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ERP Implementation Versus Effective and Efficient ERP Implementation

ERP Implementation Versus Effective and Efficient ERP ImplementationWhat we do know is that ERP implementation methodologies are not created equal. In fact, ERP vendors and implementers promote this notion and truth. Additionally, ERP researchers have suggested and studied this truth. We also know this in part by the way in which ERP vendors and implementors describe, sell, promote, advertise, and even brand ERP implementation methodology. During most ERP selection sales presentations, methodology is presented as a differentiator as compared to the competition. But, there is also a big difference between ERP implementation versus effective and efficient ERP implementation. Are some methodologies better than others? Absolutely. But why and how?

It Would Stand to Reason….

Whether one performs an internet search of “ERP challenges and failures”, examines the demand for “expert witness” services, explores anecdotal feedback, peruses U.S. Securities and Exchange Commission filings, reads news and journal articles, questions references and customer feedback, and/or examines evidence-based inquiry or formal research, it would appear that ERP organizational change can be a significant endeavor with many obstacles and challenges.  Being on-time,  on-budget, meeting all functionality, and/or meeting all the stakeholder’s perceptions and definition of success is an ERP organizational change challenge.

Research, case study, and anecdotal evidence suggest that many ERP organizational change efforts are “successful”, but this does not imply that 1) success was realized with no challenges or 2) that the success was effective and efficient.  Of course, it is possible that ERP organizational change efforts could possibly realize immediate success (i.e. on-time, on-budget, meeting expected functionality, and meeting stakeholders’ perception of success). Many are ultimately successful after a great deal of time, money, and effort varying in significant degrees. Some ERP organizational change efforts struggle from the onset. And, some fail entirely.

Just as there is a wide range of success or failure, there is also a wide range of effective and efficient implementation methodology. Can all implementation methodologies be “proven” and can they all be created equal?  Highly unlikely. The answer in part depends on how “proven” methodologies are defined and what it means statistically. That is, does “proven” mean 100% successful in terms of on-time, on-budget, meeting expected functionality, and meeting stakeholder’s perception of success?

It would stand to reason, that IF all methodologies were “provenand they were all also created equal, then evidence suggesting otherwise (i.e. challenges and failures as noted above) would most likely be false.

Not to simplify too much but there is some reasoning for thought and reflection. That is, let’s assume for a minute that all ERP implementation methodologies are “proven“, “proprietary“, “leading“, and “world-class. Why? Because during an ERP selection process, this is precisely what you will hear. This is precisely what the sales cycle will lead you to believe. Have you ever heard a sales presentation where the ERP vendor, reseller, or implementor says that their ERP implementation methodology is “Well, it’s OK” or “It isn’t too bad” or “We have success but definitely run into challenges” or “62% of our projects are on-time, on-budget, meet all requirements, and all stakeholders agree project was a success? Doubtful.

  • IF by “proven” implies and is defined as successful and being on-time, on-budget, meeting all requirements, and stakeholders would all agree that the endeavor has been successful.

           AND

  • IF all “proven” methodologies are in fact created equal (in the sense that they are all successful in terms of  on-time, on-budget, meeting all requirements, and all stakeholders would all agree that endeavor was successful.)
  • THEN, either all/any evidence to the contrary is wrong OR it isn’t accurate to state that all methodologies are “proven” AND that they are created equal (i.e. the same).

That is IF #1 AND #2 are true, then all ERP organizational change efforts and their corresponding implementation methodologies would be successful (in the sense that on-time, on-budget, meeting all requirements, and all stakeholders would all agree that the endeavor was successful).  If during an ERP selection process, the organization accepts the position of any given ERP vendor as having a “proven” methodology and the organization also takes the position and assumes that all methodologies are created equal, then the many statements such as these would be false:

  • “To improve responses to changes in markets and products, manufacturers are increasingly adopting ERP systems. However, anecdotal accounts indicate that the realization of ERP’s potential benefits is rare.” (Stratman & Roth, 2018)
  • “The implementation of such systems is a complex process, and the failure rate remains very high.” (Hadi & EL-Sobky, 2015)
  • “…due to high rate of difficulties and failures in implementing the ERP systems, as explained in the review of literature, it can cause some disorders (Jafari, Osman, Yusuf, & Tang, 2006).” (Noudoostbeni, Jenatabadi, Ismail, and Yasin, 2018)
  • “Extant literature suggests that few companies have fully appropriated the expected benefits from their ERP systems…..However, spectacular ERP failures are frequent.” (Shao, Feng, and Hu, 2017)
  • “If case studies are any indication of the outcomes in ERP investment, insights already suggest that many attempts have not delivered the expected benefits, have failed completely, or will have high probability of failure.” (Bajwa, Garcia, Mooney, 2004)
An Illustration: Methodology for Implementation Services

