, manufacturing plans and purchasing schedules, there will be problems and conflicts. The process will fail if there are people in the company who do not support the plan either because they were not included in its creation or because they do not understand its importance.

A symptom of a lack of understanding of the planning system is when managers copy information from the planning system onto their own spreadsheets to do tasks that the planning system could do. The problem with spreadsheets is that they are generally owned by just one person. We do recommend spreadsheets for very small companies (less than 50 people typically) but, as the company grows, the necessity to copy information from one system to another is administratively slow and expensive and inevitably leads to mistakes. Because the information on the spreadsheets is not shared by everyone they will also undermine the quality of information on the integrated system which causes a downward spiral in data quality on the ERP system.

Another common symptom of a lack of understanding of the Business Excellence processes is that managers use performance measures derived from the old methods of planning rather than based on the new way of working. For instance sales are judged in relation to the old, out of date, budget rather than to the latest sales forecast used for sales and operations planning and manufacturing are measured on financial or numeric targets rather than schedule adherence and customer service. (This is not to say that achieving the budget is not vitally important just that the budget should be tested in advance against the sales forecast which drive the manufacturing plans through the sales and operations planning process. By the time you reach the end of the month it is just too late to fill any gap that exists efficiently).

Software cannot be excluded from the list of reasons for failure not because the software does not work but because it does not properly reflect the needs of the business. Fitting software to the business is all about understanding both the business needs and the planning tools and techniques that the software offers; it is not about customising the software. Indeed the most common software problems are associated with attempts to customise the software rather than use it in the most effective way as written. The latter may mean some politically difficult operational changes but they have to be made.


You can purchase this e-book by credit card for 4.95 (about US$8 or €7) by clicking the "Buy Purchasing E-Book" image at the top of this page.


This e-book plus 10 more like it can be purchased together in the compendium book "Business Excellence - the integrated solution to manufacturing planning and control" price 24.90, about 45US$ / €37. . . more details