When it comes to implementing an Enterprise Resource Planning (ERP) system or Warehouse Management System (WMS), organisations have a lot to consider. Not only is it likely to be the biggest IT project a business has ever undertaken, but it’s a process that requires significant resources throughout the implementation cycle. It also involves navigating a lot of risk.
It is estimated that around half of ERP projects are deemed a failure. An ERP survey from 2011 showed that 61% of ERP projects take longer than expected, in 74% exceed budget and 48% of projects realise half of their expected benefits (Krigsman, 2011). Lots of projects fail to even go live.
But done well, these projects are transformational, and there are many things you can do to avoid major pitfalls and guarantee success. These are our top 10 tips to ensure success on your ERP/WMS project.
Take your time to select the right solution
When you’re looking for a new piece of software, it’s important to do your research. There are online tools from companies like G2 and Gartner that can help give you a quick snapshot of who the major solutions are in your industry.
You should also reach out to your peers and see what they are using, as well as what their challenges are. The best way to get a sense of this is by speaking directly with the users themselves—if possible, try to find positive referees from vendors.
If you’re not able to get positive referees from vendors, that’s a red flag! It means that either the vendor doesn’t have any happy customers, or they don’t know how to sell their product effectively. Either way, it’s probably not going to work out well for you.
You’ll be bored to death by endless software demos and annoying sales people through this process. Make sure the demos are time limited and focussed. Challenge vendors to work through examples of all your most common pain points and specific processes. Put vendors head to head in negotiations to drive down costs and improve commercial terms. Make sure you understand the licensing model in detail and don’t commit to buy more licenses than you absolutely need.
Include different stakeholders in the selection process and have them rate each solution according to the success factors that they themselves identified. This will help ensure that everyone has a clear idea of what they want out of their new software, can make an informed decision and builds buy-in from the start.
Establish organisational buy-in up front
It’s important that you sell a vision of the future to all relevant stakeholders. This includes not only executives but also middle managers and frontline workers who can positively influence their peers and whose job might be affected by the implementation.
Be clear on what your vision is and why it is important to the stakeholders and the success of the broader business.
Engaging with these people will put you in a position where they will be more likely to support you when the time comes for difficult decisions or extra resource. Asking for their opinions on what and how things should be done and prioritised builds trust and shared ownership from the start.
Often, from some quarters, you’ll face resistance, cynicism and a lack of engagement. Don’t ignore this, but equally realise this is a natural and common reaction to change. Listen to the concerns, but providing your have a ground swell of support, spending time now appeasing every concern should not be the priority.
Build a killer project team
The first thing to do when creating your project team is to look across the business. You need subject matter experts that have the authority and influence to take decisions and ownership across all relevant business units.
Next, select those with skills you do not have—people with complementary skills to yours, that share your vision. Look for those that with bright ideas, are comfortable with uncertainty and who embrace positive change.
Ensure you have a project sponsor from senior management who is strongly bought into the change and has ultimate responsibility for the allocation of resources and budget.
You must also ensure that the business understands the importance of the project. The project team will be expected to focus on the project intently so naturally that will mean they will be stretched and may have less time to focus on their regular day-to day role. If the business understands this it can help ringfence the resource so business as usual doesn’t suffer as a result.
The last step is to bring everyone together for an inspirational kick-off meeting where you will cover the project’s objectives and timeline, as well as setting clear expectations. At this stage the team should feel empowered to deliver the project and lead the change effort in their respective areas.
Vanilla Processes FTW
Most ERPs and WMS systems can be customised to support a wide range of potential processes, industries and use cases. This is obviously super useful!
But it’s often tempting to customise the solution without considering whether there might be a simpler, less customised way to achieve the same outcome.
It’s also tempting to take your current processes, for example from a spreadsheet or legacy system, and recreate them in a new system. This is almost always a mistake.
By customising the solution you are increasing cost, complexity and technical debt, and debt needs to be paid off!
Be led by Occam’s razor, and keep the solution vanilla wherever you can. If you must customise or add legacy functionality, consider whether it can be rationalised. For instance, is there a way to tie it into functionality that already exists as standard, thus reducing the overall amount of work required.