For example, in a recent ERP selection project, ERP vendors or their certified implementation partners were asked for their methodology for implementation services. Note, this short article is not attempting to judge methodologies nor to state agreement nor disagreement with any methodology.  This article is simply demonstrating how 1) methodology is positioned during the selection and sales cycle, 2)  implementation methodologies (and, in fact, their implementation context) are not all the same, and 3) ultimately to suggest that there are perhaps common denominators to look for in successful ERP implementation methodology. Implementation methodologies not only vary (which is apparent by further reviewing the details of project plans during the selection process) but are also considered differentiators in the way the methodologies are described during the ERP sales cycle.

Responses from an actual ERP selection process included:

  • Vendor #1: “..implementation methodology ensures immediate customer satisfaction while getting customers to go-live quickly. With excellent planning throughout the sales cycle,…the implementation approach offers customers an efficient and rapid deployment, ensuring ROI is realized rapidly….<ERP vendor> has established industry-based leading practices, demonstrated during the sales process…Leading practices throughout the sales process also drive our training courses and how customers are supported….training program builds the knowledge and educational foundation of your <ERP vendor> administrator ensuring customers have the internal expertise and resources for problem-solving…to ensure customers are completely satisfied and implementation timelines remain on-track during the implementation lifecycle.” NOTE: This vendor has a branded their implementation methodology.

 

  • Vendor #2: “Our proven implementation methodology is used globally and provides our customers with a very flexible process to meet the needs of many different types and scales of projects. This global methodology has been proven successful….we can deliver integrated solutions quickly, efficiently, and without significant disruptions to business operations….This approach offers the structure, controls, and risk mitigation needed to successfully achieve the objectives of this project….This proven methodology provides a framework that leads to a well-tested system with defined processes, confident users, and good data that enables your organization to successfully Go-Live and operate the business…after each phase, we employ qualification gates to maintain the integrity of the implementation”.

 

  • Vendor #3: “Staffed with direct employees around the globe who are properly trained and equipped with world-class implementation tools…follows our proven signature methodology designed specifically …The Methodology is broken into five stages: Prepare, Plan, Design, Validate, and Deploy. Each stage includes a series of segments that are filled with a set of inputs, tools, techniques, and deliverables all building upon one another to move to the next stage….methodology goes beyond implementation to include ongoing training, support and best practices”.

 

  • Vendor #4: “…a select community of strategic partners with distinct qualifications…. provide a complete <vendor removed> services delivery model for our customers… Delivery partners can also bring packaged solutions and service offerings that complement and integrate with……core solutions to meet the ever-changing needs of our customers….our proprietary implementation methodology….will provide a collaborative, proven framework…Throughout the implementation, there will be a gradual transfer of knowledge and ownership from <vendor removed> consultants to the…project team until the members of the project team become the drivers and champions of the new system and business processes…..The foundation of our implementation strategy is…. a customer-first approach that directs how we design our projects for each client. We believe this approach is wholly aligned with…..expectations for the services side of this project so that you may experience high value from your business software quickly.
Why Do Vendors and Implementers Promote and Even Brand Methodology?

Vendors and implementers promote and even brand methodology because implementation methodology matters. Methodology approach and the execution against that approach are crucial.  During the ERP selection process, an inquiry into the tactical project plan details is beneficial to the organization. Research suggests that not only are there methodology process common denominators in successful organizational change but that implementation methodology grounded in principle and evidence-based practice is most effective and efficient.

Effective and Efficient Implementation Methodology

There are many components to consider in terms of advocating for effective and efficient implementation methodology. In fact, full articles and books are written on this topic. In general, effective and efficient implementation methodology would include, from the highest level, effective and efficient management of the people, processes, and technology. For example, key organizational change influences such as sound project management, effective leadership, a supportive corporate culture, adequate change control, appropriate scope management, proper technology management, and effective business process implementation are just a few crucial influences that an effective and efficient methodology needs to consider.

