According to a number of studies; up to 80% of businesses deem their ERP initiatives as failing to meet objectives... What must business management consider prior to taking the leap. How do mitigate the risk of being one of that 80%. If you represent a business an have questions please use the contact form on the changespecialist.org site and I will respond.

1. ERP: Why, What, Which, How
Barry M. Cole, Interim Change and Transformation Management
cxo@gate.net

2. Do We Have Answers
So we are thinking about ERP. And, we understand
that it will alter the way we do business for the next
10 to 20 years. So…
1. Why are thinking about ERP?
2. What does ERP mean?
a. To the business?
b. To the People?
c. To our customers?
3. Which ERP framework?
4. How do we start?

3. Why Are We Thinking ERP?
Successfully implementing Enterprise Resource Planning
requires understanding “WHY” at an organizational level.
1. Is our senior technology manager saying: “the systems are twenty
years old and new technology will put us where we need to be”?
2. Are the ERP vendors saying: “out of the box; we have all the bells
and whistles to make your life wonderful… And, here is our TCO
white paper”?
3. Are employees saying: “it looks old… The screens aren’t easy”?
4. Or, is the business asking: “How can we more agile, increase
innovation, and have more vitality in the marketplace”?
5. All of the above? None of the Above?

4. What ERP Means
A key to successfully implementing Enterprise Resource
Planning is understanding that it not about technology. It is
about managing Fundamental Change effecting:
1. Business Processes (running the business)
2. Financial and Regulatory Constraints
3. People: Producers and Users of Company Information
4. External Relationships: Customers, Trading Partners, Financial
Partners, Suppliers, Investors…

5. Why This Discussion Is Important
Up to 80% all ERP implementations are judged to have failed to
fully meet expectations. How would the below impact our business?
 Took longer than expected
 Duration exceeded planned timelines
 Implementation exceeded planned budget
 Increase in total implementation costs as a percentage of total revenues
 Increases in expected implementation costs
 Organizational resistance and learning curves
 Major operational disruptions with go-live
Only 68% of executives and 61% of employees are at least somewhat satisfied with their implemented ERP solution (Panorama study, 2009).

6. Selection Criteria: Which
Analyze the magnitude of the change?
1. What should our operating environment look like when this
new ERP is in place?
2. What will our organization look like?
3. How will the constraints inherent in each of the considered
ERP’s influence the “how” of questions 1 and 2 above.
4. Can the new process, execution, and technology skills
demanded by each considered ERP be developed or if they
must be recruited; can they be easily found?

7. Selection Criteria: Which
Does the ERP vendor understand my sector and business
model?
1. Financials including valuations
2. Product Management life-cycle
3. Supply Chain
4. Production Modes
5. Servicing and Customer Support Models
6. Fulfillment
Note: ERP platform modules are often highly configurable… These same questions should be asked
when selecting an implementation partner for the chosen platform.
The perfect platform with the wrong partner adds very major risks to a successful implementation.

8. Selection Criteria: Which
Does ERP platform X meet our unique company needs?
1. Multi-company/Multi-national operations
2. Volatile marketplace
3. Varying order and production handling modes
4. Regulatory compliance and reporting
5. Product life-cycle management
6. Sales and customer communications and support
7. Financial reporting agility (internal & external)

9. ERP Project Management
Always remember that ERP is about managing the business.
1. ERP as fundamental enterprise change requires continuing buy-in and
involvement of the entire executive team. Throughout the entire process;
decision makers must be, involved, available, and willing to make decisions.
2. Viewing an ERP as implementation of technology is a major project risk!
3. Business complexity and volatility will significantly impact the
implementation budget and continuing TCM (total cost of maintenance).
a) How able are we to look out to a 18 or 24 month horizon?
b) How able are we to “freeze” our business model for an extended period?
c) Do we understand the effects of interim business changes on an ERP
implementation? (Platform vendors will often make “out-of-the box” product
representations that are generally true under only the simplest business models).

10. KEY DECISION: ERP Project Manager
ERP project management is about movement toward the business “to-be”.
The LEADER of the ERP project should have:
1. In-depth conceptual knowledge of each operating area of the business to be
effected by the new ERP value stream. Knowledge of process modeling, best
practices, and financials is very helpful. (The implementation partner should
bring real sector specific to the project)
2. Strong conceptual knowledge (not expertise) of technology infrastructure and
programming needed to guide technology team. (in more larger and complex
implementations, a separate project manager for the IT sub-project may be appropriate)
3. Significant matrix management experience and relationship skills. Strong oral,
written, and presentation skills. Able to communicate effectively with the
executive suite, process management, the financial team, or the plant floor.
Risk Consideration: (The right project manager positioned incorrectly will add significant risk - Choose someone capable of
acting as a trusted advisor to the President ) Organizational dynamics must be considered since this is ENTERPRISE
level business change. This role should be positioned as a part of senior management. Ideally position the ERP Project
Manager as a direct or dotted line report to the President.

11. Suggested ERP Startup Steps
1. Name an qualified internal project manager to coordinate and
guide subsequent steps.
2. Create detailed gap analysis of as-is and the defined to-be.
A. Identify and resolve intermediate steps.
B. Identify and begin staffing process for new functional areas.
3. Develop a project charter, scope document, and preliminary
budget.
4. Identify and negotiate the ERP platform and implementation
partner.
5. Approve project planned budget. ((3E +2W +1B )/6)
6. Project kickoff and core team commissioning.
7. Formal project plan.

12. Can the Organization meet the
Continuing Time Commitment?
Resource Schedule * Role
Senior Management (executive level) Team: Define and drive organization support of the ERP
Steering 5% Charter and implementation. Address identified road blocks. Approve all changes to project scope
Committee Monthly Meetings and budget impacts.
Manages day to day activities. Guides the overall project functional & technical decision making
Internal Project 100% and execution. Manages project performance of the consulting teams and their interaction with the
Manager core project team. Directs change control and risk management processes.
5% - 40% Functional decision makers and process owners: Responsible for developing application
Core Team heaviest at knowledge, working with the implementation partner to transfer functional knowledge, develop the
milestones to-be design, proof the design, and lead the implementation within their functional area.
Application development and infrastructure support: Support implementation partner in executing
IT Team 20 % to 90% specifications, assisting early users, testing, data migration and loads, and develops modifications
and reporting requirements. Increasing need at phase ends, during testing, and near 100% at go-
live.
10% - 30% Key end users with responsibility and operational knowledge within covered functions:
Key User heaviest at Responsible for input during the design and testing. Gain knowledge required for use of the system
Community milestones and transmittal to process area peers.
Represents the Executive Team to the project and provides continuing oversight. Assists the
Project 5% -10% internal project manager as required. Manages organizational conflicts requiring executive
Sponsor resolution.
* This is time required above existing demands and represents a risk to be resolved.

13. Discussion