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ERP Improvements Improving ERP Performance

 
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By Rick Cook

Several analysts classify Enterprise Resource Planning (ERP) software implementations from A to D according to how successful they are. Class A implementations work well and meet the goals set out at the beginning of the ERP implementation process. Class D implementations are barely functional.

When people talk about ERP failures, they usually mean a Class B or C, or sometimes a Class D implementations. That’s bad, but it’s not necessarily the end of the world. You can turn around a B, C, or even a D implementation with some candid root cause analysis, strategic planning, systemic execution and troubleshooting skills. In fact several ERP software implementation surveys indicate that a lot of Class A implementations went through a prior stage of being B, C, or D before they were fixed.

How Do You Know You Have A Problem?

Real problems with ERP systems show up in deviations from the goals you set back in the early stages of the planning process. Something, or more likely several things, aren’t working right and that produces measurable variances from the goals you set for your company.

Some of those things may be external to your company. Your inventory is messed up because an erupting volcano in Iceland has delayed air freight shipments from your European suppliers. Or you’re not meeting your sales goals because of a global recession. There are very real problems, often beyond direct control, however, can be mitigated with varying degrees of reactive planning. Most of the challenges or problems you face can mitigated or resolved by actions within your control. Don’t be too quick to rely on external causes. Remember, you’re looking for fixes, not excuses.

Make Sure You Have Support

Like implementing ERP software in the first place, fixing ERP applications requires support from the top. Upper management has to be committed to the idea of making enterprise resource planning systems work, or work better. If executive sponsors are not in your corner, it's better not even to start.

Talk To The Users

Once you’ve got the support from management you need to talk to the users and understand what’s wrong from their perspectives. These aren't likely to be comfortable, or even rational conversations. People with an underperforming ERP software system are likely to be burned out and defensive. It’s also important to recognize that enterprise software difficulties fuel resistance to change and exacerbate user adoption challenges.

Be prepared to let users vent and make sure they understand your goal is to fix things, not to find someone to blame. Eventually, with patient questioning and a non-judgmental attitude, you can get to the bottom of the situation. Before proposing any solutions, it will be to your advantage if you can help your users understand how their roles in using the application software directly or indirectly contribute to the strategic objectives which launched the project in the first place.

Exactly What Isn’t Happening?

What parts of the system aren’t being used? This is the first thing you need to find out. Chances are there's more of the application that isn't being used than is.

Why Not?

Pay close attention to what the users tell you. It may be that they’re not using, say, some inventory control features because of ingrained resistance. But it’s at least equally likely they’re not using the inventory control system because it’s unusable – at least in the way they have historically used inventory management or the method in which they have been trained in the new enterprise software.

It’s almost certain by this point that there are negative feelings about the inventory control system, but you need to find out if that’s a primary or secondary motivation. Most of the time you’re going to find out that there is at least some degree of difficulty or flat unusability in the system.

The question then becomes “why, specifically, is the inventory control system unusable?” If you’re very lucky the problem will turn out to be something like a lack of configuration or poorly designed series of screens. That’s lucky because it’s relatively easy to fix. Most of the time you’re not so lucky and the system requires modification, possibly even new software development. In the case of inventory it is very likely your people aren’t using the inventory system because the system fails to accommodate needed business processes, fails to produce necessary information or produces inaccurate or incomplete information. However don’t guess and don't settle for the easy answer. Drill down until you have the specific problem(s) understood with root cause analysis identified.

Make A List And Rank Your Problems

When you get done with this process you are probably going to find a lengthy list of challenge or problems, some real, some excuses. Take a close look at that list and prioritize the items by two criteria: How serious is the problem? How easy is it to fix?

What you’re looking for here is low-hanging fruit. Ideally you’re going to find some problems that are both serious and easy to fix. Sometimes you’ll find there isn’t much overlap between “easy” and “important” and have to make the tougher decisions.

Start With The Easy Ones

You need to show some quick results here, so if possible start with the easy problems to fix. Often these are located in areas where the company interfaces with the outside world, such as customer relationship management (CRM), supply chain management (SCM) or purchasing. Something like the inventory control system is more central to the company, but unfortunately harder and more time consuming to fix.

In the beginning, try to start with problems that require a minimum of process re-engineering. Changing processes in a major way often has far reaching implications with other business software systems and requires adjustment on the part of the users - and as much as possible you want to ease the load on the users at this stage.

These may be baby steps and may seem hardly worth the trouble. But early wins are important in building the confidence and gaining the cooperation of the users.

From there it’s a matter of working your way down the list. Don’t assume you have to take things in order of ease of fixing, although that’s the easiest and can build a momentum which further breaks down user adoption challenges. Skip around if you have to. But in every case make sure you understand exactly what is wrong, down to a root cause analysis level, and then devise the project plan which definitely demonstrates how you intend to fix it. End

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