Integration Trumps Functionality for Enterprise ERP

By design, ERPs are created to act as the “source of truth”.  This design becomes a challenge when the customer has multiple ERP solutions.  Each ERP wants to be the master.  Most ERP vendors provide an integration to most popular ERP systems but these integrations are point integrations at best.  “Best of Breed” may be a viable option.  However, many ERP integration cost analyses only focus on a small area and do not calculate the true cost of ownership.  The purpose of this article is to elaborate on the Total Cost of Ownership (TCO) for integrating multiple ERP systems to ensure informed decisions are made by customers.

Clearing up the Myth of Seamless Integration

Seamless integration is more of a marketing label and is not a technically accurate statement that defines Out-Of-The-Box (OOTB) integrations between multiple ERPs.  This is based on my hands-on experience and scars earned from ERP implementations across on-premise and cloud deployment models.  For our discussion, I will focus on the two extremes of ERP integration maturity.  Consider the following illustration.

To create a seamless integration between different ERP solutions with different propriety data models requires each ERP solution to “think” they are the source of truth.  This requires synchronization across setup (i.e. configuration, workflow, security) and transactions (originating in source ERP system and confirmation/completion transactions in target ERP system). 

Deep integration enables the ability to synchronize and transfer data at multiple layers required for an enterprise ERP solution.  Point integration only provides the basics to send and receive business transaction data.   In general, point integration has limited support across the entire enterprise level.  Therefore, additional efforts (manual) are required to keep configuration, workflow and security data synchronized between the multiple ERPs.

ERP configuration is an integration level that is typically understated in terms of importance.  Many point integration designs leave configuration synchronization as a manual task that the customer performs. Consider the following illustration:

Given the cost of developing a deep integration between separate ERP systems, a majority of implementations go with the manual route to keep configurations in sync.  This tactical decision will have an impact to business users moving forward.

Calculating Total Cost of Ownership for Integration between Multiple ERPs

Another area that is typically underestimated is the true cost of integrating multiple ERP systems.  Most estimates focus on only one phase of the TCO for ERP integration:

PhaseDescription
Initial CostEven with ERP vendors providing SOAP/REST wrappers or web services, effort is required for configuration, testing and validation. 
Configuration CostThe majority of OOTB ERP integration does not include Master Data Management (MDM) features required to keep multiple ERP systems in sync.  This requirement is typically addressed manually.  Manual updates involve time in data entry and coordination.  Manual updates provide an opportunity for data error. 
Technical Maintenance CostAssuming a Cloud delivery model, ERP updates are more frequent then traditional on-premise delivery models.  On average, a competent Cloud ERP vendor will provide two updates per year.  In general Cloud ERP vendors will provide an update that has been tested on a “general” configuration and transaction profile.  Thus, a “mature” customer will perform some level of testing with each release.
Functional Maintenance CostThis can be an area with a potential of wild speculation.  Taking a pragmatic approach, I will only consider the additional manual effort required to coordinate key enterprise functionality including: data analysis, workflow administration, security administration, and data integrity.   I understand that there are additional software solutions (i.e. cogs) that you can add to address the gap(s).  However, I consider the additional costs as a missed opportunity to invest in innovation.  Besides, just as with a physical machine, the more technical cogs you add to a solution the greater number of potential failures you create.

Given the above elaboration, consider the following TCO analysis:

Consider what other ERP industry experts have stated:

“Integration costs, which include both year zero installation and continued operational expenses, can be as much as 40x each application’s initial cost.” IDC

“Corporate developers spend approximately 65 percent of their effort building bridges between applications.” Gartner

“Mixed-vendor environments can cost 4x as much as a single-vendor.” IDC

“In a survey of 100 CIOs and IT managers from 84 companies by software vendor intersystem, 67 percent answered “yes” to whether strategic integration project have been held back due to excessive software and services cost.” ComputerWorld

Far too often, ERP business cases only capture the initial cost(s) of multiple ERP integration, which is a disservice to key decision makers.  Yet, I want to be transparent to you the reader in stating that my above analysis is a broad, general estimate at best.   I have attached the cost model I used for this analysis.   Feel free to prove it out for your environment.

Limited ERP Integration Results in Limited ERP Functionality and Added Complexity

Implementation services are by far one of the largest costs of an ERP solution.  As such, customers will inherently look to keep implementation costs as low as possible.  Corners will be cut and scope will be kept to a minimum. The tragedy here is that decisions are made without all the facts and limitations fully elaborated.

Let’s frame our discussion around a frequent ERP deployment scenario.  Let’s say that we have a customer selecting two separate ERP systems for a best-of-breed approach.   We also assume that the customer is not interested in building a deep integration between the ERP systems and will only utilize the OOTB point-integration services.  The customer has a vague understanding that they are required to perform some manual synchronization of configuration setups across both ERPs.  Both ERPs go live and functional business tasks are handled competently by both ERPs.  The constraints reveal themselves when business activities and decisions cross multiple business processes.  In general, these constraints make themselves evident in the following functional categories:

Granted, there are plenty of technical solutions out in the market to address these functionality gaps.  However, consider the IT technology complexity considerations:

Just because there is a technical fix to solve the gap does not validate the need.  Not convinced?  Consider the following customer comments regarding the limitations that ERP integrations can impose:

“We purchased about 3 best-of-breed solutions in the areas of Asset management, Financials and Human Resource management. We have spent over ~N25M, over 12 months to implement, N2M+/yr for support/upgrades per solution, a whooping N35M for integration and it still does not do what we want.

This is the second time we have gone through the integration cycle yet our systems cannot deliver the real-time, asset-driven, consolidated information that narrows the horizon of data into seconds/minutes, not batched hours/days or a week’s worth of data whose latency effectively negates the ability to react with any effectiveness.

The CEO has asked that we look for a single source ERP that is highly flexible and extensible. He is seriously searching for a LONG TERM solution. At this point, he does not care if it is the ‘best’ in a specific area; he wants a robust, single source ERP that can meet all the needs of the company without the headache of integration.” Source:  Infoware.

The bottom-line question you need to ask yourself is “Are the additional complexity and dependencies worth the effort?”    This is a question that should be answered at the enterprise level, not the business functional (siloed) level. 

Recommendations for Customers

Customers should challenge their ERP vendors and System Implementation (SI) partners on their 3rd party integrations.    Following are key points for consideration:

  • Understand exactly what is provided and not provided with OOTB ERP integrations.
  • Quantify the effort required on the customer to address the gaps in OOTB integrations.
  • Reducing technology complexity is the greatest enabler for reducing business costs and maximizing business agility.
  • Warning!  Short-term thinking usually results in siloed thinking, which typically results in business limitations and lack of flexibility.

Challenge to ERP Vendors and SI Partners

I can appreciate that providing additional information and guidance may potentially slow down the ERP selection cycle.  However, I believe that we (including myself) are duty bound to provide complete guidance to ensure a customer makes an informed decision.  Following are key points for consideration:

  • Identify the functional limitations within your solution for a multiple ERP environment.
  • Explicitly define the levels of support for multiple ERPs across all levels (configuration, security, workflow, originating transactions, closing transactions).
  • Explicitly quantify the level of effort for customers to support OOTB point integrations for ERP systems.
  • Quantify the TCO for ERP point integrations versus ERP deep integrations.

Summary

In general, enterprise ERP solutions inherently support deep integration between their modules based on their design on a common data model.  Regarding whether to pursue a multiple ERP versus a single ERP approach, I take a results-oriented approach – whichever strategy adds the greater impact (%) to the Income Statement is the right choice.

On a practical note, when ERP vendors state their solutions integrate with competitor’s ERP products/solutions, it is important to understand to what level of integration is provided OOTB.  Put yourself in the shoes of ERP vendor.  How easy would you make your ERP system integrate with a competitor’s offering?  Due diligence is required on every party (ERP vendor, SI Partner, Customer) to ensure that a complete set of information is provided to make an informed decision.

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Using AI/ML to Build Customer-specific ERP Roadmaps

How much does it cost to create a customer-specific ERP roadmap?  $50k, $200k, $1m+?  This effort typically requires the higher end consultative guidance and advisory role(s).  It also requires a significant amount of customer leaders’ effort/time to support this activity.  What if I can show you an approach where one can automatically generate a custom ERP roadmap? If interested then allow me to elaborate.

Are you a Believer?

Before we start, I will ask you to make an investment.  I have a habit of repeating myself therefore I will ask you to review the following blog postings before I begin:

Now, if you are still interested then I will ask you to stretch a little further.

Model versus Reality

I consider myself more of a pragmatist than a theorist.  Models are great to elaborate upon concept(s) for discussion and argument.  However, conceptual models are limited in the value they provide to customers if there is no method to align reality (i.e., “as is”) with the optimal path.  Consider the following illustration:

Key Points and Observations:

  1. In a majority of cases, there is a difference between potential ERP utilization and actual ERP utilization experienced by customers.
  2. In order to promote repeatability, there should be a logical progression that enables customers to maximize ERP utilization (i.e., roadmap).
  3. To minimize ERP Total Cost of Ownership (TCO) and eliminate cost constraints, ERP cloud vendors should provide customers with the ability to increase ERP utilization without heavy reliance on consulting services ($$).

The goal is to define an ERP utilization approach that is repeatable and reliable.  Far too often, customers spend thousands of dollars on a “point in time” ERP strategy that requires additional funds to revise the strategy as technology changes.  The ERP utilization strategy must start with “where the customer is at” and provide a series of ERP features and prerequisite enablement activities in order to increase utilization.

ERP Utilization Roadmap Model

Based on my experience, I recommend that long-term ERP utilization should be a series of incremental quick-wins (i.e., Business Process Management) and minimal paradigm shifts (i.e., Business Process Re-engineering).  Consider the following illustration:

Key points and observations:

  • Any deployment of ERP features that require a significant organization change is not a quick win.  People do not change overnight.
  • An incremental approach like Business Process Management (BPM) is required when deploying new ERP features at the same CMMI level for a given business process.
  • Set A includes the BPM enablement activities and ERP feature deployments required to align with the logical maturity path.  Note that only incremental change is required to implement targeted ERP features (thus, a quick-win).
  • Set B includes the Business Process Re-engineering (BPR) enablement activities and ERP feature(s) deployment required to align with the logical maturity path.  Set Y is not a quick win.

The practical aspects of this model are (1) the roadmap must start where the customer is at in their business process maturity, (2) utilize an increment (agile) approach to build organization momentum, and (3) realize that organizational momentum will carry a customer through the radical changes required for maximizing ERP utilization.

Automating Implementation Guidance & ERP Roadmap

I will utilize the following illustration to put the previous concepts into view.

There are 3 key automation players in the mix. 

