Why is Software selection and its implementation, a big challenge at both Decision and Execution level?
The easiest thing which an organization does after starting the business is to select the accounting software. Because at that point of time, they consider the software as a medium of recording transactions only.
The most difficult situation which an organization passes through is selecting the right software and its right implementation after it has reached to a particular level, and continuing with the first software becomes a risky affair.
Why selecting the first software is always easy and why it becomes a very long process to select the 2nd software. Because they know their requirements by now, they realize how complex the business processes have become, they realize the importance of data and its intelligence, they understand that only with the support of a robust system they can reach to the next level.
It has been observed that normally an organization ends up spending 2-3 years before they move to the new system due to decision delays, long process of selection of right software and right vendor, slow implementation and change management.
As the organizations evolve, the first thing which they should ask is –
Clarity – Do they have the sufficient clarity about their business?
Scenario Analysis – Does their system allow them to perform different scenario analysis?
Free Flow with Control – Does their system allow full mapping of processes and activities leading to free flow of transactions and data with requisite control, checks and matrix?
Running a business keeps getting tougher as you reach to higher levels. If you are not prepared well enough, any wrong move may turn into a major hurdle or negative loop from which it will be difficult to come out or the company end up spending too much time and resources to recover.
Sometimes organizations jump to ERP “too early”. Instead of ERP they can achieve better efficiency, control and security by adding customizable plug-ins in their existing software. Remember
A small organization may need very basic software
A medium size organization may need integrated software(s) with customization
Difficulties face Difficulties. The difficulties faced being in the current status vs. the difficulties in the decision making process. “If you really want to embrace Change, change your decision making process.”
Why does an organization find it difficult to move from current status to changed status?
Difficulties are many and appears at various stages –
Finding the Right Software
Selecting the right vendor to implement
Negotiating for the right pricing
Achieving a successful implementation where the team understands it well and the system fulfills all the requirements of the company
The company may not have the right team to run the implemented software, which may lead to increase in the cost rather deriving substantial benefits from the software.
With no prior knowledge or experience of selecting the right ERP they enter into this complex market of ERP, CRM, Customizations, Technical, Related Add-ons and their integration. They hardly realize how crucial role the existing data will play in building the system and they hardly know at that time whether their data is clean or structured. They start inviting vendors of different software for Demo. More confusion starts piling up on the table. With the existing business functions taking away the major time, the exercise of searching for the right software and the right vendor never gets comprehensive. And the demo becomes a product as shown by the manipulative or inexperienced vendor. The decision is being taken with half clarity, price gets fixed based on the liking of a team or a product, which may not reflect the real intrinsic value of the software.
If the company has to take one major decision than let it be selecting the right software (ERP+CRM) to meet and match all their requirements.
There is a Full Evaluation Cycle to make ‘Decision Making Process’ Easy
ERP Implementation is a big decision for any size of the organization at any point in time as it requires multiple resources, not only money but also time and human resources. It brings in a major shift – skills up-gradation, big data, automation, real-time reports, security, flow, etc. It brings in a structure where you have to follow a process without fail and gradually make team’s approach a professional one. But at the same time, one needs to be realistic about the fact that ERP comes with huge costs.
Some organizations go “too slow”, due to which the cost just shoots up. Many decides to go “too fast” and they let everything crash or under-utilized as they complete the implementation without proper planning, data correction, testing, training etc.
Even Amazon size company, when they acquire large companies in other countries, they have to go through a major updation / upgradation and this process may be 6 months – 1 year long. That is why it is important from the very beginning i.e. the start-up time, to ask ‘what if we upscale’, to fulfill future requirements and link the below accordingly.
Once the companies get the clarity on costs, their business requirements and business benefits, the decision making process becomes easy.
It is important to share the software industry growth over the years and make all the progressive companies to rethink on their software decision as the advanced technology adapted by the best companies may make it difficult for the late entrants to reap the early stage benefits.
What are the Key Preparations Every organization should give importance to?