The effective and efficient implementation methodology is not only conceptually aware of key influences but also demonstrates tactical activity in which to manage these key conceptual influences”.  Dr. Jack G. Nestell

 

A Key Pillar In Any Implementation Methodology: Organizational Learning and Development

Whether the “people”, “processes”, or “technology” component of the triad: a significant part of a successful ERP organizational change endeavor could be distilled down into education, learning, and development. Therefore, for the implementation methodology to be effective, the organization in general and the individual stakeholders specifically need to develop mastery. Individuals must acquire component skills, practice integrating those skills, and also know when and how to apply new knowledge (Schraw & McCrudden, 2006). Providing organizations with opportunities for learning (and gap analysis) that utilizes and illustrates models of evaluation, performance analysis, and project management design that will promote communication, effective learning, and identification of issues are crucial methodology features. The effective and efficient implementation methodology would certainly include provisions for applying appropriate modeling, demonstration, practice, and feedback.

Practical Pointers

Organizations aren’t typically ERP organizational change experts. What can organizations do to ensure the most appropriate methodology?  Organizations apply effective and efficient ERP implementation models during an ERP organizational change project in part through principle and evidence-based practice. The methodology approach is a crucial influence impacting success. How do organizations apply effective and efficient ERP implementation models during an ERP organizational change? Some practical advice:

  • Ask the ERP sales team to include their Learning & Development (L&D) expert during the sales cycle or to explain their integrated systems approach to human performance and learning. No one ever argues the value of organizational learning during an ERP organizational change endeavor. And, effective and efficient organizational and individual learning is crucial. However, this doesn’t necessarily mean that L&D based principles are designed into or inherent in the methodology. L&D matters.
  • Consider utilizing vendor-neutral change management support, learning and development (L&D) professional, and/or organizational change and culture professional, and/or certified PM expert to assist in analyzing the implementation methodology, selection process, and project plan details.
  • Specifically, ask about the Implementation Methodology during the sales and selection process. Dig into the details. Details matter.
  • Ask what “proven” means. Literally, request a written statement of their definition of “proven”.
  • Ask for “proven” statistics and see what they say. Does the organization get statistics or “thrown a bone”?
  • Ask for an array of references. Good and not-so-good projects. Observe and note how the ERP vendor sales cycle responds to this request. Specifically, ask to speak to an organization that was considered to be more of a challenge.
  • Do your homework. Investigate for yourself based on as objective evidence as possible what you would conclude about any ERP methodology. Performs an internet search of “ERP challenges and failures for <Insert vendor here>”, examine the demand for “expert witness” services, explores anecdotal feedback (find your own references for <insert vendor here>, peruses U.S. Securities and Exchange Commission filings, read news and journal articles, question provided references thoroughly, and/or examines evidence-based inquiry or formal research.
  • Make sure that the sales cycle is honest. If they are “100% proven”, ask lots of questions. The fact that ERP organizational change can be challenging should not be a surprise or a deterrent for any organization. But what is important is being honest about the realities and expectations of an ERP organizational change effort. A methodology that is honest in this truth will have mechanisms in which to address this truth. Honest and trusted partners matter.
The Take-A-Way

ERP organizational change can be a significant challenge, but an intentional and disciplined approach to understanding the methodology can improve the success of implementation.

Methodologies need to account for unique organizations and their unique contexts. Methodologies also need to account for the many tangible and intangible influences including internal, and external, stakeholders’ knowledge, experience,  and motivations. Research suggests recommended steps for success, which include ensuring that all influences critical to success are known and effectively implemented. Understanding methodology is important because 1) not all methodologies are created equal but yet all are “proven”, “leading”, and “world-class” and 2) a significant influence and objective in ERP implementation methodology is organizational and individual learning. This implies that the application of effective and efficient organizational, and individual, learning is an organizational advantage.

Most importantly, are there influences that may better advocate for organizational success through the most effective and efficient implementation methodologies? Perhaps, there are common denominators to look for in successful ERP implementation and methodology? More to come…

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References:

Bajwa, Garcia & Mooney (2004) An Integrative Framework for the Assimilation of Enterprise Resource Planning Systems: Phases, Antecedents, and Outcomes, Journal of Computer Information Systems, 44:3, 81-90

El Hadi & El-Sobky, H. (2015). A Proposed Framework for Knowledge Transfer in ERP Implementation Projects. Compunet (The Egyptian Information Journal)314(3257), 1-8

Noudoostbeni, Jenatabadi, Ismail, and Yasin (2018). “An Effective End-User Knowledge Concern Training Method in Enterprise Resource Planning (ERP) Based on Critical Factors (CFs) in Malaysian SMEs.”


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