Enterprise System Spectator blog: ERP and enterprise system vendor evaluation, selection, and implementation.

The Enterprise System Spectator

Saturday, February 27, 2016

The Role of Fear in ERP Implementation

Photo Credit
One of Deming’s 14 points for management was, “Drive out fear, so that everyone may work effectively for the company.” By this he meant that employees should not be afraid to point out problems, provide feedback, or make mistakes in an effort to improve. Business leaders should engage employees positively in continuous improvement.

But when it comes to business leaders themselves, fear can be a powerful motivator. And, nowhere is a healthy fear more needed than in ERP implementation.

It is difficult to think of a major project that is riskier for an organization than an ERP implementation. It ranks right up there with a major strategic merger or acquisition in terms of potential to disrupt the business. This is because an ERP implementation touches nearly every function of the business, nearly every business process, and nearly every employee. Although ERP systems involve computers, they are not IT projects: they are business change initiatives. Do it wrong, and you may find yourself as a case study on the front page of the Wall Street Journal.

Hopes and Fears

I recently co-led a half-day workshop for a large client in the manufacturing industry that is about to embark on a wholesale replacement of their aging ERP system. The participants were 18 of the firm’s business leaders. We covered the history and role of ERP, reasons for failure, lessons learned from successful implementations, typical processes most in need of improvement, and the roles and responsibilities of business users in the implementation.

At the end of the workshop, we conducted a short exercise that I call, “Hopes and Fears.” We invited the participants to list the things that they hoped would result from the implementation. They responded with a variety of benefits, such as improved efficiency, lower inventory, better planning, and a more modern user experience.

We then asked them to list the one thing they were most worried about, the thing they most feared as they looked forward to the implementation. Here the mood turned more serious as they expressed their fears, such as that they might not get enough training, that inventory might actually increase during the transition, that employees might not speak up when things weren’t going well, and that customer delivery schedules might be disrupted.

But the one thing that worried this group the most was that they wouldn’t have the resources to get the implementation finished while still taking care of their regular duties. Would they have the bandwidth? We had told them that they had to put their best people on this project, but could they afford to do that? Where would they get additional personnel? The top executive in the room spoke up and assured the group that the company was ready to spend the money to make those resources available.

At this point, I told them that I had accomplished my unspoken objective. My goal in conducting this workshop was to put some fear into them, as business leaders. Nothing concerns me more than when I see a company begin an ERP implementation thinking that it is no big deal, that they can delegate the project to the IT department, or to the system integrator. Or, thinking that they can treat an ERP implementation as just another project, like installing a new production line, or implementing a new safety program.

Address Fears in Contingency Planning

Healthy fear can be a strong motivator in ERP implementation. At the same time, fear should not lead to paralysis, leading an organization to not move forward with new systems.The right response is to address each of those fears in the project plan, in the form of contingency planning.
  • Are you afraid you won’t have sufficient resources? Allocate budget to hire additional resources to back-fill the regular responsibilities of project team members. 
  • Are you concerned that business users won’t adopt the new system? Develop and implement a change management plan as part of the implementation. 
  • Are you worried that customer delivery might be disrupted? Allocate extra time in the acceptance testing phase to ensure that doesn’t happen. 
You can never completely eliminate risk in an ERP implementation. But with careful planning, allocation of resources, and management commitment you can greatly mitigate those risks.

Labels: , ,


by Frank Scavo, 2/27/2016 11:37:00 AM | permalink | e-mail this!

 Reader Comments:

Fear can also be a great motivator.

Couple of my ERP implementations were shotgun marriages. M&A spin outs that Sr Mgmt assumed could continue using the prior corporate system w/o buying a new license from CA / Oracle etc. Then BAM a 30-45 day cease desist or buy A $1 million (or pay a lot of money) for a license. Triggering a very rapid end-to-end implementation with data conversion, process flow conversion, training and golive.

Couple of things I learned,

Don't run dual systems (park the old system use it for reference only).

Don't convert live data, key in physical inventory balances, key in open Purchase and Sales orders.

If you can switch from traditional Work (shop) orders orders to repetitive backflush. So that production completions pull from raw material all the way to finished goods (or close BOM level to FG). This minimizes people training and allows production to continue w/o skipping a "drum beat".

MRP is your friend use it to blow demand orders through phantom / pseudo BOMs to open POs and filter it to make a production plan (that should be same as your real factory production [need advanced APICS level know-how here].

This assumes the Systems Integrator converts all the static data including G/L, item master, BOM, supplier / vendor, customer master files. Key the rest in, quicker than converting (every minute counts).

One week before paying 30 day ransom note, go live, enter in all open orders, open balances, fix any missing data as you go. (expect to work 16 hour days go live week). Validate inventory, open sales orders, purchase plus AR and AP.

