ERP implementations are a significant undertaking for organizations in terms of time and resources. All too often, procurement organizations are not prepared for these large-scale changes -- which can lead to failure. Lack of adequate planning and budgeting, failure to properly engage key business functions, limited support from senior management, and a lack of appreciation for the change impact are among some of the top issues that impede a successful implementation. These mistakes often haunt the P2P process even after project completion, forcing further investment in the technology. With so many potential dangers lurking in the shadows, I thought I might share some of my learnings so CPOs can arm themselves when their organizations decide to embark on the ERP journey. Here are some guidelines for a successful P2P ERP Implementation:
- Make sure the dog is wagging the tail
All too often, companies forget that the purpose of an ERP implementation is to support the long-term strategy of the business. Implementations are highly tactical and organization's rightly value individuals who can drive toward execution. However, decisions made during an implementation can have a far-reaching strategic impact. Therefore, it is important to align the decision makers in the process with the business leaders so that your long-term procurement strategy drives technology and process decisions, not the other way around. In addition, key stakeholders in the P2P process should be committed resources during the system implementation to ensure that they are fully engaged in the functional design phase.
Leave no stone unturned
Effective planning and contingency evaluation are paramount to a successful program. ERP implementations are riddled with potential hazards. However, putting in place the right people and processes can help any organization navigate the ERP gauntlet. Below are a few basic guidelines to follow in the planning process:
- Develop a realistic project plan - An effective project plan will summarize the timeline for all critical events and include associated dependencies and resources assigned to them. Engaging all key stakeholders while developing the plan will ensure that cross-functional efforts are properly coordinated and that critical players are well informed of timing and resource requirements. Organization of tasks and key dependencies assures that project risks can be identified and addressed as early as possible.
- Get the right project manager - There is no substitute for good leadership. An effective project manager will ensure that all key stakeholders are engaged in the requirements gathering and decision-making processes. Individuals with the proper project management capabilities may be found in either the business or the technology group. In addition to managing the project timeline, resources and budget, the individual needs a nuanced understanding and appreciation of both technology and business process issues.
- Understand and assess cost vs. benefit - The benefits of an ERP system are seemingly endless depending on the configuration, customization, and supporting technology employed. However, it is important to delineate between what the technology is capable of and what is needed at your organization. Over-promising on future functionalities is an easy mistake for a project team to make. Customizing the technology to provide specific functionalities takes additional time and resources. An optimal solution based on the costs and benefits should be decided among the key stakeholders. A rigorous analysis of the estimated costs should be conducted prior to the start of the project. Costs for not only implementing the technology should be included in the budget but also for project management, documentation of requirements, development of reports, all levels of testing, end-user training, cut-over activities, and post-"Go Live" support. Not accounting for these costs upfront often times leads to budget over-runs or scaling back on training and support.
Align your organization
Successful ERP implementations are optimized when the entire P2P organization is aligned behind common goals and employees are strategically maximized based on capabilities.
- Understand your organizational readiness - An organizational readiness assessment of how willing stakeholder groups at all levels are to accept upcoming changes should be used to develop a formal change management program. Stakeholder groups can then be individually targeted with specific messages and activities to ensure that they understand the changes being implemented, see the value the changes will provide them and/or the organization, and feel their feedback is heard
- Ensure senior level buy-in - Senior management commitment to the project is critical to its success. Key executives must understand the scope of the project and the critical issues being addressed for the procurement organization. The project sponsor must be effective in establishing and maintaining their support by continually communicating the value of the project and by bringing key executives into the decision-making process. Visible support from the leadership team during implementation is critical to gaining buy-in at all levels. In addition, all individuals within senior management should take ownership of communication of key milestones to their constituents.
- Put the right people in the right place - The roles and associated responsibilities required must be assigned to individuals with the appropriate skill set and knowledge base to properly follow the process and use the technology. The information and skills needed to complete tasks in an automated process may not reside with the individuals who are responsible for these previously manual tasks.
Implementation is only the beginning!!
There is an undeniable feeling of relief when an organization successfully completes an ERP implementation. It's a long, arduous process and congratulations are in order upon completion. However, after all the backslapping and high-fiving comes to an end, take a deep breath - because there is still more work to be done to ensure a successful transition.
- Train for Success - It is critical for project plans to include time and resources for training content development and delivery. The development and delivery of training content should be a collaborative effort between the business functions and technology.
- Account for Changes - Should problems arise with either the technology or the business process, resources will be needed for issue resolution. The transition plan should also include where responsibility for issue resolution will reside after the initial transition period. Planning for the transition from the start is the best way to ensure the proper individuals are able to see the project through to the end.
-- Timothy Yoo and Josh Peacher, Archstone Consulting