When The Customer Is Wrong About ERP
While getting ERP right might not be the subject of riveting television, getting it wrong can bring with it drama that even the big guys have not been able to escape. From bad decisions to missed implementations and expensive lawsuits, the plot has it all!
Like the time confectionery giants Hershey’s ERP supply chain application issues prevented it from delivering $100 million worth of Kisses for Halloween that year and caused the stock to dip 8 percent.
How about the story of ‘HP’s centralization of its disparate North American ERP systems onto one SAP system’? Where Murphy’s Law popped in and everything that could go wrong… did. Total project cost? $160 million, (in revenue loss) over five times the original estimate).
Or the time 27,000 college freshmen at the University of Massachusetts in 2004 faced a glitch in the system that left them ‘at best unable to find their classes and at worst unable to collect their financial aid checks’! A problem that took a couple of weeks to fix.
Those are quite different from the ‘rosy picture’ stories of ERP implementation you hear more often than not. The reality is nearly every single implementation has its problems. So to prevent you from making a big mistake or making this harder on yourself than you need to, here are some key points to keep in mind.
- Plan, plan, plan.
Plan for things to go wrong. There really is no away around this. Set up a cross-functional team to anticipate things that could go wrong in your business – how can the software interfere with business as usual? Look into the details and ask many questions. While this may not always prevent a problem, it will significantly reduce the probability of them occurring.
- Be on guard!
Be especially suspicious of low prices. There has to be a reason someone is well cheaper than the competition. We’re not saying you need to pick the most expensive one, making an investment that might be larger than necessary. Just be sure to fully research your options. And have a very specific list of the features you are looking for, with a ‘must have’ list as well as an ‘extras’ list.
- Factor in maintenance.
Software needs maintenance to run optimally. Evaluate maintenance as a factor the time of software selection. Account for it in budgets. Contracts entered into at the time of purchase (through the vendor or alternative resources) are sometimes most economical.
- Consider your need for flexibility.
Often, companies need to be able to make changes to their chosen software. Some ERP solutions allow for this while others are much more inflexible. Having a clear future business plan that gives you an idea of what might be needed from your enterprise software can help hugely in the decision making. As can choosing a solution that allows easy customization if you’re not sure.
Due diligence is vital. Be clear on the benefits and downsides of the software on your shortlist. Get references. If you don’t have the time or resources, considering getting consultants to help to choose one that works for you.
‘Breaking up’ with an ERP solution is neither pretty nor cheap. Try to avoid the situation the big players mentioned up front were in by making sure you do as much ground work as possible ahead of time. Good luck!
