ERP Myths and Facts

This post is dedicated to those who know that there are no simple answers in the ERP space, and want to learn more about it. Here are a few Myths and Facts from the world of ERP.

 

MYTH: “Our project is not progressing as planned because it lacks management commitment”

FACT: Progress is often not achieved because of management burn-out. People involved can be disillusioned by promises made and expectations that were built-up by overzealous vendor reps, consultants who collect exorbitant fees as the project lingers and IT personnel who were looking for big budgets and the opportunity to rub shoulders with the “big boys.” When management is made aware of the process, and understands that there are no silver bullets in ERP or quick fixes, then expectations don’t run amok and progress can be measured in a real and meaningful fashion. A successful ERP implementation can provide a qualifiable ROI.

 

MYTH: “Our system went live in just a few months”

FACT: It is more likely that the financial part of the ERP went live in a few months rather than the whole system. Corporate financials are fairly straight forward to implement. Also, in most organizations the financials are already “under control.” An ERP system’s biggest added value is not in the financial area, but rather in other parts of the operation and perhaps in tying those other parts into the financials. Modeling and effectively managing operations in an integrated ERP system may take years to implement. In fact, it is an ongoing process. Ultimately, the system must be flexible enough to accommodate operational changes indefinitely.

MYTH: “Once we finished getting our ERP system up and running, our expenses went down drastically.”

FACT: Outside consulting fees may have been reduced and the initial costs for setting up the system are paid off, but companies often fail to take ongoing internal implementation investment into consideration. In the words of one CIO, “we planned for $600,000 and a 6 months project; we reached both and then stopped counting.” An ERP implementation extends over long periods of time, and any worth its salt will take years, not months.

 

MYTH: “Consultants are professionals who can guide the selection process and manage the project while maintaining an objective stance.”

FACT: We believe that anyone reading this already knows the facts.

 

MYTH: “Comparing ERP functionality lists is a good practice for initial screening of vendors for your project.”

FACT: Functionality lists are of marginal value in the selection of potential ERP systems. A single line in a list may represent a world of functionality in one software packages and very little in another. Even if the desired functionality is fully supported in the software, actually making it work for your specific needs may make implementation complex and cost prohibitive. Referrals in your industry are a much better yardstick. As the implementation team is just as important as the software in terms of successful projects, referrals from industry representatives regarding the implementation team are the second most valuable indicator.

 

By Galit Raviv

 

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