ERP implementation again – modern approach to selection

03 September 2019

Written by René Hol

Often business people in manufacturing industries face confusing messages about ERP-systems and how they should deal with it. The tenor of the messages is frequently ‘ERP is old-fashioned technology’ or ‘there is no business case for a new system’. On the opposite side, newly to the ERP-arena cloud entered software solution providers target companies with obviously attractive value statements such as ‘no more big investments’ and ‘easy to implement because you act incrementally’. In the daily practice, management and the company’s staff notice how the ERP-system impacts their daily performance. In particular when a company has to renew its business model it feels in its capillaries the limits the current ERP sets. For example, many equipment manufacturing companies have the urgent need to move from a project-oriented, Engineer-to-Order, kind of business model towards a product-oriented company based on Configure-to-Order principles. A crucial success factor in this transition is an ERP-system that fits. That’s why, despite all hype messages advising against, many industrial companies are in the process of selecting and implementing a new ERP, or at least they plan to do so.

Technology trajectory/Digital strategy

Having decided we need a new ERP, the first step is often to decide if the current system can be upgraded, renewed or re-implemented. Especially the leading ERP-supplier have attractive offers here. They provide dedicated methods and techniques to go through such a process. If the decision is to enter the selection process of a new ERP, it makes sense to define a policy on the technology side first. Today it means to stipulate how you want to deal with cloud. In a previous blog Marc Droste discussed the pros and cons of cloud ERP (https://www.mobina-it.com/nl/blog/volgt-erp-de-wereldwijde-it-beweging-om-alles-naar-de-cloud-te-brengen/) (Dutch language only). Additionally, the ERP-system is part of an integrated business and IT-architecture. The embedding in the total landscape also sets conditions for any new ERP. Hans Wortmann discussed this topic in his blog (https://www.mobina-it.com/blog/investments-new-technology-require-architecture/).

Business trajectory

When the technology boundaries and conditions precedent are set, you can focus on the functional side. How do I select the best ERP for my firm: the best support of my business vision, and the strongest business case? Step 1 is always defining what you want or need. Let’s call this the business blueprint. The starting point is the vision, strategy and direction set by the management. In the past consultants spent a huge effort with interviews, workshops and acceleration sessions to draft a blueprint of business processes, organization and IT-requirements. The blueprint is still a required and valuable deliverable. However, it does not need to cover all details before you can move into ERP package selection. The detailing happens during the selection and implementation process.

The business blueprint needed for ERP package selection can be generated fast today. Modern software and knowledge tools have captured best practices and field experiences. That includes classic business process modelling (BPM) tools (or even more advanced Intelligent Business Process Management Suites (iBPMS), various reference models (e.g., SCOR, ITIL) and content rich tools. These tools unfold the content in a change sensitive way to the people in the organization. Like this the blueprint can be drafted top-down but also bottom-up with the cornerstone people in the organization. The tooling also provides management from a content perspective the control instrument to get implemented at the end where they aim for at the beginning of this process.

Aspirations defined, direction mapped. What’s next?

Having the initial blueprint in your hand you can commence the real selection process, which takes 6 to 9 months. The selection method and techniques are discussed in detail in the next blog. The way of working should include important characteristics. First of all, at the end of the selection process you must be ready for implementation; that means creating and maintaining momentum. The package selection should also detail the business blueprint and people in the organization must be mobilized during the selection. Motivation is created by demonstrating the benefits of the future state. The business aspects should stay central and not the features of the software. Business terminology is leading and should be bridged to package functionality. But also the strengths and opportunities leveraged by the software should enrich your blueprint. And the process should be fast.

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