  1. ERP Configuration Manager:  This is a feature of the ERP software that provides an ordered list of data and functional configurations required to implement a feature set within the ERP solution (aka table loading sequence).   A competent ERP vendor should provide this capability out of the box.  Unfortunately, most ERP vendors only provide ERP configuration manager functionality that only provides the “technical” guidance for configuration.
  2. Implementation Advisor:  The implementation advisor compliments the existing ERP configuration manager by providing functional and organizational guidance to the customer during the implementation.  The guidance is harvested utilizing AI/ML recommendations based upon findings and trends identified across the ERP vendor’s customer base.  The implementation advisor would utilize both structured and unstructured learning to provide the most relevant guidance.
  3. Solution Advisor: The solution advisor focuses on providing the iterative and progressive ERP product feature set(s) required to attain the targeted CMMI level for a business process.  The solution advisor must have access to current ERP features implemented but also how effectively business users are utilizing ERP features

The key strategy of the ERP Utilization model and the solution advisor is to provide an incremental, progressive maturity path that is risk adverse and minimizes huge organizational change.

What’s Missing? Challenge to ERP Vendors

As stated earlier, the majority of ERP vendors provide business process models that highlight how ERP vendors define business processes within their software.  The gaps I’ve observed with most ERP business models are there are no relationships defined between the business activity and the corresponding CMMI maturity level and ERP product feature(s).  Adding this metadata to the model will enable an automated approach to implementation and roadmap guidance.

Summary

Implementation costs remain the largest part of an ERP TCO analysis.  The cloud delivery model has greatly reduced the hardware/software/infrastructure costs.  Unfortunately, the ERP market places more focus on vendor capabilities and emerging technologies versus ease of implementation and customer self-sufficiency with ERP services.   No technology adds any business value until its in production.  Second, an automated ERP solution advisor provides real-time guidance to customers versus periodic, manual feedback that generally results in “leap-frog” implementations that have greater risk(s) and cost(s).   Stay safe!

P.S. – Despite my sincere attempt, I did repeat myself.

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ERP Utilization Series: Measuring User Adoption and Engagement

It is generally accepted that user adoption and user engagement are key critical success factors for ERP business value realization.  However, a majority of ERP implementations take a cursory approach where a qualitative method was utilized for measuring user adoption and user engagement.  A qualitative approach focuses on data that is subjective, interpretive and exploratory.  Let’s see how successful this soft approach has been in the past.

According to a 2014 survey from Panorama Consulting Solutions of 192 businesses, 66 percent of respondents reported receiving 50 percent or less measurable benefits from their ERP implementation, and less than 40 percent were satisfied with the rate of user adoption. In the US, a recent study estimates that over half of all Accounting, ERP, and CRM implementations fail to meet their objectives. In Europe, the corresponding statistic is 70%–80 %!  An oldie but goodie is what was learned from the 1999 Hershey’s ERP failure (user adoption).  A recurring theme from the ERP failures listed above is a lack of actively tracking and managing user adoption and user engagement.  Traditional approaches of End User Testing (EUT), Just-In-Time (JIT) training and user surveys are insufficient for a reliable, effective user adoption and engagement process.   In the following sections, we will discuss practical steps that you can take to better quantify user adoption and user engagement.

User Adoption vs. User Engagement

The first step to take in implementing a measured and repeatable approach is to understand the difference between user adoption and user engagement.  User adoption is when users adopt a system that works to fill a specific need.  User engagement measures how effectively a system is utilized.  A user can adopt an ERP solution but yet the user is not making the most of the ERP functionality available.  In my humble opinion, I believe that we in the ERP industry too often try to broadly address these specific areas with qualitative surveys which are translated into quantitative data with some level of bias. 

Don’t get me wrong, using surveys and statistics as a tool to provide some high level of quantification of qualified user feedback.  The problem occurs when user surveys are the ONLY method we use to manage user adoption and user engagement.  Surveys were necessary in what I call the 1st generation of ERP given that the technology and availability of user data was not a primary objective for ERP vendors.  However, now that we are in the 2nd generation of ERP, user data is more available for consumption.  We in the ERP industry have to leverage this new capability in addition to conventional means.

What data should we go after to highlight user adoption and user engagement?  Consider the following illustration as a starting point.

Quantifying ERP User Adoption & User Engagement

Starting with user adoption metrics:

  1. Test cases executed:  Quantify how many end-user test cases are executed by ERP users.  There is no better method for training and fostering user adoption than “hands-on” experience.  Automating testing may not always be the best option for all scenarios.
  2. Number of users:  Quantify how many users are provisioned for the ERP solution.  An increase in ERP users could be an indicator that organizations see the ERP solution as an enabler.  Conversely, a decrease in ERP users may highlight a risk.
  3. Consumed training:  There are three attributes to capture in the area of training: (1) Total # of hours consumed, (2) Total $ spent on training and (3) Average training hours per user.  An “intuitive” user interface is not a substitute for user education and training.
  4. Number of ERP sessions by connection type:  Another perspective of measuring ERP user adoption includes (1) number of user sessions by connection type (online, mobile). Mobility can be a huge enabler for greater data visibility and accelerating approvals.  Capturing this data will provide customers deeper insight regarding how their users consume their ERP service.

Continuing with user engagement metrics:

  1. Number of manual transactions:  “A major overhead in operating ERP systems is entering transactions. Transactions take time, cost money and introduce the possibility of errors.” Making ERP Work, Sam Graham.  If you are interested in process efficiency and ERP business value realization then the customer should take a hard look at these scenarios and have a plan to minimize these activities.
  2. Number of correcting transactions:  Correcting transactions are rework of existing transactions.  If you are a student of Lean Six Sigma like I am, then customers want to do everything they can to minimize rework.    This type of rework may seem insignificant at the individual user level, yet the customer will be surprised when (1) the rework summarized across the organization and (2) the customer quantifies the impact(s) to business process cycle time(s).
  3. Number of exception transactions:  Any competent ERP solution allows some level of exception transactions.  Example: At month end, the user makes an Accounts Payable journal entry in the General Ledger and then the ERP solution automatically accounts for the journal entry in the Accounts Payable sub ledger.  Another example of an exception transaction is when a transaction is rejected (Expense Report).  Exception transactions are a necessary evil.  However, it is important to note that exception transactions generally require (1) additional user effort (costs) and (2) slows down the business process cycle.  Tracking this type of data will provide insight regarding the root cause for cycle time exceptions.
  4. Decision support transactions:  A common value proposition that all ERP vendors are making today is enabling users to have more time to focus on making business decisions by automating tactical business transactions and consolidating data into meaningful information.  Therefore, we should be able to measure this effect by categorizing and capturing this information via the ERP solution. For example, if we observer that the number of manual transactions are decreasing and the number of decision support transactions increasing then we can feel confident that the organization is effective in utilizing the ERP solution. 

Following is an example of an ERP solution user engagement model.

Measuring User Engagement with ERP

Let’s elaborate on a couple of points.  First, user adoption does not equate to effective user engagement.  The majority of ERP solutions provide the customer the ability to perform transactions efficiently (automated) and inefficiently (manual, exception, corrections).  As a customer, part of your responsibility is to identify inefficient use of the ERP solution and create an improvement plan.  From the above profile, we can identify the following:

  • There is an unhealthy volume of manual transactions.  As the volume of manual transactions increase, it is reasonable to conclude that there will be a greater increase in exception and correction transactions (resulting in additional cost/cycle time). 
  • It is possible that the increase in manual transactions is due to a limited configuration of the ERP solution and the user’s knowledge of the ERP’s features.  Configuration issues can be identified by the customer’s support team and the ERP vendor’s support resolutions.

As the customer performs user enablement analysis, it is important to note that a visible pain may be a consequential result of an underlying issue.

Practice Makes Perfect

User efficiency with an ERP service is not a Just-In-Time event but an incremental process.  Given that people are the most important component of a business solution, it is negligent not to involve users thought out the ERP service implementation.  Sorry for the tough love but this is a gap that no one wants to address head-on.  It has been identified as a critical success factor but is typically handled as a “negotiation play” during the sales process.  If a customer is smart, then they can use data like user adoption and user engagement as leverage with the ERP vendor and SI partner

Increasing User Involement
Incremental User Involvement with ERP Implementations

Incremental user involvement during the ERP solution implementation requires greater project management coordination and guidance.  Second only to the ERP vendor, end users directly impact business value realization for a customer. 

Rising to the Challenge of Creating Reliable User Adoption and Enablement

Referring back to my previous article, effectively business value realization will require an investment from the following stakeholders.

Challenge to SI Partners

  • User Adoption and User Engagement should be generally accepted as key project management metrics (On-time, On-budget, In-Scope).
  • SI Partners should deliver and execute a knowledge transfer plan for each ERP implementation.
  • SI Partners have an incremental user involvement during the ERP solution implementation. 

Challenge to Customer Leaders

  • Customer should make an investment of at a least 20% investment in user training and user enablement.  Consider the following guidance:
    • IDC Learning Services Research shows that organizations, on average, spent 15% of their total ERP budgets on training, while indicating that a 17-20% investment yields better results.
    • Gartner Group research shows similar averages and an interesting fact: organizations that spent less than 13% of their total ERP cost on training were three times more likely to see their ERP projects exceed deadlines and run over budget when compared to organizations that spent 17% or more.
    • Aberdeen Group says that ERP is not a “set it and forget it” tool. Implementing a continuous learning strategy will help users complete their tasks successfully pre- and post-launch.

Challenge to ERP Vendor

  • ERP vendors should deliver out of the box user adoption reporting and user engagement reporting as described above to enable customers in actively managing ERP service utilization.
  • ERP vendors should provide support service analyses that are a result of incorrect configuration or lack of training. 

Challenge to Business Users

  • Business users must be open to change and innovation. Sticking to the legacy process and keeping things the way they are at all costs reduces the chance of real optimization with the new ERP solution.
  • Users must broaden their horizon from a functional job focus to business process focus.  This requirement is not just for super users.  Every individual ERP user should have an understanding of how their input impacts the overall business result(s).   

Summary

“Without data, you’re just another person with an opinion.” E. W. Edwards Deming.

For far too long, ERP user adoption and engagement management has been strictly a qualitative exercise given that there has been limited services provided to easily quantify user metrics.  One type of data is objective, to-the-point, and conclusive. The other type of data is subjective, interpretive, and exploratory.  Given how important user adoption and engagement are to ERP solution success, there should be a comprehensive approach including both qualitative and quantitative data for ERP user involvement.

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ERP Utilization Series: Business Value Realization

Implementing a Cloud ERP solution does not guarantee business value, regardless of the Cloud ERP provider (vendor).  There are countless examples of customers that have not experienced the expected business value articulated in the sales cycle.  Why is this? 

