When companies first venture out into the ERP marketplace, they will see limitless possibilities to improve their business. However, somewhere along this journey, many projects hit difficulty and the promised business benefits often fall short of expectations, leaving a lot to be desired.
Azzure IT have found that this low benefits realisation is often due to both the buyer and the provider failing to define the expected benefits of a solution, and align the business around some common goals early on in the project life-cycle. We have found that organisational alignment is not always at the top of buying business’s priority lists when selecting a new ERP system, and more often than not, companies are trying to find a system as quickly as possible to address their immediate pain points, therefore losing sight of their long-term business goals.
While staying focused on realising long-term goals is not always easy, Azzure IT have devised several strategies to help businesses ensure they see the benefits of their new ERP system, that can be implemented both before and during their selection process.
1. Understand where your business is right now
Addressing the pain points in your current processes can be an excellent way to begin the journey for finding a new ERP solution, as it lets you fully map out exactly what you will need it to do.
During this mapping process, it’s vital to capture the right detail, and the correct amount of detail. For example, you will need to measure exactly how long a process takes, how many systems it has to go through to completion and how many people know how to do the process on your old solution, so that you can accurately measure improvements post go-live with your new solution.
As the business goes through the process of identifying pain points, it’ll gradually find opportunities for improvement, which can be used as a requirements document when searching for a new solution, and an appropriate vendor.
This is also the ideal time for a business to start considering how to not only fix the processes that aren’t working, but also to identify which mediocre processes they want to improve on as well, and how a new system can help them achieve this.
2. Outline your expected benefits, and how you will judge ROI
When we first embark on ERP projects with businesses we work with, we help them clarify their overall business goals, so they can determine whether Microsoft Dynamics can support these goals.
To help these businesses answer this question with any degree of accuracy, we help design future state processes based on the improvement opportunities they have identified previously, while mapping where their business is right now. To do this, we identify their current pain points that they want to resolve, their long-term business goals, and how they want to achieve them.
By conducting this process, it enables both Azzure as the vendor and the buying business to quantify their expected business benefits. For example, it enables the business to quantify the time and cost that it will take to achieve a current state process change, and a future state process.
Once the business has estimated all their expected benefits, one of the most effective tools is to develop an ERP business case. This tool allows the business to set key performance indicators (KPIs) to judge the upcoming project on, and track them throughout the project and post go-live.
In addition to the creation of KPIs, a business case should also focus on estimated costs as well as expected return on investment (ROI). While you can estimate ROI without focusing on a particular vendor, many companies will re-calculate expected ROI once they’ve evaluated several enterprise systems. Ultimately though, your business’s ROI will depend not only on which piece of software or vendor you select, but on how well the project is executed.
We also see many companies coming to us who justify their ERP purchase by pointing to issues with their legacy systems, such as a lack of support, scalability or a decrease in vendor viability. While these are legitimate reasons to consider implementing a new system, they must be coupled with a series of more ambitious, long-term business goals.
3. Create a realistic and manageable project plan
One of the key reasons that ERP projects stagnate and do not reach completion is that the unrealistic expectations set at the beginning of the project are never realised, causing frustration and a lack of motivation to complete the project, eventually leading to a lack of support at board-level.
Many companies inaccurately estimate the time, budget and resources that are required to effectively implement a full ERP system, and this often causes issues later on down the line, putting the whole project into jeopardy.
The best way to ensure that your business does not fall foul of this is to leverage the help of a trusted and knowledgeable Microsoft Dynamics vendor, such as Azzure IT, to help you define a realistic project plan.
We also ensure businesses include activities that are overlooked in project plans, such as change management and business process management. These activities help companies realise more tangible business benefits.
4. Make sure everyone knows the system you’ve chosen
You can’t realise business benefits if end-users aren’t prepared to use the new software. This is why it’s essential to communicate with and train employees as early as possible.
We provide a series of on-site and off-site training to help clients identify resistance to change early in the project, so they can proactively address it. This training reduces change resistance and helps employees understand how their individual processes support project goals.
5. Continually measure your long-term goals
By continually identifying where the gaps are between your project’s projected benefits and actual benefits throughout the process of implementing an ERP solution, you help your team understand what they are doing well and how they can improve.
A session of root cause analysis can identify the causes of these benefit gaps. A common root cause is end-users using workarounds because they don’t understand the importance of embracing the new technology and ways of working.
It’s also important to continually measure benefits post go-live, even though the ERP project team will most likely be tired and ready to move on from the project, but successful ERP projects never end.
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