DiamondCluster International wrote a true page-turner in "The Road Less Traveled," a white paper on the hazards of implementing an enterprise resource planning (ERP) system.
Face it. When you screw up an ERP implementation, it’s probably going to show up in big, bold numbers on the bottom line. This consulting firm has identified a few areas where the problems frequently originate. I’ll share them with you here, but I also encourage you to get the report and read it. It’s worth the 20 minutes it’ll take you to get through its seven or so pages.
A fundamental problem, according to DiamondCluster, is that companies rely on systems integrators to do the work. Yet staff attrition and price pressures have made their service offerings inadequate to the job.
Now that the economy is expanding in the US, integrators face the same problem most companies face: Your staff is looking for greener pastures. Staff in ERP projects needs to be committed for the long-term because these frequently last longer than a year. When the integrator is forced to bring in new people, they must get up to speed immediately, which leaves little time for deep training. That means many employees don’t get as "fully indoctrinated" with a company’s methodology as they should be. That erodes the quality and rigor demanded in ERP work.
Price pressures come from offshore competitors. Even those integrators that tap the talent of offshore development centers face the same problems everybody else does that are in the offshore game: high staff turnover among the best talent.
The report shares a list of "red flags," that you should watch out for in ERP implementations:
One example: an integrator who claims, "This is not in my contract." As the report says, "Planning has been focused on the functionality and implementation of the ERP package without carefully considering the external repercussions. Improper or incomplete integration of legacy systems is the most common example of this flaw. It is not often adequately planned for, nor is it usually covered in standard contracts…"
The document also offers some "positive steps to take when embarking on an ERP project," which sound a lot like those you need to keep in mind for any major sourcing initiative. For instance, "Sweat the conversion details: Manage any historical data — orders, customer information, product details, for instance — that is being converted into the new system with great care. The data conversion and the related step of integration testing are two of the most critical activities in the entire implementation process…"
You’ll find the white paper here:
http://www.diamondcluster.com/Ideas/Viewpoint/PDF/ERP_DiamondCluster.pdf
No registration necessary — hallelujah!