  1. Cloud ERP software could not deliver on the business benefits promised.
  2. Customers could not adapt to the delivered public Cloud ERP delivery model.
  3. System Implementation (SI) partner could not implement Cloud ERP correctly or SI partner could not enable the customer to support their Cloud ERP solution.

Naturally, when things go wrong every stakeholder will point the finger at each other.  As each stakeholder has a share in the success of a Cloud ERP implementation, so is there a share of responsibility in the failure of realizing business value from a Cloud ERP implementation. 

A common theme I’ve observed in my ERP implementation experience is the lack of defining business value goals to be managed during the ERP implementation cycle.  The majority of time, business value goals are assumed as a “natural” result from the project.  Many consider business value an area that is managed after the initial implementation.  The inherent flaw in this approach is that the cost to manage business value is greater when the Cloud ERP solution is live.  This statement is a corollary to the rule that fixing bugs in design is 15x less than the cost of fixing bugs in production.

For example, let’s say you want to consolidate individual functions into a shared service model to leverage economies of scale and promote greater process efficiency (business value). However, this transition is not easy given that the implemented enterprise configuration only considered a “point-in-time” structure. Addressing the functional configuration limitation in production requires greater effort/discipline in a public Cloud ERP model versus an on-premise model (no more direct SQL updates in a public Cloud production environment).

I recommend that business value is front and center throughout the implementation and that business value is the ultimate indicator of Cloud ERP implementation success.  Unfortunately, the majority of Cloud ERP implementation methodologies are based on “traditional” approaches of on-time, on-budget and in-scope. 

What is Business Value Realization?

Do you know how many definitions there are for business value realization?  The number is far more than I can count!  I pride myself at being a pragmatist versus a theorist.  Therefore, the definition must support a repeatable and realistic process given the reality of resource constraints.  I am not arrogant enough to say that I have it all figured out, but the following is my working theory as I interact with ERP customers:

Business value realization is the observed evidence that the customer experiences either as a positive or a negative impact on business process execution.  Consider the following points:

  • Business value is in the eye of the customer.  I humbly believe that the vendor and the SI Partner are responsible in assisting the customer to see the business value created. Simple cost reduction does not equate to business value. 
  • From the customer perspective, business value unnoticed is business value unrealized.   Education is a key requirement in business value realization.
  • Without a baseline, how can one quantify the business value realized? As the Cloud ERP market continues to become more competitive, realized business value will become a competitive differentiation for Cloud ERP vendors. 

Now that we have defined the problem, let’s spend some time discussing how to best address business value realization during the implementation.

Business Value Realization Framework during the ERP Implementation

I have done an exhausted search of business value realization frameworks.  The majority of the frameworks do not address the implementation phase of an ERP solution.  I contend that these approaches should be updated given the apparent level of dependencies that business process execution has with technology today’s environment.  I’ve only found one framework that addressed business value realization during the implementation.

This is a great framework from an IT perspective from the academic world.  I would recommend the above framework to any IT leader looking to create more of an advisory service versus being a traditional service provider (IT should move up the value chain).   In general, I agree with the Lean Six Sigma approach to focus first on process efficiency then process effectiveness for most revenue-supporting and compliance processes.   However, for revenue generating processes, it may be best to focus on process effectiveness first to create market share/disruptance before focusing on process efficiency.

Now, allow me to provide a more detailed framework for business value realization during an ERP implementation.

Performance metrics including KPIs are the definitive “evidence” that the ERP implementation added business value.  Therefore, it is very important that you take a baseline or “snapshot” of your business KPIs before and after the ERP implementation to measure the business value.   My recommendation is to capture the baseline business KPIs during the sales cycle.  Hint: Leverage the ERP vendor to assist you in defining the specific business value you will experience with the purchase of their ERP software.

As you progress thru the Cloud ERP implementation, broad vision and objective(s) becomes specific siloed tasks.   It is important that you reassess your project progress to the agreed upon vision and objective(s).  An iterative approach is best to ensure that you have to opportunity to perform course corrections during the implementations versus more costly corrections after the implementation.

Capturing the post KPIs should be done after stabilization.  The duration of the stabilization phase depends on several factors that I addressed in a previous blog.  Once you have captured the performance metrics and KPIs, you should be able to provide an accurate picture of success and improvement gaps. 

Summary

Going live is only the beginning to business value realization.  Second, traditional ERP implementation project metrics (On-time, In-Scope, and On-budget) only have an indirect relationship on business value.  Generating business value is the primary objective of an ERP implementation, not just moving to the cloud or replacing an outdated system.  Business value must be an iterative and recurring theme in your Cloud ERP implementation approach.

Business value must be a continuous focus for all key stakeholders.  Failure to do so will result in a longer period to business value realization.

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Disrupting the ERP Cloud market with Business Value Realization

“In a survey of 1,322 global organizations who had implemented ERP in the previous three years, only 21% of respondents said that they had realized 50% or more of the expected benefits.” (Source: Lumenia). 

Total Cost of Ownership (TCO) and Return On Investment (ROI) are the outdated, traditional indicators of ERP success.   These metrics have been turned on their heads with the new Cloud ERP subscription based model.  Even with cost reduction, the subscription model does not solve the issue of unrealized business value.

It begs the question when will Vendors and the System Implementation (SI) Partners provide a more equitable risk/reward agreement via a business value based pricing model?  In the current Vendor-SI-Customer model, the customer assumes the majority of the business risk(s) & cost(s).    Given that the Cloud ERP market is still open for domination, customers should consider a business value based agreement where all parties share in the rewards and risks associated with a transition to an ERP cloud subscription service.

Paradigm Shift from Vendor SLA Compliance to Business Value Realization

The traditional “On-Time, On-Budget” KPIs have no direct impact on Business Value Realization (BVR).  The KPIs are more of a Vendor-Service Provider metric to demonstrate that the Vendor-SI Partner completed the delivery of services.  This approach assumes that the Vendor-SI Partner knows “exactly” what the customer needs for BVR.  Also consider that the “On-Time, On-Budget” metrics is more aligned with a commodity-based service.  As a customer, do you want a commodity-based implementation approach or a custom customer-based approach for your Cloud ERP transition?

With current subscription and professional services contracts, there are no financial incentives to ensure all stakeholders focus on the true objective of value realization. 

Building a Business Value Based Agreement

The first and most important step in aligning partner(s) focus on BVR is developing a Statement Of Work (SOW), Service Delivery Agreement (SDA) that focuses on attaining business value.  Consider the following example:

Business Value Realization (BVR) is a mutual responsibility between the Customer, the Vendor, and the SI Partner.  This agreement does not infer that the Customer will get the cheapest price for an ERP transition to the Cloud.  In fact, this agreement will cost the Customer more than a “commodity-approach” ERP transition to the Cloud.  “You get what you pay for.”   Contrary to marketing hype, there is nothing inherently “intuitive” about the Cloud model.  The implementation effort is the same to the SI Partner. 

Smart Transition to a Business Value Realization Agreement Model

Every ERP Cloud Vendor and SI Partner will say that their #1 priority is your company’s business success.  Yet, this is not always true “in the heat of the battle”.  Customers also need to step up their investment and capacity for change with this agreement approach. 

I cannot count the number of times where customers did not know what they purchased or they did not purchase every individual product to support their business process(es).   Keep the focus on business results, not product(s) and feature(s). Second, ERP service training must be available and easily accessible across multiple delivery platforms.  Vendors should also make formal training as cheap as possible.  Consider the following quote:

“Untrained (or under trained) users may end up needing three to six times as much support as end-users who have been trained.” ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

ERP Vendors, it is as simple as this.  Either you take a smaller profit hit now by providing free formal training or you will pay in buckets of operational support costs down the road.  In the next illustration, we will discuss key responsibilities and maturity activities for SI Partners.

 

In my humble opinion, SI Partners have two key responsibilities for competent delivery of ERP implementation services: (a) maximize the value of the Cloud ERP service purchased and (b) complete knowledge transfer for Customer enablement.  It is also important that the Customer defines an accurate KPI baseline on existing business activities in order to compare against business results experienced in new Cloud ERP service.  SI Partners should be able to assist and guide Customers in this exercise.

Now, let’s have a practical discussion regarding the customer’s responsibilities:

Customers have to align their expectations to their executive’s decision to move to an ERP Public Cloud service.  There are non-competitive business activities and reporting that should be eliminated.  ERP software changes will accelerate by a factor of 5 in an ERP Public Cloud delivery model.  Either you can make an investment in Organizational Change Management (I recommend Prosci  (ADKAR) or your company can expect to maintain/grow their IT budgets given all the ERP extensions they have to test and maintain with every service update.   

Money Talks – Consider Retentions to Promote Shared Success

The traditional approach of using go-live as the key event for ERP service delivery is not an effective indicator for business value realization.  Is the event a prerequisite? – Absolutely!  In a previous post I discussed how true business value realization is not possible until you are past the stabilization phase.   I would recommend that you create retention of 25% for both professional services fees and vendor subscriptions to promote focus and delivery from every provider until business value is realized. 

Summary

Gartner estimates that companies are achieving only 43% of their technology investments’ full potential value. 

In my humble opinion, an overriding driver for this gap is the traditional approaches Vendors, SI Partners, and Customers are clinging to in driving business value from technology.  ROIs and TCOs are extremely high level estimates based on a huge number of assumptions and constraints that are not fully defined in the sales cycle.  ERP Cloud vendors and SI Partners are more concerned with transaction efficiency and commodity repetitiveness versus unique customer business success.    A Business Value Realization agreement is not easier, or cheaper and will require a greater investment from all three players.    

Don’t expect any ERP Cloud Vendors or SI Partners adopt this approach any time soon given where we are at in the Cloud ERP market cycle:

As the market reaches its apex and competition continues to grow, disruptive agreements based on BVR will become a strategic competitive advantage.  Customer will make a decision on whether they want a Vendor or a Partner.  ERP Cloud Vendors are transactional and replaceable.  ERP Cloud Partners are long-term relationships critical to your success.

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ERP Utilization Series: Minimize Stabilization Phase

Transitioning from an on-premise ERP system to a new cloud ERP service will result in a short-term reduction in ERP user efficiency.  This is less of a theoretical discussion but a practical reality that we need to manage.  There is never enough hands-on training or testing because we live in a reality of resource constraints.   Moving to an ERP cloud service model is a business risk and no ERP cloud service provider will ever eliminate that risk!  The purpose of this blog is to provide recommendations to minimize the business risks associated with your transition to the cloud.

What is Stabilization?

