How to rescue your ERP system at low cost and return your business to profit
ERP System Not Working?
Many companies spend a small fortune implementing a new ERP system, only to find that it does not deliver the expected benefits. The reasons for this include, but are not limited to the following:
- Over ambitious expectations with too much new functionality implemented in the first phase
- The business processes are disconnected, do not flow nor deliver the efficiencies (faster) and effectiveness (better value)
- Implementation partner unable to provide consultants who understand your business and incapable of configuring the system to support the business requirements
- Key users unhappy with the new system as it is not the easy system they were promised and they still rely on manual work arounds to support day-to-day processes
What to Keep an Eye Out For?
Half the battle with understanding if your ERP system is not working as expected is to recognise the signals. The signs to look for are often provided by key users in the business and most importantly, from customer feedback on service levels.
The three key signs come from employees, financials and customers:
- Employees showing signs of aggravation and stress due to the system not supporting their roles in key business processes. Key users having to work overtime, or dialling into the system at night, just to keep up with their daily duties. A quick survey of some key users will very quickly identify their pain points.
- Financial impact where the expected cost savings are not materialising and management of costs have not improved. Well configured and implemented ERP systems can identify costing issues that need management focus to correct.
- The level of customer service not improving or possibly even deteriorating. This can be identified by measuring DIFOT (delivered in full on time) levels or through customer feedback and surveys. Losing customers to the competition is a clear indication that there is an issue. A poor ERP system implementation is an easy way to give customers a reason to move to the competition.
There will be other signals that senior management and experienced employees can easily identify.
The Way Forward
Once management have recognised that such a key business initiative is not delivering or has failed, then it is ready to move ahead with a solution. The choices here are to replace the ERP system or to start an ERP Rescue initiative.
An ERP rescue can take the shape of a complete reimplementation of the ERP system, or fix the existing issues and augment the system with other best-of-breed technologies. The latter typically being the most cost effective and least disruptive approach.
Rescuing an ERP system will require:
- Budget allocation, clearly defined and achievable timeframe, and appropriate internal and external human resources
- The formation of a formal project initiative that has CXO attention and focus.
- Allocation of dedicated key users from the business who know the business and have a good grasp of technology
- Use of a formal implementation methodology to drive the initiative
- Identifying best-of-breed technologies that may be necessary to augment the functional capabilities of the ERP system
- Assistance from external specialists with experience in technology implementation projects and business process improvement
Enterprises often struggle to plan and execute the necessary ERP Rescue initiatives, usually due to insufficient resource capacity and experience, and prioritising day to day responsibilities over improving the systems. This is where an experienced consultant or interim project manager can add enormous value. Contact us if you would like to discuss your situation.