How to put your project on the right track from the beginning
The popular opinion is that every project starts with the selection process. Dr. Axel Winkelmann, ERP expert and professor at the University of Würzburg, recommends to first think about some basic aspects, though. And we can only agree. Read here what aspects should be clear before you start your ERP project.
Dr. Axel Winkelmann
An ERP project does not only renew the technological backbone of a company. It also often transforms business processes, thereby changing the daily business of a majority of the employees. Therefore, companies should consider some basic aspects at the very beginning, meaning way before selecting the software:
Clarify the why
You know something is off when you need to take inventory every few months because the stock figures are all wrong, or the management has to wait days for analyses. If by switching your ERP system you mainly try to resolve such issues, you fail to reach your full potential.
The implementation of an ERP system is also a chance to change the bigger picture: Companies should figure out what they want to achieve in the future and what they need to do so.
This process can be started with questions like "How do we want to work in the upcoming years?" and "Where do we see potential for sustainable business models?".
Organizational obstacles: identify "lame layers"
Homemade problems and organizational obstacles often impede efficient data flow. Axel Winkelmann compares this to impermeable loam layers – or "lame layers".
Consistency is just as important to business operations as to the project organization in order for objectives and instructions from the management to reach all levels. But also in order for suggestions and input from the employees to reach the top levels and not to get stuck on a "Yes, but" somewhere in the middle.
Speaking of project organization: Wrong teams are often the reason that ERP projects fail. The cardinal error is to place everything in the hands of the IT department.
"How should the IT department discuss organizational measures and also implement them? That's just not possible. So we always need the leading hand in this project, the foresight of someone who has an overview of the entire company," says Axel Winkelmann.
From capacity to cash: set the economic framework
Along with the question of budget, you should also discuss the timing at an early stage: Are there seasonal peaks or other deadlines to be considered? How can you make sure the project team has the required capacity?
If you think you can burden your employees with project work in addition to their daily work, you should not be surprised to find that the motivation might leave much to be desired.
To estimate the internal workload, Winkelmann has an empirical formula for us: "If an ERP consultant spends one man-day at your company, you can add two and a half or three man-days of own work."
Establish clear communication structures
It's all about sharing experiences. Projects that run in the background often run the risk of failing. It's important to include employees and communicate plans openly, whether in a regular newsletter or speakers corners in the canteen.
At the end of the day, the employees must be familiar with the plans of the management. This increases the commitment, the perceived appreciation and the readiness of the employees to work with the new software.
Back to the drawing board: prepare change processes
An ERP project is not just about the technology but also about organizational changes as departments, processes and rules must be reorganized. Not every employee will meet these changes with enthusiasm.
Such a huge project also incites fears. And if you just turn your back on them, all you get you will be unmotivated and obstinate employees.
It's better to foster understanding for the upcoming changes and to give employees the chance to actively contribute. Demystification is key here.
It's only human to want to get your way: anticipate conflicts
Naturally, every department will try to map their previous processes and requirements in the new system as well. No one likes to attune to others, let alone another software. Conflicts are inevitable here.
As the consultants of the ERP provider are often not considered impartial, it might make sense to hire a mediator as a neutral third party to moderate if required.
It has to be clear from the outset that while customizations are possible, they should be reduced to a minimum in order not to impair future updates.
Solid data, solid business
Axel Winkelmann also recommends to specify the data basis of your company as soon as possible: Who needs what data? Where does the information come from and where does it go? You might also already define the first technological requirements at this early stage.
Winkelmann urgently warns against only considering the well-meant recommendation of friends at another company or business partner when selecting an ERP system. Chances are that it doesn't fit your own business model and vision.
Tap into know-how sources
Only very few people within your company will have a lot of experience with the implementation of an ERP system. After all, companies carry out such a project every 10 years only, if not every 20 or 25 years.
To get a hold of the necessary expertise, you'll need to hire new employees and lean on external support. The consultants of the provider are not only familiar with the system, they can also contribute best practices from their experience with similar industries.
Cut to the chase
"It's no use spending five years preparing the perfect project without putting it into practice," says ERP expert Winkelmann. Your competitor might already be implementing the digital benefits while you're still hesitating for fear of missing an important aspect.
How to get out of this dilemma? Use prototypes and choose software that can be configured to a great extent.
And last but not least, Winkelman puts a lot of emphasis on the correct expectation management. Not all of the processes will be improved immediately. But overall, a well-prepared ERP project will make the entire company ready for digitalization, enabling different and better processes than ever.