I would like to define stabilization (i.e. “shake out”) with the following illustration:

Stabilization is the period of time required for ERP users to acquire the same level of efficiency in supporting business transactions.   It is more than just having the new cloud ERP service support the existing business transactions but also that the user can process the business transactions with at least the same level of efficiency and reliability.

In general, following are some of the key factors that directly influence the stabilization duration:

  • End User Training.
  • Testing.
  • Support.
  • Infrastructure.

Any competent Systems Implementation (SI) Partner must realize and plan for stabilization activities.  In the next section, we will briefly discuss how to manage this transition period.

How to Minimize the Stabilization Period

I’ve been fortunate to have been involved in over 100+ on-premise ERP customer transitions to an ERP Cloud service.  I have also reviewed twice as many SI Partners’ implementation approaches to opine on their approach.   Based on this hands-on experience, I have summarized the following recommendations:

Recommendation #1: Increase User Involvement

  • Hands-on experience is the best trainer.  A single week for user involvement is simply not enough time to ensure the same level of ERP user efficiency.  Users should be involved in prototyping activities before User Acceptance Testing (UAT). Just In Time training is just plain wrong for cloud ERP.
  • “Although consultants may participate in testing to some extent, employees should drive the majority of testing.  Doing so maximizes knowledge transfer and readies them for real life under the new system.” Why New Systems Fail. Phil Simon.

Recommendation #2: Comprehensive Testing

  • To reduce testing resources and time commitments, some ERP cloud implementations may reduce testing scope to only focus on business activities that will occur in the first week of go-live (bad practice). 
  • I recommend that key business milestones (ex. month-end, quarter-end processing) are part of the implementation testing plan. 

Recommendation #3: High Volume/Frequency (Load) testing

  • Loading testing is the most accurate method to determine if the new cloud ERP model can handle the daily activities required to support the customer’s business.  If the cloud ERP provider is truly invested in the customer’s success, then this service should be a standard offering and not an additional cost. 
  • Test scenario priority should be based upon two factors: (a) frequency and (b) business impact.  This recommendation is based upon the fact that there is typically no appetite to conduct a complete parallel financials test with the current production ERP environment.

Recommendation #4: Accelerate Root Cause Analysis

  • A cloud ERP go-live best practice is to have a dedicated help desk to support.  The main purpose of the help desk is to perform a high level assessment of the root cause of the user issue (3 broad categories):
    • Cloud ERP service-related.
    • Customer infrastructure-related.
    • Training/Education-related.
  • One of the unforeseen challenges with an ERP cloud service is that there are more complexities (dependencies) with identifying root cause. 
  • The first step to issue resolution is to identify the primary area that is causing the problem.  Without this initial assessment, additional cycles will be spent to identify the root cause.  Following are key tools and resources that cloud ERP projects must have available for rapid root cause analysis:
    • Copy of Production environment: A copy of the production ERP Cloud environment to replicate and perform additional analysis on issues.   This copy environment should be updated from the customer’s production environment at least on a quarterly basis.
    • Diagnostic and Logging Tools: Customers should have access and hands-on experience with the vendor’s ERP Cloud diagnostic and logging tools.  Granted that the majority of the ERP Cloud diagnostic and logging tools are executed by the ERP Cloud service provider, there is a subset of client-level tools that is also required for root cause analysis.
    • Customer Specific Extensions & Configurations: In order to keep ERP Cloud services cost low, Cloud ERP providers will employ a shared support model where support resources are allocated to multiple customers.   The conclusion here is that customers may have to work with ERP Cloud provider support personnel that only have a cursory understanding of their unique configurations and extensions.  Therefore, it is in the best interest of customers to develop a high-level customer profile that highlights the key configurations, transactions, and extensions deployed by the customer. 

Do not assume that every cloud ERP providers’ support personnel have this detailed level of understanding.  Without this summary information, support personnel will ask additional questions which will increase the issue resolution time.  A best practice is to provide this profile information every time a critical support ticket is created with the ERP service provider. 

Recommendation #5: Continue to engage the SI Partner until the end of the stabilization period

  • Having access to a competent SI Partner is strategic for customer enablement during the go-live event and transition period.  Consulting resources can be available to augment the customer’s help desk resources, address user training gaps, assist with issue resolution and complete knowledge transfer.
  • “Maintain the project team for at least 1 month after the go-live date.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

Recommendation #6: Dedicated Go-Live ERP service provide support

  • Cloud ERP service providers should provide an additional level of support during the go-live event thru the stabilization period. 
  • Cloud ERP service providers should provide a dedicated support team versus utilizing a shared pool of support resources during this critical transition.
  • Customers should validate what “24 x 7” support means.  Do not assume that same cloud ERP support resources will continually work on your product issue(s).  “24 x 7” support may also require that the customer’s users have to be available “24 x 7” to collaborate with cloud ERP support. 

Recommendation #7: Go live during Business Down Time

  • By timing cutover during slow business periods, a company can use slack time to iron out systems kinks. It also gives employees more time to learn the new business processes and systems.

Recommendation #8: Over Estimate Production Sizing

  • Capacity planning is an estimate.  How dynamic is the sizing of the customer’s production environment?  Is this real-time or batch? (i.e. if the customer has to create a service request for resizing then the resizing service is not real-time).  If batch then the best practice is to oversize at least 125% of recommended sizing.  This will ensure that you have extra capacity to spare to complete your first accounting close.

Warning Signs for Prolonged Stabilization

The stabilization phase has a huge impact on user experience throughout the entire cloud ERP service lifecycle.   It is self-evident that we have one chance to make a first impression.  While it is possible to recover from a bad experience, it will take double the effort to recover.  Given this potential impact, I will provide some “rules of thumb” that customers can leverage to highlight concerns during stabilization.

The above flags may be categorized as tactical challenges or “shake down” issues after the go-live event but do not underestimate the impact to the user experience.  Please remember that users will have the greatest impact on cloud ERP utilization.  If the above are not addressed in an aggressive manner, then the following utilization path will become more probable:

The longer the stabilization phase the less trust is created between the ERP cloud service provider and the customer.  As trust declines so will ERP cloud service adoption and utilization decline. 

Summary

I’m a firm believer that the cloud model can bring out the best of ERP.   However, there is no guarantee that the above will happen.  It requires a cloud ERP service provider and SI Partner that proactively address the challenges as part of the transition process.  Stabilization is a key phase as part of this cloud journey.

In my humble opinion, the stabilization phase not only is a technical assessment of the ERP cloud service availability and reliability; it must also include an assessment of the usability of the ERP cloud service to efficiently process business transitions. 

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Using AI/ML to create a Customer-specific ERP Business Process Maturity Model

In this post, I will define a case study where my utilization model is applied for a customer.    A key point to be made here is that the health and effectiveness of the business process is directly related to the performance and utilization of ERP features that support the business process.

Case Study – Procurement Business Process

For our discussion, we will focus on the procurement business process.  Following is a generic definition of the procurement business process.

To continue this illustration,  I will define the key business activities associated with the procurement functions highlighted.  I will also define how business activities are likely executed based upon the business process Capability Maturity Model Integrated (CMMI) level.

Legend:

  • Manual:  The business activity is performed manually.  We can assume that since the process is manual that the organizational capacity (resources) is lower for adopting mature business activities.
  • Partially Automated:  The business activity is partially automated.  Manual effort is still required to complete the business activity.  Integration is performed manually.
  • Automated: The business activity is completely automated.  However, the inputs and/or outputs for the business activity are point integrations at best.  Example of this scenario is when a customer utilizes an isolated point solution for a specific activity.
  • Integrated:  The business activity is automated with limited integration.  Integrations are limited to the immediate input and output business activities.
  • Closed Loop:  The business activity is both automated and integrated across the entire business process.  The customer has visibility to data and metrics across all business activities.

Disclaimer: Now, you may not completely agree with all the information presented in the above illustration, but please do not let that derail you from our discussion. 

A key premise of the above model is that mature business activities will provide very limited to no business value until the underlying business process maturity levels are implemented.  There are two key factors that directly influence business process maturity levels: technology and people.  Practically speaking, we can agree that reaching a CMMI Level 4 or Level 5 requires an integrated and closed loop technical infrastructure that supports the entire business process.

To complete the model we need to answer the following question: “How does this relate to ERP product features?”  There are two aspects to consider.  First, what appropriate ERP feature(s) support the business activity.  Second, to what level of functionality should the feature be deployed.   For example, a standard feature in the accounts  payable function is matching.  Matching is an audit performed for goods and services through the entire process.

Continuing the discussion, if I am working with a customer with a procurement CMMI Level 1 then my focus (scope) will be on implementing either 2-way or possibly 3-way matching in accounts payable.  For many of my seasoned colleagues in ERP consulting, this conclusion would appear self-evident.  However, to an emerging customer or a new millennial in ERP consulting or sales, this automated guidance would be insightful.

Application in the Real World

Let’s say I am a customer performing research of ERP vendors for a procurement solution. Today, I have two options:

  1. I can gather information via the ERP vendors’ websites. Generally speaking, there are at least 4 ERP products (purchasing, inventory, account payables, and supplier management) that support the procurement business process. For argument stake, let’s assume that each ERP product has 20 features and most ERP vendors provide a feature list for each of their product offerings.  If my math is right, that means that I would have to wade through 80 features to determine if the ERP product(s) are a possible fit.
  2. I contact a sales representative or presales assistant to gather information. Next is a series of business need assessment questions I have to answer before I can get the information I need.  Most likely, I would also have to involve business users in the ERP vendor’s information harvesting to get any value from the activity.

I would prefer a self-service option that would ask me two key questions:

To expand on this scenario, I provide the following information to the above questions:

  • Procurement CMMI Level: 2
  • Organizational Capacity for Change (OCC): Low

We can leverage the above information to quickly refine our ERP product focus to the area highlighted

The power in this approach is to quickly focus on the business activities and corresponding ERP product features that can mature the customer’s procurement business process.  Instead of asking a battery of questions that add little value, we can focus on the “low hanging fruit” that can generate quick wins for the customer.  However, keep in mind that the customer responded that they have a low OCC.  This indicates that we should implement ERP product features that aligns to the customer’s current business activities/maturity.  Technology alone does not mature a business process.  Keep it simple!  Keep it fast!

Value Proposition

Customers are looking for a specific, cost-effective ERP adoption roadmap that will enable them to mature their business model in a rational manner.  Today, this guidance is created by outside consultants costing thousands of dollars and time commitments from business executives.  Using the above model gives us a solid foundation that we can enhance versus rebuilding the wheel for every customer.  Automating this model and improving guidance via machine learning enables ERP vendors and consultants to accelerate guidance delivery to customers.

