When Willamette Valley Co. was searching for a new enterprise resource planning (ERP) system to replace its three antiquated legacy systems five years ago, it staged a talent competition between the two finalists.
"We wanted a hands-on test in a mini-system environment to see if the vendors' software worked with our data," said Gerald Nakamura, CIO of the Eugene, Ore.-based manufacturer of industrial patching, coating and application equipment.
Industrial and Financial Systems, IFS AB, a Linköping, Sweden-based enterprise applications vendor, emerged the victor in the ERP test, which ran for three days and required a week's worth of data preparation by Willamette employees –- time well spent, Nakamura noted.
Implementing an ERP system can be as painful as primitive dentistry and as harrowing as a climb up Mount Everest. But smart companies realize new technology won't fix broken processes. The biggest challenge Willamette Valley faced after deploying its new ERP system was to get "employees recognizing that this was not an IT initiative, but a companywide business strategy to put in new systems to run our business," Nakamura said.
A little wariness around an ERP implementation can be conducive to a productive implementation, said Patrick Gray, president of Prevoyance Group Inc., a strategic IT consulting company with headquarters in Harrison, N.Y. "A lot of companies look at ERP as a system you can slap in and live happily ever after," Gray said. "Companies must do their homework around how the technology will impact the organization, instead of focusing on features and such."
Deliberate evaluation of ERP systems is key
Gray stresses deliberation around any ERP implementation, focusing solely on addressing those areas where a company needs to improve versus whiz-bang features or specialized requests from one department that can throw the project off track. A yearlong implementation would be fast for a large company, and timelines of 18 months to three years should be common.
"The best-run projects have business-side sponsors, those who understand the 'why' questions of implementation and can track the benefits," said Andrew Robison, managing consultant at Arlington, Va.-based PA Consulting Group. "The project is not for IT but for changing processes."
When evaluating vendors, personnel in departments that will be affected by the project can better define mission-critical aspects of the business to create a list of must-haves for any system. Those must-haves should include as much detail as possible so side-by-side comparisons can be made.
Another common misstep is to use unnecessary features simply because they're available. Robison said most enterprises use no more than 40 percent of an ERP system's features, which makes prioritization even more important.
Partnering on implementation of ERP systems
To make implementation run smoothly, IT staffs should work collaboratively with business leaders. "IT isn't much help if your staff can't offer much beyond troubleshooting in case you get an error message," Prevoyance Group's Gray said. "With process expertise and IT leadership with good credibility, IT can do a good job with ERP."
Nakamura stressed the importance of partnering with your company's ERP vendor. Since installing its IFS system five years ago, Willamette has added functionality as its employees became more familiar with the system and its uses. The company also conducted extensive training over a six-month period to familiarize users with the new system and then emphasize key performance measures.
Preparing and training new ERP users
The focus on training cannot be emphasized enough, said Marianna Ruocco, ERP program director at Toronto-based Pink Elephant, an IT professional services firm. The company realized that its existing customer relationship management (CRM) system wasn't meeting business objectives because employees hadn't been properly trained on how to consistently interact with the system.
Technology can be a wonderful tool to transform business processes, but without the help of employees who understand how to interact with the system ... that tool is worthless.
"We made a decision early on to not buy a new tool but to focus on processes," Ruocco said. "The tool isn't always the problem, and the tool isn't always the solution."
Standards and expectations around the CRM system were rewritten into an 80-page manual; employees were trained on how to input data in a consistent way using a standardized set of expectations; and new hires receive CRM training as part of employee orientation.
Technology can be a wonderful tool to transform business processes, but without the help of employees who understand how to interact with the system and clearly defined business processes, that tool is worthless.
"The impact on people, you can't forget it or underemphasize it," Ruocco said. "If people resist the change coming to them, you have to deal with it. Even though change is for the positive … there's still a chance not everyone sees that right away."
Matt Bolch is a freelance writer based out of Atlanta. He can be reached at firstname.lastname@example.org.
This was first published in March 2007