Two decades of experience in one industry is a long time, especially in an area as dynamic as the ERP software industry. Over the years, Panorama has helped many companies succeed in their ERP implementations, watched competitors struggle with the same mistakes time and time again, and helped clean up many messes along the way. Clearly, enterprise software initiatives are not easy, which is why there are both so many ERP failures and so many opportunities to make a positive impact in the industry.
In his book “Outliers,” which is about the variables that make exceptional performers in their respective fields, Malcolm Gladwell suggests that it takes at least 10,000 hours of “practice” to become an expert. Over the last 20 years, I’ve probably accumulated somewhere around three to four times that amount of experience in ERP implementation, selection, project management and benefits realization. When we add the similar experience levels of Panorama’s global team of ERP consultants to the equation, it creates a staggering body of expertise that you simply won’t find anywhere else in the industry.
So what are the lessons of this unparalleled individual and collective experience? Through our extensive research, experience and thought leadership, we have spent quite a bit of time defining these lessons and baking them into our standardized methodology and toolset. While it is difficult to summarize 20 years of experience into a single checklist, below are some of the overarching themes we have encountered over the years:
1. ERP implementations are about business, not technology. We pioneered this concept in our early thought leadership and methodologies and, as evidenced by most of our competitors making the same assertion, it has now become accepted as part of the mainstream. ERP systems change over the years – and they have changed dramatically since I started in the industry in the 1990s – but the business, process and people challenges have remained the same. At the end of the day, SaaS technologies, business intelligence, sweet integration tools and other technical considerations have little to no impact on ERP failures or successes. Instead, it’s the company’s ability to address (or outsource) organizational change management, business process management, project management and planning, and other business considerations that ultimately determine the level of success of an ERP implementation.
2. The devil is in the details of ERP methodologies. It’s one thing to say you have a methodology, but it’s the details (or lack thereof) in those “methodologies” that often kill ERP initiatives. From what we’ve seen in person and in our expert witness work, most ERP consultants claim to have methodologies in place, but very few have them defined and standardized the level of methodological detail necessary for success. While the gun-slinging, heavy-hitting, industry veteran may look good on paper, that individual experience is not nearly as important as the methodologies leveraged by the team. When I look at some of the enormous project failures that we’ve analyzed as ERP expert witnesses, they often involved some of the strongest consultants in the field. The problem was that these consultants lacked detailed, time-tested methodologies to leverage during implementation. And, ultimately, it is their absence that leads to the demise of too many ERP projects.
3. Organizational change management is arguably the #1 ERP critical success factor. It’s tough to identify the single biggest contributor of ERP success or failure, but if we had to make a single declaration, organizational change management is our top choice. You can find the perfect ERP system, design and configure it flawlessly, and test it to your heart’s content – but still have a failure on your hands because your organizational change management was inadequate. Unfortunately, 95-percent or more of ERP consultants focus too much on software configuration and basic system training without mastering the art of organizational change. Our PERFECT Change™ OCM methodology identifies and addresses the most critical components of organizational change management, which goes well-beyond the myopic system-focused approach of most consultants. Learn more about organizational change management in chapter six of my book, An Expert’s Guide to ERP Success (available for free download with registration).
4. Realistic expectations are key. Unrealistic expectations can prove fatal to an ERP initiative. For too many years, ERP consultants, vendors and VARs have oversold and under-delivered, creating expectation gaps that lead to bad decisions. For example, if a $1 billion global manufacturing industry is sold a bill of goods that entails a full implementation across the globe in nine months, we can tell you with 90-percent or more certainty that this project will fail regardless of any other mitigating factors. In these types of situations, CIOs and CFOs end up having to cut short-term costs to meet unrealistic time and budget expectations, which ultimately leads to project failure and increases long-term expenditures.
5. ERP thought leadership makes us better practitioners. We’re considered the world’s leading independent ERP consultants not only because we have hundreds of thousands of hours of collective experience in the field of enterprise solutions, but also because we demonstrate our level of expertise in our thought leadership on a daily basis. When you read our blogs, listen to our podcasts, or attend one of our live or on-demand webinars – and then compare our content to that of our competitors – it is clear that we know what we’re doing. So the two-part question of the day for organizations considering an ERP initiative is: how much does your chosen ERP consulting firm appear to understand ERP systems and do they lead the industry in their knowledge and expertise?
There are many, many more ERP best practices and lessons learned that we will continue sharing with you over the years, but the above five points serve as a good starting point. And given the fact that we are the world’s leading experts on the forefront of our industry, I’m sure these lessons will evolve over time.
Read our client success stories to learn more about Panorama’s experience managing successful ERP implementations in industries as diverse as aerospace & defense, government, manufacturing and consumer services. Also be sure to join me for our Lessons Learned From Failed ERP Implementations webinar on January 24.
Reflections on Two Decades in the ERP Industry,