You have embarked on the journey towards selection and implementation of an ERP system and in all likelihood already have an idea of the strategic direction for your company and some thoughts about the desired changes. Outdated, multivendor, interfaced systems will be a thing of the past. With both anticipation and trepidation you begin to plan for this adventure. Where to begin?!
This article proposes a project-management-driven approach to ERP implementations. We qualify that project management as "rigorous." What do we mean?
Let's start with "project."
By definition of the Standards Committee of the Project Management Institute, a project is "a temporary endeavor," "has a definite beginning and a definite end," and "involves doing something which has not been done before." You don't use a project to get everyday or repetitive work done. You put a project in place "to create a unique outcome," i.e., a unique product or service. A clear understanding of where you are and where you are going defines the project. A project causes change.
"ERP system implementation." There have been many ways to describe an ERP implementation. We like the following: "Transforming the operational infrastructure of your organization." Think about it. Changing the way your organization operates on a day-to-day basis. The new way incorporates the interrelationships and interdependencies of the components of the supply chain across your enterprise.
STEPS TO SUCCESS Step 1: Think Big
Most companies will make a change of this magnitude only once every 10 to 20 years. Technological innovations may well allow for shorter cycles of change in the future. Some companies will resist change until forced by competitive pressure. Regardless of motivation, one of the risks in ERP system implementations is to underestimate their complexity. The risk to underestimate the complexity is more common for organizations in reactive mode wanting to implement "yesterday" than it is for organizations that have made the ERP implementation decision proactively. Underestimating the complexity of any project will almost certainly result in time and cost overruns. Underestimating the complexity of an ERP system implementation project can cause substantial overruns and is arguably the costliest strategic mistake you risk to make with an ERP system implementation. Our recommendation: think big. Have vision. Understand exactly where you are going.
Step 2: Begin with the End in Mind
Beginning with the end in mind is one of the few things you can do in life that has no potential downside. This by itself should be motivation enough to do it! Compelling reasons for beginning with the end in mind are described throughout articles about success and in books such as Stephen Covey's Seven Habits of Highly Effective People. Most of you are probably familiar with it. In terms of an ERP system implementation, beginning with the end in mind requires you to envision, imagine, and communicate what your organization will "feel" and "look" like after completion of the project. It is critical to begin your ERP system implementation with the end in mind.
A surprising number of ERP system implementation projects are embarked upon without an end in mind, and a number of other projects only think they are beginning with the end in mind. They think a successful ERP system implementation is the end. It is not. The ERP system implementation is only the beginning. It is the vehicle, the means, or the enabler to the "real" end. (See figure 1.)
The "real" end is what you hope to achieve as a result of successful implementation of ERP. In fact, it is quite possible that an ERP system implementation is but one of several vehicles that your organization is putting in place for the achievement of the desired result. For example, you should complement an ERP system implementation with at least one other vehicle, namely change leadership, either as a separate parallel project or as part of the ERP system implementation project. We will return to change leadership later in this article.
To be effective, the end in mind must be articulated so your organization knows when it is achieved. The more tangible and verifiable, the more powerful it will be. For ERP implementations, the end in mind will most likely reflect return on investment in one way or another. Of course, it will vary by implementation and organization. While there may be guidelines on how to write an end in mind, you have total freedom of choice about where you want your ERP implementation to go. Many of the benefits of ERP and of organizational change are intangible. In fact, intangible benefits may be the main reason for your organization's ERP decision. Whichever may be your case, we recommend that the end in mind be envisioned, imagined, and communicated in tangible, verifiable terms. We recommend including key operational indicators such as inventory turns, cycle times, DSOs, and WSOs, and you might want to consider market share, customer satisfaction, and so on.
Communicating and sharing your end in mind will motivate your organization, and it will help everyone keep their perspective throughout the lifecycle of the project. It will place the business challenge beyond the ERP system implementation project, thereby resizing the latter as a prerequisite stepping stone to the real thing. It will help convey the message that you do not merely hope for success of the ERP implementation project, but that you are resolved and (very important) that you trust your organization. Projects—particularly projects that can actually change the shape of the future—are all about emotions. Beginning with the end in mind is a powerful tool to create a favorable cultural environment right from the start.
To Be Continued
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