Summary

Even with the cloud, ERP implementation services and guidance are still the largest costs that make up Total Cost of Ownership (TCO) for customers.  As the cloud delivery model continues to squeeze TCO, ERP vendors and consultants have to find most cost effective methods to deliver specific value and guidance to customers.  Machine Learning, CMMI Business Models and ERP Utilization Models can be key enablers to automate business solution guidance.

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Using AI/ML to predict ERP Utilization

There are not many methods on how to maximize ERP utilization. There are approaches that do a commendable effort in identifying some of the factors that influence ERP utilization.  What is lacking are predictability, repeatability and harmony across the key components of a business solution.  In my 25 years of ERP consulting experience, I have never encountered a single customer that utilized over 60% of the ERP software.  Given the lack of utilization and the money needed for cloud ERP implementations, I am convinced this is a problem that finally must be solved!   We are in the second generation of ERP software and the only advancement that we in the ERP implementation arena have made is to retract our initial recommendation of customizing ERP for greater customer value.

The purpose of this article is to provide an overview of my theory on predicting ERP utilization.  The scope of this article will focus on the cloud ERP deployment model.  I have yet to complete the rigors of the scientific method to verify my theory.  However, I would like to share my concepts with you and partner with you in growing the collective knowledge.

ERP Utilization requires all components of a business solution

ERP Business Solution

First we need to revisit the concept of a business solution, the key components, their relationship, and influence on ERP utilization.

Just as technology has a part to play in ERP implementation success, business process maturity and the organization’s ability to change have a greater impact on ERP utilization.  To elaborate on this thesis I will make use of two models:

  1. Capability Maturity Model Integrated (CMMI).
  2. Organization Capacity for Change (OCC).

CMMI Level Characteristics

I find that Organizational Change Management (OCM) is more of a project-based effort to enable an organization to meet a specific event.  This approach works very well with an on-premise ERP solution where upgrades are measured in years.  However, in the more dynamic Cloud ERP solution model, change is more rapid.  ERP cloud updates and upgrades happen in months, not years.  What I really like about OCC is the greater focus of providing the organization with the skills and flexibility to handle known and unknown changes. 

OCC is an emerging model, thus there is limited content regarding how to assess and measure OCC for an organization. There for 4 key attributes for defining OCC levels (Saylor Academy, 2012):

  1. Organizational Trust
    • It refers to how much front-line workers trust middle managers and senior executives to watch out for their interests.
  2. Lateral Leadership
    • Focuses on getting things done across organizational units and functional areas of expertise. Fisher and Sharp (2004).
  3. Systemic Knowledge
    • Systemic knowledge is the degree to which members of an organization understand and are focused on the overall organizational system.
  4. Cultural Ambidexterity
    • Change-capable organizations balance accountability with innovation. If the organization overemphasizes accountability, innovation suffers. And if innovation is the sole focus, accountability is ignored.

Given the above definitions, I have created a level definition to support my ERP utilization prediction model.

ERP Utilization Model

With all that said, consider the following conceptual model:

Model for ERP Utilization

I propose a multivariate linear regression relationship between business process maturity, organizational capacity model for change with potential ERP utilization. This simplified model is based on the following assumptions:

  1. A set of ERP features require a certain level of organizational and business process maturity for a successful experience.  For additional information, see my article on Business Leads and Technology Supports.
  2. Based upon the CMMI level and OCC for the customer, we can infer the ERP features required for maximum ERP effectiveness.
  3. OCC has a direct influence on effective ERP utilization.
  4. Software changes will happen more rapidly in an ERP Cloud delivery model versus a tradition ERP On-Premise model.  Therefore, OCC must become an ongoing competency (versus a one-time effort) for long-term ERP success.
  5. “It is generally not fruitful to impose a very sophisticated process on an organization whose maturity is low.  The maturity of an organization not only depends on the skill sets of the individuals, but also on the chemistry of the team.” (Alexia Leon, 2012)

Based on the above model, I conclude that customer enablement must be an ongoing exercise that runs in parallel or even precedes ERP automation.

Model versus Reality

I consider myself more of a pragmatist than a theorist.  Models are great to elaborate upon concept(s) for discussion and argument.  However, conceptual models are limited in the value they provide to customers if there is no method to align reality (i.e., “as is”) with the optimal path.  Consider the following illustration:

Key Points and Observations:

  1. In a majority of cases, there is a difference between potential ERP utilization and actual ERP utilization experienced by customers.
  2. In order to promote repeatability, there should be a logical progression that enables customers to maximize ERP utilization (i.e., roadmap).
  3. To minimize ERP Total Cost of Ownership (TCO) and eliminate cost constraints, ERP Cloud vendors should provide customers with the ability to increase ERP utilization without heavily relying on consulting services.

As we continue with the model elaboration, we find that there are regions that are not practical for a given CMMI and OCC values.  Consider the following:

Key Points and Observations:

  • Circles represent a subset of possible values given that the scenario occurrence is highly improbable. For example, an organization with a CMMI level 1 maturity cannot expect to utilize 100% of the features available for a Cloud ERP service.
  • The permutations of CMMI and OCC levels indicate a linear relationship for targeted ERP utilization.

What Role can Machine Learning Play?

If we can define a logical model with reliable predictive results, then we can begin the journey of providing free consultative guidance to ERP customers and prospects. Let’s start simple with a prediction formula and a structured learning test set.

Following are the assumptions that I used for building the formula and training set:

  1. Business process maturity (CMMI) and organizational maturity (OCC) have a linear relationship with potential ERP utilization.
  2. Certain permutations of CMMI and OCC does not reflect reality (ex. Business process cannot be at a high level of maturity and a low level of organizational maturity).
  3. The minimal boundary of ERP utilization is 20% and the maximum boundary is 80%.

Next, I performed individual regression analysis for each variable separate and together in order to determine if the predicting equation should use one or both variables.

Based upon the above analysis, it appears that the prediction formula utilizing both business process maturity and organizational maturity best aligns with the training set. Next step is to calculate the coefficients for both variables.

In an act of transparancy, I am sharing my data model. Feel free to review and provide feedback/correction.

So what is the application or value add this model can provide?

Summary

Even with a cloud delivery model, the implementation costs associated with ERP have not dramatically decreased.  The ratio of ERP software cost to ERP implementation cost has increased from 3:1 to 6:1.  It is only a matter of time before the ERP market forces ERP vendors to drastically reduce implementation costs while maintaining a sufficient level of customer enablement.  Given the rise and general adoption for cloud ERP services, ERP utilization is becoming more strategic competitive advantage for cloud ERP vendors.  What I see as an emerging demand from the ERP market is a reliable, repeatable method for maximizing ERP utilization.  I hope that my efforts move the discussion forward.

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300+ Quotes for ERP Implementations

Not sure if I’m wiser but as part of my knowledge sharing efforts, I would like to share 200+ quotes from over 50 books/resources that have influenced/guided my ERP journey.  Nothing beats “hands-on” experience but trust you may find some value.  These quotes are grouped into the following areas:

Brett's Hobby
My Little Hobby
Slide1

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Requirements Management

undefined“For any organization there are just a few key processes that handle the core business.  All the other processes support the key processes on a certain aspect.” ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

“To maximize a revenue-supporting process is illogical as it will take effort away from revenue-generating business processes.” Bill Curtis.

undefined“Rules always cost the business something.  This cost must be balanced against business risks.” Principles of the Business Rule Approach, Ronald Ross.

undefined“Reduce complexity through standardization.” Lean Six Sigma for Service, Michael L. George.

undefined“Organizations with broken systems typically suffer from broken business processes and vice versa.” Why New Systems Fail, Phil Simon.

undefined“The cost of control obviously should not exceed the cost of inaccuracies.” ERP: Making It Happen, Thomas Wallace & Michael Kremzar.

undefined“Testing is the only way to ensure that you have satisfied all of the requirements for accurate data.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

undefined“Making the effort to understand your customer’s expectations can save a lot of friction and extra work.” Rapid Development, Steve McConnell.

undefined“A key aspect of enriching mental models is bringing assumptions to light.  People’s assumptions are their blind spots.” Developing Knowledge-Based Client Relationships, Ross Dawson.

undefined“Not all process-integration problems are technical and not all about IT.  Integrating computer systems is not the same as integrating the business.” Business Process Management – the Third wave, Howard Smith and Peter Fingar.

undefined“Adaptive approaches are good when your requirements are uncertain or volatile.” Agile Project Management, Agile Software Development.

undefined“A common mistake is to design and configure the system for only the first site and worry about the others later.” Control Your ERP Destiny, Steven Scott Phillips.

undefined“The cost of complexity isn’t offset by what you can charge.  Complexity creates opportunities for you to fail your customer.” Gerand Arpey – President of American Airlines.

undefined“Customers tend to interpret requirements broadly, and developers tend to interpret them narrowly.”, Rapid Development, Steve McConnell.

undefined“The proposed process designs should always be designed within the logic of the ERP systems.” Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

undefined“The ability to trace requirements flow from their source (originator), through the various project phases (design, prototyping, customizations, testing, piloting, and delivery) is a requirements generation best practice.” Directing the ERP Implementation, Michael Pelphrey.

“If you do not define the lowest level of detail required for reporting, you will not be able to design the transaction input to achieve that result.” ERP Implementation Best Practices Success And Cautionary Tales, Valerie Campbell CPA CGMA.

undefined“When managers of a company select an ERP package to implement, they are “buying into” the ERP vendor’s view of a certain industry’s best practices and relying on the system to support their efforts to embrace these practices.” Modern ERP.  Marianne Bradford.

undefined“Paralysis through analysis” is a futile attempt to develop the perfect solution.  Control Your ERP Destiny. Steven Scott Phillips.

“Iterations systematically reduce the trade space, grow the knowledge of the solution, and increase stakeholder buy-in.  At the same time, each iteration, or spiral, is planned to mitigate specific risks in the project.”  Evolutionary Process for Integrating COTS-Based Systems (EPIC), Carnegie Mellon – Software Engineering Institute.

undefined“Requirements creep must first be differentiated from requirements evolution (elaboration).” Agile Project Management. Jim Highsmith.

