erp enablement methodology ,,, how to guarantee an erp implementation success story

"ERP Enablement Methodology" ,,, How to Guarantee an ERP Implementation Success Story

of 6 Mohammad S. Abu Sbeih, CPIM

"ERP Enablement Methodology" ,,, How to Guarantee an ERP

Implementation Success Story

By: Mohammad Abu Sbeih, CPIM * in April 21, 2013

A. Introduction

According to Gartner; 75% of ERP projects are considered failures.

Lack of end user buy-in, implementing ERP over inefficient or ineffective processes,

inadequate functional requirements definition, misfit of application software with business

processes, poor ERP package selection, unclear implementation scope, un-systematic

approach for vendor selection, and miscalculation of time and effort are the most common

root causes for ERP failed projects.

B. Pillars for Successful ERP Implementation

Implementing ERP as a tool by itself is just one

piece of the business performance puzzle. How well

you design your business processes and manage

organizational and personal change, your ability to

find ERP software with capabilities that exactly

match your business needs, and the way that you

select the ERP vendor are other key aspects of

planning for successful ERP implementation.

C. Is it right to go to the ERP vendor directly?

Most ERP failure stories start by going directly to an ERP vendor, and launching

the ERP solution within a few months.

ERP by itself will NOT deliver value to your business if you do not improve your

business process first, ERP just automates your operational transactions



(purchasing cycle, financial vouchers cycle, etc.), and if you automate an

inefficient process, the process will remain inefficient.

There is a big difference between installing and implementing ERP; installing

ERP is just to setup an IT software application, BUT implementing ERP is more

than that, it is a long journey that begins with reviewing business case, improving

your process performance, and considering change management before just

installing the IT software, and it is continued after that by monitoring the

benefits realization of ERP

Going directly to the ERP vendor will launch the ERP quickly, NOT the value.

D. "PDCA-based" ERP Value Creation Cycle

For any improvement project, and to get full advantage from your investment, it is

necessary to follow "PDCA Based - Value Creation Cycle".

PDCA means Plan for your project carefully, Do what you have planned for, Check the value

delivered by implementation against what you are supposed to get, and Act the correct

action related to the check results.



Performing "DO" alone means you do not take sufficient time for planning, and do not

practice a closed-loop monitoring style for your investment.

By disregarding/ignoring these two important things; "DO" will deliver something you

cannot measure and manage.

ERP is not a simple software package you buy off-shelf; ERP is a strategic decision to use an

expensive tool to manage your resources, so it requires a long journey before and after the

implementation itself to "Enable" your company to create a success story and gain fully

what's expected from ERP.

E. "ERP Enablement" Methodology

1. ERP Readiness Assessment

Are your people, processes, system, and organizational infrastructure ready to embark upon

an ERP implementation?

Have you built the foundation necessary to navigate obstacles and steer the project toward

predicted success?

By conducting comprehensive surveys, detailed diagnosis for existing systems, and

uncovering all existing challenges, you should decide to either start looking for vendors, or

postpone ERP implementation until the business processes are redesigned to be more

efficient before being automated.

2. Business Processes Improvement

ERP just automates your operational cycles; ERP will not improve your tactical or strategic

processes or, even, inefficiencies in your operational processes, so "Before automating it,

simplify and improve it".

3. Organizational Change Management

Lack of Top Management support and End User buy-in is one of the top root causes for

ERP failures. To ensure clients realize benefits from ERP, you should address the “human

factor” by actualizing and sustaining long-term organizational and behavioral changes.



4. ERP Optimizing

"There is no ERP fit for all"

Buying ERP by looking at its capabilities before considering your business needs may lead

you to pick ERP modules and functions that are not required for your business case.

And if you already have a very strong IT application with high potentials, should be

obsoleted - as all ERP providers' presales teams told you?

ERP optimizing is a very important and much overlooked step before ERP selection, you

should start optimizing by understanding your business needs, determining functional

requirements (FRs) which are capabilities should be available in prospect ERPs to meet your

actual business needs, and then filtering FRs by existing IT application capabilities, if existing

IT applications matches FRs, then it should be retained and integrated with the new ERP,

otherwise it should be obsoleted.

Applying "ERP Optimizing" means that you decide what functions are to be included in the

ERP by considering your actual business needs and existing IT applications, NOT by

temptation from ERP presales team.

Remember: it's not important what ERP can do, the question is: What do I need from ERP?

5. ERP Software Selection

Start selection process by matching ERP software capabilities with client's FRs, and the

software that achieves the highest level of matching will win the race. By doing this you will

ensure the lowest level of customization percentage, which is healthier to your ERP Project.

Is There Such a Thing as Choosing the “Right”

Software?

By following ERP optimizing and software selection process, you

will never select ERP based on perception, gut feeling, faulty

information, or what competitors or other large companies have

chosen.



Instead of that, you will:

• Use a Quality Functions Deployment (QFD) based approach in

order to translate your actual business needs to functional

requirements that should be available in the prospect ERP solution

• Match these FRs with various ERP solution capabilities to ensure

that the ERP software fits your needs

6. ERP Vendor Selection

Evaluate vendors after receiving their proposals according to restricted evaluation criteria

(such as their implementation methodology, change management effort, quality means,

reputation, references, financial capability, delivery approach, and others), and select the

most suitable one.

7. Post ERP: Benefits Realization Assessment

According to Gartner; 27% of clients either have not been able or did not attempt to

measure business benefits from ERP.

Benefits realization assessment ensures that the client fully realizes the potential benefits of

ERP, or not. You should review the business case for implementing the ERP, collect and



document the organization's baseline performance levels before the ERP "goes live" and

post-implementation, analyzes the gaps, and recommends action plans to bridge that gap.

(*) Mohammad S. Abu Sbeih is currently working for

METHOD as Lead Business Consultant. He has ten years of

excessive experience in the fields of Project Management,

Business Process Management, and Organizational

Restructuring and Development in various manufacturing

and consulting firms in MENA region. Recently he has

participated with METHOD in the development and set up

of different PMOs for many industries.

You can reach him at:

([email protected])

(+966 547 933 026)

mailto:[email protected]

erp enablement methodology ,,, how to guarantee an erp implementation success story

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