In three decades, ERP has grown from systems to connect the factory to finance to a $25 billion global marketplace for products that automate and integrate every aspect of an organization’s business processes. Worldwide, more money is spent on ERP projects than all other IT projects combined. Yet, despite the considerable power and sophistication of many, many ERP systems, and the armies of consultants and specialists available to assist before, during and after deployment, many experts expect that more than half of all ERP projects end up late, over budget or underperforming expectations.

ERP projects

ERP Primer: Success Starts Here (Part 1)

The reasons for such rampant disappointment widely vary. But the simple truth is that ERP is much more difficult than a typical IT undertaking. A company can add a warehouse management system, for example, and only nominally impact any part of the organization but the warehouse. ERP systems, on the other hand, impact every part of a company, and require that all their processes mesh together perfectly. This, of course, is where ERP gets its power to add efficiency, streamline processes and make sure everyone is on the same page and working with the same set of data, “one version of the truth,” as it is called. But to accomplish the massive changes often required to achieve such integration and process standardization, requires an enterprise to approach an ERP deployment with a different mindset than other projects. Herewith are a handful of concepts that, if adhered to, will greatly increase the likelihood that your ERP system will exceed your expectations and transform your company.

ERP is a business project, not an IT project. Sure, ERP is a massive dose of technology. But at its heart, an ERP system deployment is about adding business value. The implementation itself may be tactical in nature, but the reason for doing it in the first place is strictly strategic. In fact, many CEOs admit that they could not have continued to achieve their goals without an ERP system. Keep the strategic priorities in mind at every aspect of the project. Before you even start talking to prospective vendors, for example, senior management needs to map out the reason for undertaking such an investment, define the expected benefits, identify the areas of the business where the greatest opportunities for value creation reside and establish key metrics that make it clear what benefits are expected.

Choose a vendor who has been there before. Some of the very best and highest paid salespeople in the world work for ERP software vendors. That’s not a knock on them, it’s just a reminder that when the dog and pony show starts, throw your skepticism engine into high gear. Their canned demo will showcase all the bells and whistles their software provides and will almost drip with technology over sell. Stop them right there. Put them on the spot. Ask them what they know about your industry. What are the greatest challenges it faces in the years ahead? Which of your closest competitors have they worked with in the past? Remember, this is a business undertaking and you need a vendor who is a real industry insider—not just in the world of ERP, but in your world, too.
Continued in Part 2