A coda. I know this ERP implementation approach is unconventional (puts major stress on your people, but it saves money and your jobs). Requires a highly skilled expert SI who knows their ERP product inside out and can grip you business).

If you have more time, don't know which system to implement, or have other operational complexity, call Frank.

Btw, Most of my implementations were newco's from Excel or Quickbooks the same general approach worked. Don't use 2 systems and try and spend time figuring out why balances are different Or customizing new system to work like the old one (wastes time, wastes money). Also don't have many meetings. Just make a plan, run it by, and execute it. Do it all so quickly your auditor's don't know (they will get in the way).












 
Clive, good advice. Interestingly, a lot of what you shared were points that we included in our workshop. Especially the advice on migrating data.
 
Post a Comment
 

Links to this post:


 

Powered by Blogger

(c) 2002-2016, Frank Scavo.

Independent analysis of issues and trends in enterprise applications software and the strengths, weaknesses, advantages, and disadvantages of the vendors that provide them.

About the Enterprise System Spectator.

Frank Scavo Send tips, rumors, gossip, and feedback to Frank Scavo, at .

I'm interested in hearing about best practices, lessons learned, horror stories, and case studies of success or failure.

Selecting a new enterprise system can be a difficult decision. My consulting firm, Strativa, offers assistance that is independent and unbiased. For information on how we can help your organization make and carry out these decisions, write to me.

My IT research firm, Computer Economics provides metrics for IT management, such as IT spending and staffing benchmarks, ROI/TCO studies, outsourcing statistics, and more.


Go to latest postings


Search the Spectator!
Join over 1,700 subscribers on the Spectator email list!
Max. 1-2 times/month.
Easy one-click to unsubscribe anytime.

Follow me on Twitter
My RSS feed RSS News Feed

Computer Economics
ERP Support Staffing Ratios
Outsourcing Statistics
IT Spending and Staffing Benchmarks
IT Staffing Ratios
IT Management Best Practices
Worldwide Technology Trends
IT Salary Report

Get these headlines on your site, free!


Awards

2014 Best Independent ERP Blog - Winner

2013 Best ERP Writer - Winner

Alltop. We're kind of a big deal.
 
Constant Contact 2010 All Star Technobabble Top 100 Analyst Blogs


Key References
Strativa: Business strategy consulting, strategic planning
Strativa: IT strategy consulting
Strativa: Business process improvement, process mapping, consultants
Strativa: IT due diligence
Strativa: ERP software selection consulting and vendor evaluation
Strativa: CRM software selection consulting and vendor evaluation
Strativa: Project management consulting, change management
StreetWolf: Digital creative studio specializing in web, mobile and social applications
Enterprise IT News: diginomica


Spectator Archives
May 2002
June 2002
July 2002
August 2002
September 2002
October 2002
November 2002
December 2002
January 2003
February 2003
March 2003
April 2003
May 2003
June 2003
July 2003
August 2003
September 2003
October 2003
November 2003
December 2003
January 2004
February 2004
March 2004
April 2004
May 2004
June 2004
July 2004
August 2004
September 2004
October 2004
November 2004
December 2004
January 2005
February 2005
March 2005
April 2005
May 2005
June 2005
July 2005
August 2005
September 2005
October 2005
November 2005
December 2005
January 2006
February 2006
March 2006
April 2006
May 2006
June 2006
July 2006
August 2006
September 2006
October 2006
November 2006
December 2006
January 2007
February 2007
March 2007
April 2007
May 2007
June 2007
July 2007
August 2007
September 2007
October 2007
November 2007
December 2007
January 2008
February 2008
March 2008
April 2008
May 2008
June 2008
July 2008
August 2008
September 2008
October 2008
November 2008
December 2008
January 2009
February 2009
March 2009
April 2009
May 2009
June 2009
July 2009
August 2009
September 2009
October 2009
November 2009
December 2009
January 2010
February 2010
March 2010
April 2010
June 2010
July 2010
August 2010
September 2010
October 2010
November 2010
December 2010
January 2011
February 2011
March 2011
April 2011
May 2011
July 2011
August 2011
September 2011
October 2011
November 2011
December 2011
January 2012
February 2012
March 2012
April 2012
May 2012
June 2012
July 2012
September 2012
October 2012
December 2012
January 2013
February 2013
March 2013
May 2013
June 2013
July 2013
September 2013
October 2013
December 2013
January 2014
February 2014
March 2014
April 2014
May 2014
June 2014
July 2014
August 2014
September 2014
October 2014
November 2014
December 2014
February 2015
March 2015
April 2015
May 2015
June 2015
July 2015
September 2015
October 2015
November 2015
February 2016
May 2016
June 2016
July 2016
August 2016
September 2016
Latest postings