IT, New Media & Software

Wednesday, 18 June 2008 12:48

Misconceptions undermine ERP implementations

{pp}Misconceptions about Enterprise Resource Planning (ERP) systems underlie consistent criticisms that they do not deliver on expectations, says Mike McGrath, Red Man Technologies’ strategy enablement executive.

“Despite having been in the industry for more than a decade, ERP is still misunderstood. Implementation failures are blamed on technology, yet our experience has been that the human factors are largely to blame. Both implementation partners and customer organisations seem not to have accepted some very basic requirements for making ERP systems work.”

ERP, he says, is not a silver bullet that will make organisations more efficient and effective if the existing processes are inadequate.  ERP systems mainly deal with the automation of business processes across the business. They do not re-engineer or replace them. Nor do they address management’s ability to interpret information for decision making.

“There has to be a business – rather than technical- bias to implementing an ERP system. This means putting in charge of the ERP project people who understand the enterprise’s business and operational strategies. Both the implementation partner and the client need to prioritise the business skills of their team leaders.”

McGrath says that if ERP systems are to support competitive business strategies it is essential to have a high-level executive driving the project, and being accountable to the board.

An effective ERP system will change the way the business operates and, from the outset, change management strategies need to be in place to minimise resistance to change and employees must be properly trained to become willing and effective users of the system.

McGrath adds that often the fundamentals are sidelined when scoping the size of the project, leading to cost over runs, gaps in the solution and disillusioned users.

“ERP will disappoint if it merely automates the existing processes. Most ERP systems use ‘best practice’, but it is best to pro-actively map the current processes, understand the ‘to-be’ processes and decide how to close the gap.”

Integration with other systems – and the costs of this - are often glossed over at the early stages of the project. Often this means that extra investment has to be requested while the project is in progress and, because integration was not thoroughly thought through from the start, its implementation may be inadequate.

McGrath says that ERP’s real power lies in enabling relevant decision-making, yet in many projects this is not included in the original scope that focuses on capturing reliable data and automating processes.

Reporting and Business Intelligence projects should be an integral part of any ERP project.   

Contact Information:
Mike McGrath – This email address is being protected from spambots. You need JavaScript enabled to view it.
Cell: +27-82 554 6225
Tel: +27- 31 336 2676

Marian Shinn – This email address is being protected from spambots. You need JavaScript enabled to view it.
Cell: +27-82-831-2429
Tel: +27-21-788-5011

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