Top Roles to Outsource in an ERP Implementation

ERP OutsourcingIt’s no secret that ERP implementations require a dizzying array of skills and competencies in order for them to be successful. Organizations embarking on ERP transformations are hard-pressed to assemble project teams that possess a variety of skills, including a vision for how the business can evolve in the future, deep project management and ERP implementation experience, business process reengineering and organizational change management competencies, and a host of other skill sets that can are difficult for most any organization to develop internally.

Because of the challenges associated with assembling such a rare and broad set of collective skills, many organizations turn to outside companies to augment their internal skills with competencies that they don’t possess. The sad fact remains, however, that much of the expertise required for a successful ERP implementation can be just as difficult to find in ERP consultants as it is to find internally. This is surely reflected in the finding in our 2013 ERP Report that most ERP implementations fail.

Given the difficulty navigating these obstacles, here are a few tips to help determine when it may be most appropriate to outsource your ERP implementation and where you might find the right partners to lead you to ERP success:

1.   Look at the big picture. It can be easy to take a myopic view of ERP implementations, focusing almost exclusively on finding external pinch-hitters with software-specific functional and technical expertise. While these skills are important, they are also somewhat of a dime a dozen. Let’s face it: compared to the people and process aspects of an implementation, configuring and implementing ERP systems are fairly cut and dry propositions. Configuring software may be predictable and relatively easy but the other parts of implementations – such as organizational change management, project management and business process reengineering – are much more difficult. These skill sets are harder to find (but not impossible) so most ERP consulting firms, system integrators and VARs don’t have the competencies in these areas. When looking for outside help, it is critical to find a partner that has a comprehensive 360-degree skill set and methodology to help address all the critical aspects of a successful ERP implementation.

2.   When in doubt, business acumen should trump technical competencies. As mentioned above, functional and technical software skills are important but not nearly all-encompassing to an ERP implementation. We’ve found through our implementation and expert witness experiences that ERP success and failure typically has very little to do with how well these technical aspects were handled during the implementation. Instead, success or failure is much more commonly determined by how the business components of an implementation are handled. More specifically, project management, organizational change management and business process reengineering are three concrete examples of business skills that most ERP consultants lack but are extremely critical to the overall success of the project. While the technical skills may seem more specialized and therefore more important – especially if you’re a CIO or IT Manager – it’s actually the more intangible areas that will determine your project’s success or failure.

3.   You’ll never be able to (or want to) outsource everything. Some companies, on the other hand, take items #1 and #2 to the other extreme and take more of a hands-off outsourcing approach. While you certainly want to rely on outside assistance wherever it makes sense, you won’t be successful if you don’t step up to the plate to provide a minimum level of internal support and skill sets. For example, outside consultants – no matter how talented they may be – can’t make decisions about how to run your business for you. In addition, they can’t tell you if the designed and delivered ERP system does exactly what you want it to do. Only people within your organization can provide those types of inputs. Therefore, it is important to identify and recognize those skills and responsibilities that your internal team should provide versus those that can be outsourced to outside parties.

To take the above tips one step further, it can be helpful to conduct a gap analysis of the skills required for a successful ERP implementation versus the caliber of internal skills and competencies that you possess in-house. The biggest gaps are going to be the ones that you’ll most likely want to outsource to ERP consultants, while you may find that your internal strengths allow you to take on a fair amount of the work internally. Defining these roles and responsibilities should be a key component of your ERP implementation planning process prior to beginning your deployment.

Learn more by registering for our free webinar on October 3, The Path to ERP Implementation Planning.

Written by Eric Kimberling

After 15 years of ERP consulting at large firms including PricewaterhouseCoopers and SchlumbergerSema, Eric realized the need for an independent consulting firm that really understands ERP. He began his career as an ERP organizational change management consultant and eventually broadened his background to include implementation project management and software selection. Eric’s background includes extensive ERP software selection, ERP organizational change and ERP implementation project management experience. Throughout his career, Eric has helped dozens of high-profile and global companies with their ERP selections and implementations, including Kodak, Samsonite, Coors, Duke Energy and Lucent Technologies. In addition to his extensive ERP experience, Eric has also helped clients with business process reengineering, merger and acquisition integration, strategic planning and Six Sigma initiatives. Eric holds an MBA from Daniels College of Business at the University of Denver.

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3 Comments

  1. Hello Eric – I truly enjoy your articles about ERP implementation. However today I have to respectfully disagree with your point#3 above. Any consultant worth their salt SHOULD know what the software product can do and how it will function for their client. The real issue is helping the client to see their future process within the confides of the software they will be implementing. And this requires a team approach between the company and the consultant. I know this to be true because I have spent over 30 years helping small businesses to successfully implement ERP systems. Again thank you for your articles.

  2. Appreciate this great article which brings out some good summary of our focus in ERP implementation.
    For the point #3 I would want to agree with it. If you outsource 100% of your work at least you need to own the result, the risk. So 100% becomes 99%. You have to make some decisions that cannot be outsourced.

  3. Given a situation wherein an internal guy and an outside consultant have equal business and functional skills, I believe the workers are more likely to embrace the ideas of the internal guy since they belong to the same institution and assume the same risks.

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