“If you’re using a waterfall model, forgetting something can be a costly mistake.  You don’t find out until you get down to a system testing that one of the requirements was missing or wrong.” Rapid Development, Steve McConnell.

undefined“The advantage of the incremental approach is that the company can get feedback on the implementation and how it is received and possibly fin tune the implementation strategy.” ERP Demystified, Alexis Leon.

undefined“There is no direct relationship between a company size and the complexity of its (ERP) software requirements.”, Control Your ERP Destiny. Steven Scott Phillips.

undefined“One of the advantages, but also criticisms, of ERP systems is that they impose a standardized way of conducting business processes.” , Modern ERP: Select, Implement, and Use Today’s Advanced Business Systems, Marianne Bradford.

undefined“By focusing more on issues and problems and less on requirements, a smart consultant can identify design opportunities in ERP to reduce organizational waste.”, Selected Articles on Enterprise Resources Planning (ERP) – Vol 1, VK Ramaswamy.

undefined“From a financial perspective, for every $1 not spent on requirements analysis: $10 is spent on extra implementation cost and delayed ROI, $100 is spent in business disruption costs on going live, $1k is spent in hidden costs of not meeting expectations over the life of the software.”, Rethinking Enterprise Software Selections, Chris Doig.

undefined“Some consultants contend that users are the only legitimate source of requirements, but this is simply not true.”,Chris Doig.  Rethinking Enterprise Software Selections.

Results-Oriented

 undefined“How you gather, manage, and use information will determine whether you win or lose.” Bill Gates.

“Improvements in the use of the ERP system are an outcome of improvements in the process.”  ERP – The Implementation Cycle, Stephen Harwood.

undefined“Be open to new ways to accomplish the same goal.” The Executive Guide to Implementing Accounting Software, Ken E. Sebahar.

undefined“Competitive advantage comes not from systems, but from doing something better than competitors. “ Mission Critical – Realizing the Promise of Enterprise Systems, Thomas Davenport.

“Whilst technology is a great enabler, it is not a panacea in itself.” ERP – The Implementation Cycle, Stephen Harwood.

undefined“Often the problem lies not with the ERP concept. But in the demand for quick fixes and rapid cures to underlying structural problems.” e-Business Roadmap for Success, Dr. Ravi Kalakota & Marcia Robinson.

undefined“Using an ERP system simply to run things in the same way as before implementation is a guarantee of disappointment.” Enterprise Resource Planning (ERP) The Great Gamble, Ray Atkinson.

undefined“The goal should not be to fail fast but to learn fast.” R “Ray” Wang: An interview by Bob Morris, Ray Wang.

undefined“ERP is first an attitude; second, a process, and only third, a set of tools.” ERP Demystified, Alexis Leon.

undefined“An information system only has value when people use it correctly.” ERP – The Implementation Cycle,, Stephen Harwood.

undefined“A company may employ the most sophisticated software in the world, but unless information is managed, timely, accurate, and complete, the system serves little purpose.” ERP Lessons Learned – Structured Process, Wayne L. Staley.

undefined“Benchmarking has its limits.” The Reengineering Handbook, Raymond L. Manganelli, Mark M. Klein.

“One dollar of prevention spent on fail proofing strategies can be worth several thousand dollars of expensive fixes and rehabilitation.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“The success of the Go Live day is measured by the lack of problems.” ERP – The Implementation Cycle, Stephen Harwood.

undefined“One guiding tenet is every present: any change we administer should add more value, cost less, or deliver services more rapidly.” Transitioning the Enterprise to the Cloud, Ed Mahon, CIO at Kent State University.

undefined“Optimizing individual function areas generally does not result in optimization of the whole process because, within departments, only individual activities are goal oriented.”  Business Process Oriented Implementation of Standard Software , Mathias Kirchmer.

undefined“Utilize a “test first” approach.  Test scripts are written in advance of any configuration or development.” Secrets to a Successful COTS Implementation, Nick Berg.

“The first comprehensive picture of whether the accounting numbers balance and make sense will arise during the month end process.” ERP – The Implementation Cycle, Stephen Harwood.

“Users only care about their experiences.” Transitioning the Enterprise to the Cloud, Ed Mahon, CIO at Kent State University.

undefined“Collectively employees do understand the processes, but individually, they do not.” Control Your ERP Destiny, Steven Scott Phillips.

Applying knowledge is the final step that makes the knowledge valuable. Developing Knowledge-Based Client Relationships, Ross Dawson.

“End results modeling and pilot room testing with the company can eliminate surprises and uncover almost all “invisible” ghosts in the closet”. ERP Readiness Checklist, Gerry Poe.

undefined“In the absence of knowledge and ability you can expect lower utilization throughout the organization, incorrect usage of new processes and tools, a negative impact on customers and sustained reduction productivity.”  ADKAR – A Model for Change in Business, Government and Our Community.  Jeffrey M. Hiatt

undefined“Content without the context of business process is meaningless.” Dennis Howlett.

undefined“Reliability is results driven.  Repeatability is input driven.” Agile Project Management, Jim Highsmith.

Process thinking is a discipline. Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

“If you don’t know what it is you’re automating, no system will help””. Successful Packaged Software Implementation, Christine B. Tayntor.

“Decreasing variability early in the process has larger impact than decreasing variability late in the process.” Lean Software Development. Mary Poppendieck & Tom Poppendieck.

“The rule is efficiency never trumps effectiveness”. ERP Lessons Learned – Structured Process, Wayne L. Staley.

undefined“Good design can’t fix broken business models.” Jeffrey Veen.

undefined“All of the work that goes into development is not adding value until the software is in the hands of the customer.”  Lean Software Development, Mary Poppendieck & Tom Poppendieck.

“The way to reduce the impact of defects is to find them as soon as they occur.” Lean Software Development.  Mary Poppendieck & Tom Poppendieck.

“Optimizing a business function is futile and non-value-added if it is not part of a revenue/competitive business process.” Maximize Return on Investment Using ERP Applications. Worster, Weirick, Andera.

“Remember that if you fail to implement, who cares what the software (ERP) does?” Modern ERP, Marianna Bradford.

undefined“Standardization is the key antidote to low productivity.” Lean Six Sigma for Service.  Michael L. George

undefined“You give me good people and a great process, and we’ll beat any organization with the best technology but a poor process and under motivated people.” Information Week – Focus on the Process.  Doug Patterson, VP and CIO.

“The assumption is the thicker the report the greater the “due diligence”. This may actually be measuring waste, not actionable information.” ERP Information at the Speed of Reality: ERP Lessons Learned, Wayne L. Staley.

undefined“Every customer measures (ERP business) success differently.” Competing for Customers, Jeb Dastell, Amir Hartman, Craig LeGrande.

undefined“Integration costs, which include both year zero and continued operational expenses, can be as much as 40x each application’s initial cost over the life span of a typical (ERP) application.” Containing Vendor Sprawl: Improve Security, Reduce Risk, and Lower Cost, IDC.

“Reducing costs does not necessarily drive efficiency.”, Business Cases that Mean Business: A practical guide to identifying, calculating and communicating the value of large scale IT projects, Jim Maholic.

undefined“A business case will not convert a flawed hypothesis into a sound one.”, Business Cases that Mean Business: A practical guide to identifying, calculating and communicating the value of large scale IT projects, Jim Maholic.

Organizational Enablement

undefined“Untrained (or under trained) users may end up needing three to six times as much support as end-users who have been trained.” ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

undefined“Experience shows that the greater employee involvement in the change, the greater the positive response in understanding the compelling need for the change and the sharing of the vision.”Managing the Change Process, David K. Carr, Kelvin J. Hard, William J. Trahant. Coopers & Lybrand Center of Excellence for Change Management

“Prototyping and testing provides one of the highest forms of learning that ERP team participants can receive.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“An ERP system cannot be installed without the capability of an organization to change.”ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“People are one of the hidden costs of ERP implementation.  Without proper training, about 30 to 40 % of front-line workers will not be able to handle the demands of the new system.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

undefined“The users of the ERP will be confronted with a huge amount of data; most of the data will have no relevancy to any decision that needs to be considered.”ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

undefined“Operation and maintenance phase begins with a period of initial struggle until people become comfortable in their roles and tasks.  The duration of this stage depends on how effective the training was.” Enterprise Resource Planning, Alexis Leon.

“Old adage is true: the longer the work stays in process, the more it costs.” Lean Six Sigma for Service, Michael L. George.

undefined“Every forward-thinking enterprise values productivity, which is one of the first things to suffer when technological systems are not end-user-friendly.”, Enterprise Resource Planning, Alexis Leon.

“When data cleansing or manual translations are required, end users should be part of the team.” Successful Packaged Software Implementation, Christine B. Tayntor.

 “Untrained users simply do not take advantage of the system for the intent that is was purchased.” Enterprise Resource Planning , Alexis Leon.

“Education may be viewed as understanding of concepts and practices. Training, however, if the application of education into day-to-day events.” Directing the ERP Implementation, Michael Pelphrey.

“Maintain the project team for at least 1 month after the go-live date.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

“Manual input of data is the best possible training method.” The Executive Guide to Implementing Accounting Software, Ken E. Sebahar.

undefined“People can’t be controlled like machines: Service processes are far more dependent on the interaction of people (both internal handoffs and working with customers) than are manufacturing processes.” Lean Six Sigma for Service, Michael L. George.

“Go at a pace that suits the organization’s readiness.” Lean Six Sigma for Service, Michael L. George.

undefined“The logic is inexorable – the better the training, the faster you will see the business metrics move in the direction you are looking for.”  ERP Demystified. Alexis Leon.

undefined“Without change, performance would never improve. Modern ERP.”  Marianne Bradford.

“Resistance, in many cases, is simply a sign of a lack of communication.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

undefined“How can one manage change if one does not understand exactly what is changing”. ADKAR – A Model for Change in Business, Government and Our Community, Jeffrey M. Hiatt.

undefined“There are limits to how much change an organization and its end users can stomach at once.” Why New Systems Fail. Phil Simon.

undefined“In an organization undergoing change, building a resilient work force by widely disseminating the change vision and strategy and by minimizing disruption is essential.” Managing the Change Process, David K. Carr, Kelvin J. Hard, William J. Trahant. Coopers & Lybrand Center of Excellence for Change Management.

undefined“Train and then re-train: The best approach to training is to do it several times. Once is not enough. Three recommend points of training are follows are: On Design, Before test, Post go-live.” Top 5 Recommendations to Ensure Your ERP Implementation is Successful, Sandeep Walia.

undefined“If you think education is expensive, try ignorance.” Derek Bok.

undefined“Although consultants may participate in testing to some extent, employees should drive the majority of testing.  Doing so maximizes knowledge transfer and readies them for real life under the new system.” Why New Systems Fail. Phil Simon.

 “A common mistake made by many business leaders is to assume that by building awareness of the need for change they have also created desire.”  ADKAR – A Model for Change in Business, Government and Our Community,  Jeffrey M. Hiatt.

undefined“Every organization that implements an ERP system is, in effect, reengineering.” Modern ERP, Marianne Bradford.

undefined“A time-tested maxim in training is always to build on what you know.” Principles of the Business Rule Approach.  Ronald Ross.

