Enterprise Resource Planning Myths and the Simple Truths You Should Know
The ‘Dark Side of the Moon’ is indeed a Pink Floyd album, as well as a phrase used to describe the side of the moon we can’t see; the unchartered side. When referring to the dark side of something, you would assume a place with no light and no hope. However, there is a bright side to the dark side of the moon. Believe it or not, the dark side of the moon sees just as much sunlight as the face we see on Earth. Here, we give you the bright side to common qualms about ERP projects.
At first glance, ERP and associated services appear a little costly. I can tell you that you get what you pay for in this case. There could be a fee for a consultant, an up-front cost for the system – depending on your subscription agreement. There are also sometimes costs that you won’t account for in your budget. We would recommend you set an amount aside for unexpected eventualities. Examples of your budget stretching the extra mile:
- Every project will have an allocated number of days as per your contract agreement. Extra paid days will be required when the project has run over the forecasted amount of days. Reasons for this vary, were there business processes that you did not include in the initial scope that came up later down the line? Maybe the project team were swapped out mid-assignment, or there was a festive break. Setbacks like these may make everyone take a little longer to get back up to speed and could delay the go-live date.
- Other costs not directly associated, such as the cost of operational downtime. Just for perspective, consider that the average automotive manufacturer loses $22,000 per minute of downtime.
- Once go-live is complete, and you are satisfied that the implementation was a success, it’s not over! An ERP system, as with most other business systems, needs to be optimised every now and then.
- You can opt to work alone and without a consultant for support. Of course, this is not something we would recommend. Although not hiring external support saves on budget, there are many benefits to hiring a consultant.
ERP has the potential to be miss-sold in the sense that it will not ‘fix’ a company, make you more profitable, guarantee success or automatically adapt to changing market or business conditions. Of course, ERP can contribute to all those things. However, several other elements contribute to making the implementation a victory, including:
- Identify what your problems are and set an objective to overcome them
- A capable project team
- Demo the products before purchasing them; otherwise, how do you know the system will suit the business? If something does not fit, is there a workaround or integration?
The system you opted for might not fit with your business as you expected. We understand that you don’t have all the knowledge to match the perfect vendor and software to your businesses actual needs. A shortfall in service from the vendor may mean that all bases are not covered. Does the system need to be scalable? Are there app integrations required, and, are they compatible with the software you purchased?
At Gradient, we follow steps to ensure you scope out the differences between where you want your business to be, where it is now, and how you are going to get there. The process aims not to leave anything unturned, avoiding an incompatibility scenario.
Concerns on Time
The average ERP implementation time varies, most statistics out there quote 2-5 years. This timeframe doesn’t take the specification and selection of the system into consideration. Remember, ERP is not an off the shelf product and time must be spent in the beginning scoping out what you need and why – before choosing the vendor and software. However, Rome was not built in a day.
Integrating a new business system is not for the faint-hearted. Training takes time, and it can get tedious for users who already have a job to do. Ensure you cover training needs before the system is implemented and live. Motivating your employees to use the system by providing adequate training will save on time later down the line. If your staff are confident using the system, they are more likely to spot errors or fixes that need putting in place. Again, proving resourceful in the future.
Fear of Data Migration
Enterprises are increasingly reliant on information that is secure and accurate. When implementing an ERP system, the data migration process is critical to project success – historical company data needs to be housed in the new integrated system. And so, the data must be extracted, transferred and loaded securely. Migrating historical data could bring a plethora of challenges your way, but you can overcome them by:
- Preparing the data before moving For the excess time and cost, you don’t want to be migrating historical data that is of no use.
- Preparing the company and your Your stakeholders, more often than not, will be all individuals working within the business. Ensure you have a well thought out strategy in place and that people are aware of what it is!
- Allow time for data migration. This step of an ERP implementation is overlooked as merely an admin task, instead of an integral part of the project. A worthwhile outcome hinges on your decision to prioritise the data move.
Don’t Be Afraid!
There are reasons for and against your decision on whether or not ERP is the right direction for your company. It would be best if you didn’t always believe what you hear as some may have misconceptions of the journey. Gradient’s consultants can help your company prepare for every possibility, and if everything doesn’t go to plan, they won’t leave you in the dark!