Avoiding The ERP Hangover

“It’s better to look ahead and prepare, than to look back and regret.” – Jackie Joyner-Kersee

Almost nothing churns in a CIO’s memory banks like recalling the ghost of Enterprise Resource Planning (ERP) initiatives past. Millions of dollars and sadly a few careers have been mangled on these behemoth programs in the past few decades. All organizations have to conduct administrative tasks such as processing money (finance) and managing people (human resources). There is little differentiation or innovation opportunity in these mainly back-office functions, but there is a tremendous downside in doing ERP wrong.

Here is a list of “don’ts” when it comes to ERP.

1. Don’t automate the “as is.” Doing the same things faster is not improvement, and not worth spending millions on. Before you even glimpse at the latest ERP analysis from your favorite research firm, get an expert outside assessment on your as-is processes and identify the greatest opportunities for improvements. “Outside” doesn’t have to mean “expensive consultants.” Other options include recently retired or quasi-retired executives with experience in your vertical or who held senior roles at large ERP vendors.
2. Don’t buy technology, buy a better way of doing business. Contemporary ERP systems are not the rigid transactional behemoths of the past. They are flexible workflow systems with powerful data and analytical engines. The top ERPs are designed with best practice administrative processes that can be configured to your organization. Conduct a thorough selection process to see what ERP will best fit the new and improved processes. Organizations are all different, but there is not a lot of differentiation in things like payroll and budget reports. Let the vendor advise you on the best practices for implementation.
3. Don’t underestimate the people impact. ERP changes, and even upgrades to existing systems, can have a ripple (or earthquake) effect on how people work. For employees in back-office functions, it means moving from transactional to service-oriented. For the rest of the organization, it means smaller changes such as different views of financial or personnel reports, a new portal for handling personal information and payroll preferences, and altered ways of handling travel reimbursements. All of these affect employees who may have to conduct tasks differently — tasks that may not be part of their primary job. Organizational change management is critical to consider.
4. Don’t over-feed the ERP. Once you’ve implemented an ERP and it’s working, put it on a stringent diet. It should get the lowest possible investment of people and capital. ERPs should be functional, secure, performant and compliant — full stop.

ERP programs are not exciting. However by avoiding pitfalls and doing the hard work of thinking through process, people and technology choices, you can avoid buyer’s remorse.

“We must all suffer one of two things: the pain of discipline or the pain of regret or disappointment.” – Jim Rohn

This piece was published on the blog page of Joanna Young, a consultant who has previously held CIO roles. Click here to contact her, or follow her on Twitter at @jcycio.