“The development of knowledge is an iterative process, in which experience and lessons provide the basis for deeper understandings in ongoing feedback loops.” Developing Knowledge-Based Client Relationships, Ross Dawson.

“Nothing is more irritating than being forced to serve the system instead of the system serving the customer”, ERP Information at the Speed of Reality.  Wayne L Staley.

“Ollie Wight said it well: “Grease-gun education doesn’t work.” He was referring to the one-shot, quick-hit educational approaches tried so often without lasting results.”, ERP: Making It Happen: The Implementers’ Guide to Success with Enterprise Resource Planning, Thomas F. Wallace.

“Gartner Research recommends allocating 17 percent of the project’s budget for training. Those companies spending less than 13 percent on training are three times more likely to have problems.”, Concepts In Enterprise Resource Planning, Ellen Monk and Bret Wagner.

undefined“A key point: Don’t train before you educate.  People need to know what and why before they’re taught how.  Education should occur either prior to, or simultaneously with the training.”,  Erp: Making It Happen; The Implementers’ Guide to Success with Enterprise Resource Planning, Thomas F. Wallace.

“The more they are satisfied with the system, the more they are engaged with it and the higher their level of assimilation. “(Wagner & Newell, 2007), Beyond ERP Implementation: An Integrative Framework for High Success, Kouki, Pellerin, Poulin.

“The impact of the human factor on the degree and effectiveness of ERP assimilation supersedes the technological factors.” Kouki, Pellerin, Poulin, Beyond ERP Implementation: An Integrative Framework for High Success.

“A big mistake made with (ERP) software purchases is leaving user buy-in until the implementation phase. When this happens, users feel the sofware is being foisted on them without their input.”, Chris Doig, Rethinking Enterprise Software Selections.

Rapid Implementation

“In order to do rapid implementations, trade-offs must be made.” E-Business and ERP, Murrell G. Shields.

“Rapid Implementations: The data cleanup must start early in the project for the organization to be prepared for the data conversion.” E-Business and ERP, Murrell G. Shields.

“Rapid implementation cannot be done with a massive project team.” E-Business and ERP, Murrell G. Shields.

undefined“Deliver sooner rather than later.  It is rare to get 100% support for any project; “fence sitters” will wait to see how things turn out before giving their support.” Modern ERP, Marianne Bradford.

“The training in a rapid implementation should be hands-on.” E-Business and ERP, Murrell G. Shields.

“The four key characteristics or enablers of knowledge transfer in communication are: (1) Interactivity, (2) Bandwidth, (3) Structure, (4) Reusability.” Developing Knowledge-Based Client Relationships, Ross Dawson.

undefined“Good people can make a bad system work; bad people can’t make a good system work”.  The Reengineering Handbook. Raymond L. Manganelli, Mark M. Klein.

undefined“The “Train the Trainer” Pitfall: It is not realistic to assume someone can be trained several weeks before the go-live and expect him/her to deliver quality training.” Control Your ERP Destiny.  Steven Scott Phillips.

Data Conversion

“If your existing data is inaccurate and unreliable a new software system will not fix that.” Consider, Select & Implement an ERP system. O’Sullivan, Rico, Goldensohn.

undefined“In order to increase the chances that the conversion will go smoothly, do a dry run test of the conversion plan prior to the real go-live.” Control Your ERP Destiny. Steven Scott Phillips.

undefined“When implementing a new ERP system you need to start data migration from the existing legacy business systems as soon as possible.” ERP Demystified. Alexis Leon.

undefined“It is recognized that information accuracy is not a system problem, but rather a management problem.” Directing the ERP Implementation. Michael Pelphrey.

undefined“Do it once, right at the source.”  Principles of the Business Rule Approach, Ronald Ross.

“The data migration phase of a project can consume up to 30% of the total project resources.  The most common flaw in data migration planning is that too few resources are invested in it.”  Top 10 Reasons Why Systems Projects Fail. Dr. Paul Dorsey.

undefined“Extracting and cleansing the data from the existing system can be the single largest task in the project.” ERP Demystified.  Alexis Leon.

undefined“Customers should be asked to net off the pending Credit Notes, Debit Notes and Advances against Invoices in both receivables and payables systems before providing the data for conversion into ERP.” Selected Articles on Enterprise Resources Planning (ERP) – Vol 1. VK Ramaswamy.

Evaluating Consulting Partners

“Consultants are there for guidance, but the final say regarding implementation should fail upon the management’s responsibility.” ERP 308 – Most Asked Questions, Leonard Frost.

undefined“There is a misguided belief that experienced consultants face no learning curves with the software.”  Control Your ERP Destiny.  Steven Scott Phillips.

“The more the consultants know about the company the better they will be equipped to provide good advice.”  ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“Bait and switch.  This is the practice of displaying certain consultants, during the sales process, to show the sales company understands business and the ERP implementation process to ensure a successful outcome.” Enterprise Resource Planning (ERP) The Great Gamble, Ray Atkinson.

undefined“Have successful project managers who are capable of anticipating what can go wrong.” ERP Demystified, Alexis Leon.

“No company, no manager is sufficiently brilliant to think about all of the complexities and complications inherent in a cross-functional ERP project.” Mission Critical – Realizing the Promise of Enterprise Systems, Thomas Davenport.

“Overspend on consultancy is often compensated for by a cut-back in training.  This is not helped by the fact that training costs tend to be under-estimated in the first place.” ERP – The Implementation Cycle, Stephen Harwood.

undefined“The less you know the more money they (consultants) make.” Control Your ERP Destiny, Steven Scott Phillips.

undefined“Where knowledge transfer is a key objective, project handover should be formalized, rather than just letting the engagement end.” Developing Knowledge-Based Client Relationships, Ross Dawson.

undefined“Process is not a substitute for skill.” Agile Project Management, Jim Highsmith.

undefined“Selecting the consultants (and an implementation methodology) is as important as selecting the (ERP) package.” ERP Demystified. Alexis Leon.

“There is often a level of arrogance in ERP consultants who are taken with replacing existing systems, a level of arrogance that is generally counter-productive.”  Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

undefined“It is better to know all the questions than some of the answers.”  James Thurber.

“There is no such thing as an easy implementation of an ERP project.” Enterprise Resource Planning (ERP) the Great Gamble. Ray Atkinson.

“Discipline creates well-organized memories, history, and experience.” Balancing Agility and Discipline. Barry Boehm, Richard Turner.

“(ERP) Service organizations are essentially big “people machines”, where having a high level of turnover is just as deadly as if a manufacturer was constantly asked to change machine parts.” Lean Six Sigma for Service. Michael L. George.

“Implementation audits are necessary to keep the project on track.  Audits should be conducted to compare project results, business objectives, systems objectives, and project objectives.” Directing the ERP Implementation. Michael Pelphrey.

“Claims of ‘proven paths’, ‘best practices’, and simplistic implementations methodologies, that fail litter the ERP landscape as each software company seeks to gain some form of advantage over its rivals. “Enterprise Resource Planning (ERP) the Great Gamble. Ray Atkinson.

undefined“Although selecting an experienced consultant was a critical success factor in implementation and maintenance of an ERP system, the effective transfer of knowledge was more vital.”, Critical Success Factors in ERP Implementation in US Manufacturing, Justin Lee Goldston, Phd.

ERP Innovation

undefined“Roles are finite.  People are infinite.” Agile Project Management, Jim Highsmith.

“Knowledge often emerges from the collaboration of people with very different ways of looking at their field.”  Developing Knowledge-Based Client Relationships, Ross Dawson

“Interaction drives innovation.  Innovation emerges from the interaction of diverse individuals.” Agile Project Management, Jim Highsmith

undefined “Digital Darwinism is unkind to those who wait.” R “Ray” Wang: An interview by Bob Morris, Bob Morris

“What businesses need is not a one-time fix for individual processes but an environment that combines business and technical systems to produce processes that flex and recombine as required by changes in the market.” Business Process Management – the third wave, Howard Smith and Peter Fingar.

ERP Project Success

undefined“A real configuration of an ERP system can only happen when there is real data in the system.”  Enterprise Resource Planning “Alexis Leon.

undefined“As Tom DeMarco and Tim Lister (2003) so pithily state, “If a project has no risks, don’t do it.” Risk is an essential characteristic of innovation”.”, Agile Project Management, Jim Highsmith.

“Cost overruns are manageable if the project will achieve worthwhile benefits; however, failing to satisfy business goals is always unacceptable.” Principles of the Business Rule Approach, Ronald Ross.

undefined“Customers like rapid delivery.  Rapid delivery means companies can deliver faster than customers can change their minds.”  Lean Software Development, Mary Poppendieck & Tom Poppendieck.

undefined“Lack of alignment of ERP system and business processes is a major issue in the implementation of ERP.” ERP Implementation Challenges & Critical Organization Success Factors, Rajeshwar Vayyavur.

“A hybrid (cloud) model will add complexity”.  Transitioning the Enterprise to the Cloud, Ed Mahon.

“It is important to recognize how fast ERP team members, and organizations, can acquire new knowledge.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“You can have a cheap, fast or quality implementation, but you only get two”. How to select your ERP without losing your mind, Andy Pratico.

undefined“Understand the implications of the decisions you make.” Rapid Development , Steve McConnell.

“Industry leaders have not effectively defined the set of business skills that should be included in any ERP consultant’s educational process.” Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

“One of the biggest mistakes during ERP projects is not taking the time to build a common understanding of how business is conducted today and potential improvement opportunities.” Control Your ERP Destiny,  Steven Scott Phillips.

undefined“If the project becomes all things to all people, it will fail to meet anyone’s expectations.” Control Your ERP Destiny, Steven Scott Phillips.

undefined“A consultant with software knowledge is one thing, but if the consultant is a poor communicator, it undermines the transfer of knowledge.”  Control Your ERP Destiny, Steven Scott Phillips.

undefined“Job 1 is to run the business.  Very close to that in importance should be implementing ERP.” ERP: Making It Happen, Thomas Wallace & Michael Kremzar.

“A methodology will help ward off risk, but a contingency plan is still absolutely necessary.” ERP Demystified, Alexis Leon.

“The lesson here is that organizations will encounter great peril when the system they seek to install does not fit their culture.” Mission Critical – Realizing the Promise of Enterprise Systems, Thomas Davenport.

“ERP Success: Know what features and objectives will NOT be included in the project.” The Executive Guide to Implementing Accounting Software, Ken E. Sebahar.

undefined“Due diligence may feel like a waste of time and money, but weighed against the high cost of failure, it is imperative.” ERP Information at the Speed of Reality, Wayne L Staley.

“There must be awareness throughout the organization of the importance of scope management.” E-Business and ERP  , Murrell G. Shields.

