Three warning signs, that the ERP implementation will go wrong.

Note: In further text please understand the “Software Company” as the ERP vendor and “Production Company” as the company, which commissioned and uses the ERP to control its business.

Before starting ERP implementation, try to ensure an open discussion with all stakeholders to align on the reasons for the implementation and expectations. If you will recognize some from following three statements in any form, you should be alerted:

“We are not able to control our processes, therefore we need ERP”

This is simply wrong motivation for ERP implementation. The right reasons are efficiency, accuracy and flexibility. Yes, with properly applied ERP you can improve your flexibility! Regardless how complicated the business process is, if it cannot be explained by the owner just with pencil and single sheet of paper, it will fail. Noticed the “owner” in previous sentence? Each process must have a dedicated owner (key user) per functional area (Sales, Supply chain, Finance …) from the production organization. He is the primary contact for the software company consultant and he assures that the implantation is supported by all users in his domain. ERP will provide you with more “muscle”, but the “brain” is provided by people in production organization. The one, who hopes to get “brain” for his own business from external provider, is lost…

‘Master data are no issue; the consultants will upload them automatically’

Master data are not just “information”, stored in the old system, which must be migrated to the new one. Master data (SKU, BOM, Customer/Supplier details, Price lists, Chart of account, projects/cost center structure…) are the back-bone for correct representation of all transactions recorded in the system (orders, stock movements, costs, sales…) Clean, relevant and understood master data are the key factor for successful “go-live” with the new system. Also in this case a dedicated owner in the production company is needed. He must assure that the master data are up to date and reflects the business flows. In smaller production organizations the key user and master data owner per functional area, can be the same person. Incorrect or incomplete master data will spoil the transaction data, distort the outputs and will be main reason for frustration when using the system.

“Who will provide us with user documentation?

Because the processes are not owned by the software company, but by the production company, the user documentation must be owned by it too. Here comes the biggest task for the key users. They may receive from the software company templates for the user documentation, but it is their primary responsibility to ensure that the user documentation is adopted for the production company, all stakeholders understands the process and are trained properly. After go-live, the key user as process owners will propose all modifications to existing implementation scope.

Here is a brutal fact. Changes in modern ERP system, when it is properly understood and owned by production organization, do not require much support from software company. Usually only adjustment in master data is needed. This improves the satisfaction with ERP in the production organization and dramatically reduces the ERP ownership cost. Otherwise the ERP will change to a money pit …