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ERP implementations: In search of ERP best practices

Besides the obvious blockades to an ERP implementation — the cost and the potential long-term disruptions to the business — midmarket companies are still moving forward with ERP projects.

I’ve been getting some interesting questions about how to move an ERP project forward since sharing Peet’s Coffee & Tea’s ERP implementation story. One email was from a person who has never done an ERP implementation before and is hitting a wall at the stage of choosing an ERP vendor.

I certainly don’t have all the answers, but I can tell you that a series we ran called ERP Journey chronicled a CIO’s 20 months spent choosing and installing an ERP system. One big point was how he chose a system after identifying and reviewing some very vertical-specific packages, contacting some user groups and even asking other companies in his same field what they used and why.

At Peet’s, CIO Tom Cullen started out by sending RFPs to several vendors (Microsoft, Oracle and SAP), asking them to choose their top three implementation partners. Cullen ended up going with Microsoft Dynamics AX for several reasons. One was that Microsoft had a strong partner that had done many Dynamics installations, but the partner also had expertise in the industry that Peet’s plays in: food and beverage.

Peet’s also went with Dynamics because the company is a Microsoft shop, making it easier to integrate with existing systems such as its Microsoft BizTalk integration layer, and giving end users a familiar interface.

Another point brought up by Kirk Sloan, consulting director of Junction Solutions, the Microsoft partner that helped with Peet’s installation, is to choose an ERP system that requires minimal customization, “because more customization means a longer timeline, more testing, more costs and more likelihood that the project will fail.”

I am skipping over a lot of steps here of course because I have never been involved in the process of choosing an ERP vendor. I do know that all projects share many of the same obstacles during the planning through installation phase. You will run into pushback on many levels, from IT and from business users who just don’t want to learn a new system. Then there is the bigger picture of how much the new system will impact and completely change the business processes and essentially the way the business is run.

Commenting on the Peet’s article, blogger Raj Sheelvant says:

“It’s not Engineering Change Management, but People Change Management that is more challenging [in reference to an ERP installation]. Automating business process by itself is not difficult. But to do that in the face of resistance from not only the management but all the employees needs strong leadership skill — change management skill.

“…People change management is hard and it’s wise to expend upfront energy to rally everyone behind the goal of Engineering Change Management. Individuals and departments needs to be transitioned to a desired future state before implementing ERP. I think this is the only way to successfully implement ERP for SME organization.”

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It may sound simple- but the process of making sure that the reasons for implementing ERP are understood and shared by key stakeholders is a key starting point. Given the difficulty of the ERP process - and let's not kid ourselves - it is ALWAYS difficult - unless the reasons are compelling it is likely that the project will stall when the going gets difficult and demands are being placed on people's time and other competing interests take hold. To be continued . . .