“The longer the timeframe and the further apart the milestones in a project, the harder it is to create a sense of urgency.” E-Business and ERP, Murrell G. Shields.

undefined“Plans are worthless, but planning is everything.” General Dwight Eisenhower.

“Deferring decision(s) will cause significant risks to the (ERP) project success.”  Directing the ERP Implementation, Michael Pelphrey.

“Many of the major decisions and actions that ultimately determine whether a project is a success or a failure occur very early in the life of the project.” E-Business and ERP  , Murrell G. Shields.

undefined“The best people for the project are likely to be those who have the least free time, since they are already in key positions.” ERP – The Implementation Cycle, Stephen Harwood.

“Success is not to be found in excellent project management alone. ADKAR – A Model for Change in Business, Government and Our Community, Jeffrey M. Hiatt.

“There are literally thousands of decisions that must be made on these projects.  The project team must be empowered to make most of them.  That is one reason organizations must put their best people on these teams.” E-Business and ERP  ,Murrell G. Shields.

“The rumor mill and grapevine are active in most companies, and it is in the project team’s best interests to preempt them by providing clear, consistent, targeted, and ongoing communications.”  Successful Packaged Software Implementation, Christine B. Tayntor.

undefined“But technology is not reengineering.  Reengineering changes the business processes – the way the work is done.”  The Reengineering Handbook, Raymond L. Manganelli, Mark M. Klein.

“Projects that skimp on upstream activities typically have to do the same work downstream at anywhere from 10 to 100 times the cost of doing it properly in the first place.” (Fagan 1976; Boehm and Papaccio 1988).  Rapid Development, Steve McConnell.

undefined“The success or failure of a new system hinges directly on the acceptance of that system by the organization’s end users.” Why New Systems Fail, Phil Simon.

“The goal of an integrated enterprise is to reduce information float, that is, the time between when data is captured in one place in the system and when it becomes available and usable.  e-Business Roadmap for Success.  Dr. Ravi Kalakota & Marcia Robinson.

Chris Koch of CIO.com writes, “Blank sheet reengineering can lead to unrealistic business process designs that can’t be implemented through enterprise software.”.

undefined“A major cause of this difficulty (failures) is that organizations building these systems tend either to assume that components can be simply thrown together or they fall back on the traditional engineering skills and processes with which they are familiar-skills and processes that have been shown not to work in the building of COTS- based (ERP) system.” Evolutionary Process for Integrating COTS-Based Systems (EPIC) Carnegie Mellon – Software Engineering Institute.

“Agile methods universally need close relationships with the customer and users of the systems under development.”  Balancing Agility and Discipline. Barry Boehm, Richard Turner.

undefined“The truth is, no organization plans to fail – rather, they fail to plan…” Control Your ERP Destiny, Steven Scott Phillips.

“Two overriding criteria that mast be present if the implementation of a COTS solution are to be successful: realistic expectations and organizational flexibility.” Successful Packaged Software Implementation. Christine B. Tayntor.

undefined“Planning can become mechanistic and succumb to a checklist mentality.” Balancing Agility and Discipline.  Barry Boehm, Richard Turner.

“The longer a team, large or small, goes without delivering an integrated product to a review process, the greater the potential for failure.” Agile Project Management. Jim Highsmith.

“Inclusion of end users promotes acceptance of the solution and helps break down “us versus them” barriers.  Working together, the two groups will provide a balanced evaluation.”  Successful Packaged Software Implementation, Christine B. Tayntor.

“It is only prudent to allow for some slippage in time and budget, and not to count on full project functionality until after testing and installation are complete.” Managerial Issues of Enterprise Resource Planning Systems, David L. Olson.

undefined“The highest probability of successful implementations of ERP software is when there is only a minimal need to change business processes and ERP software.” Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk,  Daniel E. O’Leary.

“Bad processes (and systems) beat up good people.”, Consider, Select & Implement an ERP system, Dr. Jill O’Sullivan, John Rico, Dennis Goldensohn.

“Effectively managed implementations are deliverable driven.”, E-Business and ERP: Rapid Implementation and Project Planning. Murrell G. Shields.

undefined“Change control is about coordination, not denial.”, Agile Project Management. Jim Highsmith.

undefined“For an ERP implementation to go smoothly and provide value, it is critical that a company understand both its current processes and the state of the process after implementation.” Concepts in Enterprise Resource Planning, by Ellen Monk, Bret Wagner.

“Making partners of customers means they become more likely to understand technical constraints. You start to get rid of the “I need it all now” phenomenon, and customers begin cooperating to find realistic, mutually satisfying technical solutions.” Rapid Development, Steve McConnell.

“The timelier the validation, the better.”, Directing the ERP Implementation, Michael Pelphrey.

undefined “Don’t try to fool yourself that you will be able to catch up (project schedule) just by trying harder.  It won’t happen.” Making ERP Work, Sam Graham.

ERP  Utilization

undefined“ERP systems will not exhibit their full potential unless they are properly integrated with other enterprise software applications.”  ERP Demystified. Alexis Leon.

“ERP is a philosophy for operating a business model.  If your company does not want to adapt to this philosophy, save yourself the headache and don’t pursue ERP.” Directing the ERP Implementation. Michael Pelphrey

“Implementing the ERP system and realizing the promised benefits are two different ball games. Implementation can be a success, but if the operational phase is not planned and organized properly with the support of all the people involved, then the promised benefits will not materialize.”  ERP Demystified.  Alexis Leon.

 “Achieving early wins and optimizing user buy-in can pave the way for controlling both political and fiscal costs down the road and increase the chances of delivery project on time and on budget.” Total Cost of Ownership: A strategic tool for ERP planning and implementation. Richard West, Stephen L. Daigle – California State University.

undefined“A good system will shine light into dark corners.” Making ERP Work. Sam Graham.

undefined“A major overhead in operating ERP systems is entering transactions. Transactions take time, cost money and introduce the possibility of errors.” Making ERP Work. Sam Graham.

undefined“Perfectly designed automation will only work as well as it is adopted by the people who use it.”  Leah Allen.

JIT is Just Plain Wrong for Cloud ERP

Given that we are well in the third decade of ERP implementations, I still observe ERP implementations following outdated/misguided concepts that do not utilize limited resources to the fullest.  One of these misapplied concepts is Just-In-Time (JIT) training.  End user enablement continues to be an implementation challenge primarily due to the limited investment made for the most important component of an ERP business solution.  This limitation must be addressed in order to realize the value of ERP in the Cloud.

Evolving Traditional ERP Testing for Cloud ERP

Consider the following illustration that highlights the tradition user involvement model:

Limited User Involvement

Traditional User Involvement

Traditional ERP implementation approaches view end users as an audience versus an active participant to leverage during the entire implementation.  End users by far make up the largest stakeholder group in an ERP implementation however; they have the least amount of involvement and responsibility.  Let’s further contrast and identify opportunities where end-user involvement can have a positive influence on ERP implementations.

Rethinking the Waterfall Testing Paradigm

If we take a stroll down memory lane we can recall the standard testing approach we learned from the Waterfall Software Development Lifecycle (SDLC):

Limited ERP Testing

Traditional Testing Approach

Consider the following:

  • The majority of testing and hands-on experience occurs with a limited group of users leaving a small window for direct users to gain confidence and experience with the ERP system.
  • The limitation with direct user involvement is based on the premise that a working system is not available until the end of the implementation.       This is not the case with a Cloud ERP system that can be provisioned early during the implementation life cycle.
  • JIT End User training is a big bang approach – one time shot to get end-user training right. It also gives end users limited time to internalize the change. This approach naturally requires additional support and creates a greater potential for user errors.

Waterfall is based upon software being developed from scratch – i.e. you could not actively involved end users until the software existed.  When ERP came to the market many approach/processes designed for software development were incorrectly applied to ERP implementations.  The next section we will discuss how to involve the target audience sooner during a Cloud ERP implementation.

Increasing End User Involvement

There are two key value propositions for increasing end-user involvement:

  1. Additional validation of the solution via testing.
  2. Greater user adoption and enablement.

For robust testing business users should first be trained on the ERP Cloud service.  Remember that testing can be “hands-on” learning for business users.  Consider the following illustration:

Increasing User Involement

Incremental User Involvement with ERP Implementations

Let’s expand on some key themes.  First, education/learning is an iterative process where new information needs to be assimilated by users before knowledge is created.  Second, an educated user is a better contributor to the project.  Third, it is easier to manage and support educated end users.  A forward-thinking end-user enablement process drives greater participation and ownership.

Consequences of Not Evolving your User Enablement Approach

As ERP Cloud adoption continues we will see an increase in the following implementation drivers:

Market Drivers for Cloud ERP

Market Drivers for ERP Cloud Implementations

Consider that traditional ERP implementation approaches do not effectively leverage the largest resource pool available.  I can appreciate that with additional resources comes greater coordination and communication channels (N * (N-1) / 2) yet I have witnessed that the business value outweighs the associated project risk.  With the above said I do not recommend we start involving end users without some level of enablement and guidance.  Just as an individual user learns a new system over time the end-user training approach should incrementally prepare the user for greater involvement during the ERP Cloud implementation.

Following are key consequences if we continue with a JIT user involvement strategy:

JIT User Enablement

Potential issues/risks from take a JIT user enablement approach

The JIT approach is being used to squeeze pennies out of an ERP Cloud implementation when the potential risk that results is far greater and eventually must be solved through additional dollars or lost opportunities.

Challenge to Cloud ERP Service Providers and Implementation Partners

Cloud ERP Service Providers and Implementation Partners should take the lead in promoting and supporting end-user involvement earlier during the implementation.  Unfortunately, Cloud ERP Service Providers are not providing a robust set of tools and services for incremental user enablement.  Test cases should be business process focused and not just business function oriented.

Implementation Partners must also adapt to this new paradigm.   It is unfortunate that many implementation partners choose to address ERP Cloud Implementation drivers (mostly cost) by reducing project leadership and transferring user enablement to the customer – regardless if the customer have the required tools/competencies for incremental user involvement.  This short-sighted approach ultimately leads to an unfavorable customer experience with Cloud ERP.

Summary

Just in Time (JIT) is an operations management approach for improving ROI by minimizing inventory and related carrying cost for a production process.   JIT is a viable strategy given that the process is production quality and all input variables are within controlled tolerances.   Implementing a Cloud ERP solution is not a production quality process nor are all input variables can be controlled.  This concept has been applied to ERP end-user training with the intent of maximizing training investment.  JIT training reduces the need for refresher training due to ERP knowledge loss experienced if training precedes the go-live event over a long period of time.  JIT training may be a valid approach for end users after the ERP Cloud service is in Production but it is a limited strategy to employ during an ERP implementation.   Make the end-user an active partner not a passive customer.

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