Thinking About a New ERP? Top 5 Readiness Factors

I’ve learned over many years as a business leader in Finance, IT and Operations Management that there are no IT projects; there are only business projects. Implementing a new ERP system is the ultimate business project, which requires the ultimate readiness. ERP systems touch every aspect of how we do business, from finding customers, configuring orders, managing the supply chain, manufacturing and shipping products, billing customers, collecting cash and posting financials.

Certainly, in today’s robust and fast-moving technology environment, business projects have IT content and dependence on information technology and automation. A key element of a business project’s success is an organization’s ability to exploit technology to transform business processes to achieve business objectives. But business process transformation and capabilities remain at the core of an ERP implementation project.

So, the very first steps to establishing readiness to move forward with a new ERP implementation need to be business-focused and technology-agnostic.

Know What Business Problem(s) You Are Trying to Solve

No ERP implementation can be successful unless the capabilities that the new ERP system will provide are tied to a singularly articulated and commonly referred to business strategy and desired business outcome. In simple terms, know and be able to explain why you want to do the project. Project sponsors need to be able to explain why a new ERP is important to meeting business goals. This must be something that can be communicated simply and repeatedly, easily understood across the organization, and that can capture the hearts and minds and commitment of the entire organization. If this is missing, proceed no further.

Ensure You Have the Sponsorship, Talent and Team to Deliver the Solution.

Once the sale is made on why a new ERP is needed, identify the skills and people needed to implement the solution. Form a project team. The team will need:

• A Project Sponsor. This is someone highly positioned and respected within the organization who can ensure funding and is at a senior enough level to resolve issues that will arise.
• A Project Manager. This is a thought leader who is committed to the vision of what the new ERP is meant to accomplish and who can lead the team toward implementing that vision. This should be a business-oriented leader and should be paired with a strong IT counterpart. These two leaders must partner to lead both the business and technology elements of the project.
• Subject Matter Experts (SMEs) who own and understand current business processes across all functional areas, can envision change and can emerge as functional leaders when the new ERP system is deployed.
• Functional Analysts (FAs) who can bring knowledge of tools and best practices to bear.
• Technical Analysts (TAs) who can deploy selected tools and technologies.

It goes without saying that the most knowledgeable people in your business are the best people to have on your ERP project. But they are also always the most critical to running day-to-day business operations. Understandably, operational teams are often reluctant to give them up even for short periods of time. A realistic resource plan and strategy for how and when to backfill or replace key people in critical operational roles is a necessary preparatory step.

Understand Your Current and Desired Business Processes

When you established your business objectives and concluded that a new ERP platform was needed, you had a rough idea of the capabilities you were seeking. Whether your goals are to improve lead conversion, accelerate the sales cycle, better serve customers, or improve supply chain efficiencies, that rough idea needs to be broken down into specific processes and capabilities. You must analyze in detail the current business processes and capabilities that support your business, identify inefficiencies or gaps in capabilities that need to be addressed to achieve your goals, and know how you expect the new ERP system to address those gaps and inefficiencies. And just as important is the need to understand how the new desired end-state processes and capabilities will affect your people and their roles and responsibilities.

This analysis will result in process flows documenting inputs, transformations, and outputs that provide a “business blueprint” that will guide future work.

Simplify Before You Attempt to Automate

It’s imperative that you simplify your current business processes as much as possible within the constraints of your current systems and tools. This should be a key outcome of your business process analysis, and the resulting changes identified should be addressed before considering ERP technology solutions. Automating unneeded or superfluous steps in a business process is counterproductive and adds cost and complexity during implementation and post-implementation support.

As Peter Drucker said, “Nothing is less productive than to make more efficient what should not be done at all.”

Engage Prospective Consulting and Technology Partners

Only after you have accomplished the above steps will you be ready to begin considering technology solutions and engaging with consulting partners whom you will need to deliver your solution. Know and be able to explain your business objectives. Assemble your team. Understand the details of your business processes and current capabilities and what needs to change. Be able to explain these clearly and with solid documentation. And simplify first before you try to automate.

If you haven’t taken these business-focused readiness steps first, you will waste your ERP technology and consulting partner’s time and your own money.

Need to make sure your organization is prepped and ready for new ERP? Please contact one of our experts at any time!