5 Steps for ERP Success you don´t have to pay for

I created this Blog by reusing material from an internal Blog from Dave Loesch. I made only some minor format changes to his text.

(1): Forget the evaluation consultants

Most of the business processes in ERP have been automated for 40+ years. Who needs a consultant to spend a year on requirements analysis and comparing vendors when all of the products have proven themselves or the vendors wouldn’t be in business? Instead, ask for 5 names of customers in your industry, size and geography who have licensed the vendor’s products and that’ll narrow the list. (If you can’t find any vendors with 5 customers that tells you something.

(2): Are you doing this for the users or the company?

If you’re looking for an enterprise platform to run your business, know up front that your various departments and users have different priorities and drivers so getting everyone to agree is unlikely. Moreover, software experience has provided a consistent answer to “What’s the world’s best user interface?”

(3): Apples-to-apples

How many months would you need to evaluate the pros and cons of a motorcycle versus a bicycle? While they both have similar structures and purposes, it probably wouldn’t take you months to know which one to concentrate on. Then why do customers compare point solutions to ERP? Why spend months and millions figuring out if your users like Manhattan Associates or Maximo more than ERP? Save yourself the hassle! The users will almost always prefer the point system because they’re purpose built. (No need to worry about nosey accountants or slow-moving IT folks!) While inspecting ERP “fit” is reasonable, parading it in front of users next to a point solution is not the way to get users on board with what’s best for the organization.

(4): Ignore red herrings

Apps stores and downloading software via the cellular network is really cool. I mean, Angry Birds is so easy and so much fun! Wouldn’t it be great if I could download a PO app that I really liked? Well, yeah, but there’s little thing called integration and support that many cloud ‘paradigms’ don’t contend with. Sure, mobile is great, but can I really have my mechanics using a phone to access the engineering drawings on a centrifugal pump? Not being a Luddite here, but customers to need to make sure that all the cool stuff they ask for (or the vendor demos) is really practical and will be deployed in their lifetime.

(5): Know they vendor

One of the biggest problems in a mature market is customers start to see the vendors as interchangeable as the products. Buying software from IBM is a world away from buying from Oracle or SAP! (IBM generates about 60% of their revenue from services and we get under 20%. Do you think their strategic focus—or institutional inertia—is oriented toward creating repeatable COTS or maximizing services revenue? Likewise, does ORCL spend more on productization or creating billable moments for consultants?

Summary:

An ERP decision is a long-term commitment. Maybe not a full-blown marriage, but close to raising a kid. After all, the average life of an ERP system is getting longer from 5-7 years to 10+ years. Think about all those Ventyx customers who are wondering if ABB is going to stay in the software business. Aside from having a reputation as a technology laggard, ABB just missed a quarter and replaced their CEO and CTO who pursued the software acquisition strategy. It’s already out that the new CEO is questioning the strategy leading one to wonder when the “core competency” press release gets issued. (“ABB is a controls company…). If you buy your ERP from a private equity firm, a services company or an industrial automation vendor, you need to recognize you’re not in complete alignment. Enterprise applications may be critical to you, but for many of these vendors it’s akin to corporate speculation. They sure aren’t going to upend their business to focus on (or even remain committed to) ERP.

I hope there’s a message or two worth exploring with your customer. (Particularly those considering an evaluation consultant armed with functional matrices!) But, if your customer remains committed to traditional evaluation models, perhaps they’ll consider this advice of a Fortune 500 CIO who once told his ASM:

Why would I do 3-4 day demos of products that are largely interchangeable? (He was looking at SAP, ORCL and MSFT.) Why would I spend thousands of dollars in travel and lost productivity to listen to another customer tell me how they chose to implement the system? That was probably valuable when ERP was new, but I implemented my first ERP system nearly 20 years ago. With tens of thousands of ERP proof points, what I need to do is go to Redmond, Walldorf and Redwood Shores and figure out whose culture and strategic direction best aligns with mine. There’s really little else that matters when you consider the amount of money and time invested in these 10+ year ERP relationships.

Comments:

Excellent Blog and so true incase of most customers who inspite being on ERP for more than 5-6 yrs keep debating whether it is the right fitment and how does it compare to other point systems.

Posted by guest on September 15, 2013 at 06:59 AM CEST #

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