Take a user-centred approach
Your end users will ultimately make or break a project. If they see a new system as making their life easier and solving their bugbears, adoption will be simple. Alternatively, if it makes things more difficult they will shout from the rooftops at anyone that will listen!
Make time to sit with users to understand what they do, and how they do it. Explain your vision and ask for feedback on the things that you think will make their jobs easier. Focus on making systems that are simple to use, intuitive and that suit the culture and work environment.
Remember though that users don’t know what they don’t know. Challenge them and show them the way when you have to, or where you face resistance.
Focus on your Master Data
Master data describes the data you store on your products, customers and processes. It’s easily overlooked, but poor controls and consistency in Master Data will come back to bite you.
Moving to a new system is an invaluable opportunity to clean up your customer data, product data and categorisations. Consider what might need to change, where overall structure can be improved and what might be incomplete. Ensure you have a logical and minimal way of describing your data and how it can be categorised.
Build controls and governance processes around your data, ensuring that it is fully specified when created, and managed throughout its lifecycle. Consider implementing exception reports to detect where master data is poor, out of date or incomplete.
Be willing to change your opinion
When you’re trying to find the best way to resolve a project clocker or simplify a tricky process, keep an open mind. You might have a really clear idea of how a problem should be solved. You might think it is the perfect solution. Sometimes, when it comes to communicating this it goes down like a lead balloon with the team. Or perhaps you can’t find a way to implement it without creating friction elsewhere.
At this point, take a step back and try to look at things from a different perspective. Don’t be afraid to ask for counsel from the team and your users. The best ideas always come from others! This also fosters a sense of ownership from the team.
Avoid perfection and embrace acceptable risk
There is no getting away from it; ERP Projects can be massively complex. It’s tempting to look at the project as the opportunity for a clean slate. You might try to fix every single problem in one fowl swoop.
However, Perfectionism can lead to paralysis and missed deadlines. Aiming for perfection in planning, solution design and testing can mean the project is at risk of never going live.
You should absolutely use risk management to make informed decisions about what needs to be prioritised and non-negotiable, but don’t be scared of embracing some uncertainty. You need to make sure the wheels don’t fall off completely, but if you get a slow puncture and need to change a tyre, the journey can still continue.
Inevitably there will be things you overlook before going live anyway. And often the things that keep you up at night before go-live end up being less important that you thought.
Make sure you communicate with your team and stakeholders throughout the project to acknowledge these risks and make sure they are acceptable to all.
Build momentum by delivering early value
Getting the new system live can feel like the end of the project but really it’s the end of the beginning! The days post go live can be extremely hectic and there is likely to be some degree of firefighting. It can be tempting to remain in a reactive mode for too long and not focus on the bigger picture.
It’s essential you refocus on the expected outcomes of the project before the dust settles. Deliver and demonstrate the value of the new system early. Make sure key stakeholders can see the benefits and how they are positively impacting the organisation.
It’s also important to take stock of what remains to be done. Agree clearly what remains to be done that will bring the initial phase of a project to a close. Maintaining momentum and continual improvement at this stage will ensure that the time is engaged, equity in the system is built quickly, and any tail risks that could derail hard won progress are eliminated.
Get the right help
One of the most difficult aspects of any large scale IT implementation is ensuring that you have enough resources to meet the project timeline. If the project team has business-as-usual responsibilities this can be a difficult balance to strike. You need to maintain urgency in the project, but not if this means creating issues elsewhere. This will create resentment and create a poor public perception of the project.
Drafting an external resource to take up the slack can be a great option. They can help keep the project on track in a number of ways, and should pay for themselves. Firstly they can take a wholly impartial view, which is important when navigating internal decision making and politics. They can communicate easily across your organisation and will be more able to help you take the more difficult decisions. They can complete key tasks more quickly and with a higher degree of focus. They use their experience to avoid dead ends, find opportunities and improve project structure. Crucially, they will also help manage your external partners and vendors closely to get value for money for any spend on software or services.
It’s tempting to think you can do it all yourself, but generally engaging some additional external resource at the start of the process is the best idea so you can avoid common pitfalls and supercharge the project from the beginning.
References
Krigsman, M., 2011. ERP survey: New IT failure research and statistics. Zdnet, March, 1, p.2011.