Before or After making the decision to go for a full fledged ERP + CRM complete solution, the organization should start preparing in advance the following:
A Formal Full Length Contract: Finalizing a Contract becomes a real challenge, and, in most cases, the company ends up signing the contract provided by the Vendor. This may turn out to be the biggest mistake which a company ends up committing after making the Best decision to move to an advanced system. No more thereafter the project is theirs as it turns into the vendor’s project. (Anyone interested in knowing the key points and clauses for their quick understanding to make a comprehensive contract can fill up the Contact Us form and we will share the full PDF file)
Cost Control of ERP projects: In 80% of the cases it OVERSHOOT. So, how do you control the cost of the software about which you have just 20% knowledge or clarity and you don’t know beforehand how it will be able to match your requirements. The top 5 Gaps emerge –
Team’s understanding of the software
Team’s inability to share the business requirement
Vendor’s not able to map company’s requirement
Vendor’s unaware about software’s full potential and all the features
Software’s limitations in order to fulfill company’s requirements
The organization should ask their key personnel to prepare a basic document covering their functions and business, in general, requirement and the same should be mapped by the vendor with the software features. This mapped document should become part of the proposal.
3. Availability of key personnel’s time: Is it easy to arrange the resources on time and are they able to devote enough time to contribute for making a robust system. And above all Do they really intend to?
4. Availability of Right Team for running the new advanced system effectively: The challenge gets posed due to low skillset of existing team. First the company faces their resistance and thereafter they face resistance in terms of available skillset. Proper skillset matching and Upgrade is essential
What are the Benefits of Implementing it rightly and timely?
You can list down the functional, technical and commercial benefits. But it is important to highlight over here the opportunity cost benefit.
Cost may shoot higher for a proper implementation, but the planned and proper implementation may open up opportunities for the company much earlier. For e.g. A million per month benefit for 5 months faster execution equates to AED 5 million benefit, and to get this 5 months’ faster execution you may have to spend AED 500,000 extra.
Always remember that if you are buying a cheap product, you have to be rich. Because you will spend your money initially on a cheap product but you will end up buying the best one at a later stage. The same applies for selecting the right product. It should not be the case that the product which you choose or the vendor you choose may result in shifting to a better product or a better vendor after 1-2 years. 60% of ERP implementations are unsuccessful. The opportunity cost of your project is remarkably high. Do a proper cost-benefits analysis. Spend More to Gain More.
What is One thing you should do before you start Implementing an Advanced System? (INTERNALLY)
If you really want to align the intention of the team with the business requirement, for the purpose of software implementation, then set up a Rewards scheme for a successful implementation to be awarded to them whose involvement, participation and contribution ranked in Top 10 based upon the secret voting by all the team members.
What is One thing you should do before you start Implementing an Advanced System? (EXTERNALLY)
The company should rely on their internal team for this new implementation and should make them available on topmost priority. But that is not enough for a successful implementation.
The company should hire an experienced consultant having prior experience with ERP+CRM functionality and also knowledgeable about Business Processes and Business Models. The implementation is a full-fledged exercise whose full responsibility should be given to an outsider who is not only experienced but also free from routine business activities.
Not only will this lead to a successful implementation but also on time. It will bring more cost savings in implementation, in comparison to the cost incurred as consultant’s fee. It will streamline the process of implementation, co-ordination with internal team will be smooth and the company team will be better responsive. The full business flow will be aptly mapped, bringing the automation wherever required and the end result will uplift the business performance. It will result in proper training, right understanding and an overall better usage of the system. The transition will be seamless.
L-U-D-I-F-Y (Let Us Do It For You)
It is an Investment and it works like an Insurance for your huge Investment.
Our Team has learnt from the industry’s mistakes so that you don’t have to go through any types of mistakes. Majority of the people experience the following –
Wrong study of own requirement
Over expecting from your own team
Wrong selection of ERP
Shortage of team
Lack of expertise
Diverting time to other projects
Own team not ready for change management
When we participate in ERP Implementation process, we understand the necessity of a broad framework where all the functions’ process-flow and reports-flow are well embedded and from this framework, one can easily find out →
Which functions / processes get benefits / uplift
Cost savings area (say, due to automation and removal of redundant processes)
The value of future benefits (cost-benefits analysis)
Where, what and how much resources will be required
Where data and skill upgradation required
Stages of completion
You may consider hiring Re.consulting as your Chief Consultant for ERP
We start in an amazingly simple way. We apply the below 4 criteria to decide our next plan of action –
Where does your organization stand?
Who all i.e. who’s who?
What is your requirement?
What current software are you using and to what extent?
The above will help us in identifying your multiple GAPS and take the right decision for your benefits.
As the Chief Consultant,
We MAP your requirements as per your Business Model
We study the various short-listed systems with their constraints
We MATCH the above two, to get you the Right Solution
We identify the Right Plug-Ins with proper Integration
We select the Right Vendors
We analyze the Team in our model, for the two phases viz. ‘During’ and ‘After’ Implementation