When ERPs Attack! How to avoid ERP Failure.

(Another in an occasion series of Lefkowitz Systems emails about Spire for users of SBT, ACCPAC and Sage Pro).

Some ERP implementation projects fail, and some fail spectacularly. Google “ERP failure” and you will find many horror stories. I have seen a few in my career. What follows describes the real risks of an ERP project and steps you can take to avoid failure. And what does this have to do with Spire? If you upgrade to Spire (or any other ERP), you are embarking on an ERP project.

Implementing a new ERP is a difficult process. The job is done once a decade at most, it is a big project and it takes time to plan and execute. ERP implementation is not part of a company’s core competency. The risk of project failure is big. When it happens, ERP failure is expensive and, for some companies, ruinous.

[Definitions: Your SBT, ACCPAC or Sage Pro system is an ERP (“Enterprise Resource Planning” system). Spire is an ERP. “ERP implementation” means choosing an ERP and getting it up and running.]

Here are 13 bits of wisdom learned during my 30 years in this business about how to avoid ERP failure. If you want your ERP project to succeed, please follow my advice.

1. Requirements first, solutions second.

I cannot tell you how many times clients and prospects have told me they want a new ERP, which one they want but not why they want one. These are potential train wrecks.

Why do you want a new ERP? Write it down. What do you expect from your new ERP? Write it down. What do you like about your current ERP that the new one must do? Write it down. What is wrong with your current ERP that you expect your new ERP to fix? Write it down. These answers are your requirements.

When you know what you want (requirements), you will know it when you see it. Too many ERP projects put solutions before requirements. Big mistake! Requirements first, solutions second.

2. Prioritize.

Now that you have your requirements, prioritize them. What must you have on Day One and what can wait? Divide your requirements into “Day One” and “Later” buckets. Focus on Day One requirements when planning the implementation. Put off what can be put off. Many ERP projects flop because there are too many Day One requirements. Prioritize ruthlessly.

3. Pick your ERP and your consultants wisely.

Now that you have your requirements, find the right ERP and the right consultants. Finding the right ERP is easy when you know what you want.

You need consultants. Vet them. Ask for references. Hear their ideas. Ask how they bill. Ask if they know your industry. Consider hiring them before buying the ERP to do a preliminary discovery and needs analysis project. Then decide if you can work with them on the larger project.

4. Timing.

Do you have a busy season? Do not implement during your busy season. When are your key people taking vacations? Do not implement when your key people are on vacation. Projects flop because the timing is wrong. This one is easy to avoid but, oddly, companies still make this mistake. Do not be one of those companies.

5. Find an in-house leader.

Very important! There must be an in-house leader. This person must be capable and must have authority to make decisions. Do not rely on the consultants for project leadership. We consultants do not work for you. You hire us to do a specific job. We are good at implementations, but we have no authority. Projects without capable, in-house leaders fail.

6. Go fast!

Go fast! Go fast! Go Fast! I cannot emphasize this one enough. The longer an ERP project takes the greater the chance of failure. As a project drags on, people lose interest and the project flops. Do what it takes to get the new system launched quickly.

I like Spire because it can be implemented quickly. If your consultants talk about a long implementation, look for a new ERP and new consultants.

7. No distractions.

Identify key, in-house people for the project and allocate their time to the project. Projects flop because key people are busy doing their regular work. If you need to hire or borrow temporary workers to cover for key people working on the ERP, do it.

8. Use your consultants wisely.

We are good at certain things. We know the software. We teach and train. We are good problem-solvers. Tell us what you want from the software and we will come up with a plan to do it. But we are expensive, and we are not always with you. Use us wisely for the things you cannot do and do what you can yourself. Which segues to…

9. Self-sufficiency.

Self-sufficiency is your goal. This is your ERP, not ours. When we are gone, you will be stuck with your ERP. We are not abandoning you, but we are an outside resource. If you find yourself leaning on us and not solving problems without us, neither of us did our jobs and the project flops. You must approach the ERP project with the attitude that you own the ERP and the consultants are simply an outside resource at your disposal.

10. Set a realistic budget.

ERP systems and their implementations are expensive. Think of the new ERP as a ten-year capital asset and set your budget accordingly. If you set the budget too low, you will get the wrong ERP, inadequate consultant support and catastrophic project failure. You do not want this. Do not be ‘penny wise and pound foolish’ with your ERP project or it will flop, and your entire investment will be lost.

11. Don’t panic!

During an ERP implementation, things will get worse before they get better. But they will get better. Unless you panic. Then things will get worse and the project will flop.

A typical implementation creates a week of turmoil. Everything is new and different. People complain, worry and doubt. Managers get nervous and some panic. Then they suspend or end the project. This is very bad. Suspended projects rarely resume and become failures. Don’t panic!

12. Don’t “run parallel.”

When you go live on the new ERP, do not “run parallel” (run old and new ERP simultaneously). This doubles your work and triples the chance of failure. It is very easy to abandon the new ERP because the old ERP is still alive and users are working twice as hard. Don’t do it! Cut over to the new ERP and…

13. Don’t look back.

Disable the old ERP. The temptation to back-slide will be hard to resist. Resist! Look forward. In a week or less, you will forget the old ERP. This is what you want.

Spire is a good choice for avoiding ERP project failure. Let me tell you why before you embark on your ERP project.

Matthew Lefkowitz, President
Lefkowitz Systems, Inc.
Tel: 415/657-9900
Email: matt@lefkowitzsys.com
web: www.lefkowitzsys.com

When ERPs Attack! How to avoid ERP Failure.