Let’s be clear about one thing: no matter what any software vendor tells you, an ERP system represents one of the largest investments any manufacturer will make. Investment goes beyond the initial capital outlay to include the cost of management time and project team input throughout the implementation.
The time taken to implement a new or upgraded ERP solution is even more critical today, as manufacturers pick up the pace and accelerate out of recession. “Many firms have made cutbacks during the downturn and now it is vital they can maximize the benefits of their systems as quickly as possible,” agrees Neil Rushby, Supply Chain Divisional Manager for business-led consulting and software supplier, Access.
Ask five ERP vendors what their typical time frame is for an implementation, and you may well get five different responses. Some systems are notoriously complex and there have been tales of manufacturers abandoning implementations part-way through. However, Rushby has a firm view on this: “One of my golden rules is every implementation should be completed within six to nine months,” he says. “That’s the point when people’s enthusiasm within the business will start to lose momentum. At the beginning, everyone is focused on the project and there’s a real wave of energy that you need to harness.”
There are generally two key reasons why implementations stall. The first is because the system selection process was not sufficiently detailed: unforeseen requirements surface after once implementation has begun. The other is poor time management of the project, either in terms of work or time specification. “Some suppliers specify insufficient days for the project, probably in an attempt to undercut a rival for the deal,” warns Rushby. “Then, when the days are used up, there can be conflict between client and vendor. The same conflict can occur if the project has not been planned properly from the outset.”
There’s no doubt some software vendors will price to win the business. However, few manufacturers go into an ERP project believing that best price automatically means best system. A well-considered, well thought out selection process will highlight any discrepancies and is crucial for both parties. “For your proposed implementation, you should have a detailed project plan with a breakdown of how and where days will be used – and, importantly, on what tasks,” says Rushby. “For example, if one supplier quotes a low number of days, say 15, when you look at the detail you may see they are only allowing two days for training. Another business may quote 30 days and allow ten for training. It’s all there in the detail and, done correctly, the manufacturer knows right from the start not only what days the vendor is committed to, but also what resource they need to provide to ensure the project is delivered on time.”
Given the scale of the task, it’s little wonder some buyers are tempted by offers of no-risk implementations, often where the software is rented rather than purchased. But Rushby says these offers mask the true cost: “Don’t be fooled: the biggest cost for implementations is the company’s time and the risk of potential disruption to the business.”
Partnership may be an overused term, but there are few instances where the term applies better than between manufacturer and ERP supplier. A successful ERP implementation hinges on the people you work with and the service you receive. This is not a commodity purchase in any sense: it’s a process in which supplier and manufacturer work together to find a long-term solution that will adapt and grow with the business as it changes.
This means there is work to be done by both parties before and during the implementation. Rushby says early identification of key people within the manufacturing business is essential: “During the selection process, you should identify your own project team comprising around half a dozen people who are key representatives from all areas of the business. Each should be involved in selection to make sure it meets all their needs. You need a system that fits your business; don’t change your business to fit the software,” he urges.
That said, no amount of pre-planning can cover every eventuality: “Anyone who says an ERP implementation won’t throw up unexpected issues is not being truthful with you,” says Rushby. “In projects of this nature there will always be an unanticipated problem at some point. But it’s how the vendor and customer can work together. That’s the key.”
Increasingly, some ERP suppliers – Access is one – are offering two levels of implementation. As well as full implementation, there is a rapid program for customers where time is of the essence, to get the basic system functionality installed quickly – two to four months instead of six to nine months. “It’s becoming more and more popular,” says Rushby. This ‘lite’ approach is better than the alternative – choosing the wrong system on a promise of fast implementation. “It means you can choose the best system for your business, secure benefits very quickly, but then be safe in the knowledge that you can expand on the functionality later.”
And that confidence only comes from entering into a partnership with a business you trust and which you feel will add value to your business for many years to come.Posted by Jason Rourke, Marketing Manager, ProfitKey International Written by Neil Rushby, Courtesy of Manufacturing Digital