Plan your ERP implementation as you would the building of your dream home

Ensuring smooth enterprise resource planning can be compared to choosing a house. You can get an estate agent to find you a place you can make do with, and you move in a week later. Or you can use an architect to design you the home you`ve always dreamed of, have it built exactly to your specifications and make it the haven you`ll always want to come home to.

It`s your choice. Chances are you`ll be happier having played a role in the planning and building of your home than if you simply moved in to a place you`d hastily found.

It`s a simple analogy, and it`s ideal as a comparison for effective enterprise resource planning (ERP) implementation, says Stephen Howe, divisional manager of Comparex Africa`s Tetra Division.

"All too often manufacturers find that their ERP systems don`t meet their expectations, and failed ERP implementations are still common. And yet what most companies want out of ERP is not unreasonable: they want to have made a good investment in an effective solution that meets their needs," says Howe.

The best way to ensure this is achieved is to understand why such failures occur and how they can be avoided.

The main purpose of an ERP system is to provide support and automation to the business process. Just as there are innumerable business models that span today`s business world, so are there ERP products available to serve them. The home metaphor is applicable - like a dream home is a statement about its owner`s lifestyle, a well designed ERP system is highly reflective of the business process in place at the company.

Most companies who are buying ERP systems don`t understand ERP to the degree they should, and as a result end up investing in the package that least meets their needs. The key to making an effective purchase - both of a home and an ERP system - is to know what your needs are and what you want: have a solid process.

Successful ERP implementations share three basic qualities: a good match, thorough analysis and implementation of quality plans.

It`s important to be realistic - there will always be gaps between the system and the business process. But a well-matched ERP has no major process gaps and few minor ones.

Think of the home analogy: you can buy a house in three ways - you can buy a house after viewing it on a show day; you can buy it on the builder`s specifications; or you can start at the drawing board and custom design a home that meets your precise requirements.

Howe believes the way the solution matches the business process normally determines the satisfaction level of the client. Buying ERP `on show` is the equivalent of buying a readymade software package - there`s a slight chance it might be fine, but the likelihood is that it won`t match the company`s needs.

You can buy it `off builder`s spec` and be able to add modifications here and there so its systems are more aligned with company processes. But this approach can become very expensive if a lot of adjustments are needed or it`s poorly managed.

Or you can call in an architect and design your home from scratch, customising your system around your business processes. For this to work it`s imperative you know what you`re doing and are willing to invest in the necessary resources. But this route is no guaranteed success - you could end up spending a lot of money without seeing quality results.

Of the three options there`s no one sure fire way that guarantees success for everyone. The best way to determine which option best matches your company`s needs is to conduct a through business analysis. Successful companies can spend up to 10% of the project budget doing this. A thorough analysis should result in a documented list of the business processes at work within your company, providing a basic tool with which to measure vendor capability.

Just as the building of a house happens in carefully mapped phases, there needs to be a plan in place that monitors the quality objectives and timelines of your ERP implementation. A thorough system implementation will transfer knowledge to the system users reliably, timeously and effectively. When the project is complete the users of the new system must be capable of using the tools it provides.

"The majority of failed systems are the result of poor quality implementation," says Howe. "It is crucial to remember that ERP is simply a tool. If the users of the tool don`t know how to use it properly, the tool is rendered completely useless."

* Howe emphasises the importance of involvement from the highest level of the organisation. He believes, "a high level of top management involvement is essential, and serves to effectively influence participation in the process at all levels".
* Another important ingredient is analysis - scrutinise the current process to determine strengths and weaknesses and from there map out strategies to improve wherever necessary. Record all results as part of the mapping procedure.
* Make sure you choose the right `architect` for your dream home - and make sure it`s for the right reasons. Don`t buy a system based on demonstrations that emphasise the bells and whistles of the product - rather gauge whether the vendor demonstrates the product effectively, has sufficient depth of knowledge and resources in the required core competencies, exhibits industry specific knowledge, and carries out thorough analysis prior to issuing a quotation.
* Know all the weaknesses of your current system and business processes. If you introduce a new system and feed it inaccurate inventory, no amount of fancy software can help you.
* Build a strong, reliable project team and be sure to empower them with the tools and resources they require to get their jobs done well.
* Appoint a project leader to champion the implementation and to ensure task delivery and communication to support the process.
* Document all process changes resulting from the implementation to map and measure compliancy.

Treat your ERP implementation as you would the planning, designing and building of your dream home. It`s a wise investment that, if carefully thought through and properly carried out, will serve you long into the future.