Understanding ERP Success: What does it Really Mean?

Most organizations don’t know how to define success when it comes to their ERP implementation. For some, it means their operations are incrementally better off now than before the new ERP system. For others, it means they didn’t get fired in the process. Sometimes, defining the project as a success is a self-preservation tactic since no one wants to admit to overseeing a failure.

Why is the bar set so low?

Perhaps the most common reason for this disconnect is that so many organizations expect so little out of their ERP projects. They are relieved that they didn’t lose their jobs or destroy the company’s operations – never mind the fact that they are leaving millions of dollars of lost benefits on the table. ERP implementations have become so complex, difficult and fraught with peril that “not failing” has become the yardstick of success for most organizations. This mentality is costing the average organization millions of dollars per year.

How can you maximize business benefits?

There are a number of things organizations can do to avoid expensive challenges and disconnects. First of all, start with a measurable business case that is used to manage business benefits – not just thrown on the shelf after justifying the project. The business case should be very tangible, specific, realistic and actionable to ensure that various stakeholders in the organization can be held accountable for achieving those results.

Second, ensure that you engage in business process reengineering, rather than the “paving the cowpaths” approach that most organizations take. This means ensuring that you have adequate time built into your project plan to identify and implement significant operational improvements. Most ERP consultants and ERP vendors severely underestimate or completely exclude this task, so it is important that you take their proposed implementation plans with a pinch of salt.

Finally, ensure that you have a solid organizational change management strategy in place. If you had to pick one single strategy and tactic to optimize business benefits, it should be change management. Without employee acceptance and adoption of new business processes and software, the new ERP system is just an unused system. Only organizational change will ensure that your implementation delivers the business benefits your organization expects.

At the end of the day, everyone wants their ERP implementation to be successful, but they typically lack the experience and skill set to make their project a true success. Most industry incumbents have a myopic and flawed view of how ERP projects should look, so be sure your implementation partner has a holistic approach.