Your car probably works hard for a living. You rely on it and depend on it. Consequently, at regular intervals, you will put it in the hands of people you trust to check it and ensure it runs correctly. At the same time, they will re-tune it for peak performance.
ERP systems are not cars. One difference is that lives may be at risk if the latter fails, but only livelihoods are jeopardised if the former fail. Of course, we need to use the word ‘only’ with some circumspection here: try telling people that their company is ‘only’ closing and that they are ‘only’ losing their jobs. The analogy remains valid, though: ERP systems require regular servicing (and maybe even a yearly inspection) to ensure they are running correctly.
“How come?” you ask. “Surely software keeps ticking until we hit a bug or problem, and it just needs fixing.” Well, you could say the same thing about your car; that you should keep running it until it stops (or, in the case of a brake problem, fails to stop). But would you advise that? Probably not. So what can go wrong with an ERP system, especially one that may appear to have been running contentedly? Well, let’s look at some possibilities.
1. System enhancements
Let’s assume that your ERP system was implemented with the help of consultants and system integrators who were knowledgeable and competent (though more on that later). Then, when you implement it, you will hopefully have been advised of what that particular system can do, what it cannot do and what it cannot do very well. You will then have made pragmatic decisions about how to use it, bearing in mind that all packaged software requires compromises.
However, most ERP systems are updated at least yearly. New functions are added, and sometimes old constraints are removed. That opens up possibilities for improvement in how the system is used and in the results it can generate. So the advice you initially gave wasn’t necessarily wrong. However, it was very likely constrained by the tools available at the time. Perhaps those constraints are no longer valid.
2. Changes in expectations
Frequently, when a new ERP system replaces something that has not been working correctly for some time (or may never have worked properly at all), all the users ask for, and want, is something that works. Their expectations are limited to a reduction in the pain they have been suffering. But if your new system has been in for a year or two and has settled down, you perhaps are already thinking of pushing back the boundaries. Are there areas you did not include in the original implementation because solutions to these problems seemed beyond reach? Were there things you would have liked at the time that the budget would not stretch to? Have times changed? Have people’s expectations changed? If so, then perhaps it is time to revisit those expectations to see if they can now be satisfied: which leads us to point number 3.
3. Incorrect decisions at go-live
As mentioned in point 1, you were likely guided by the system integrators and consultants working with you when initially implementing the system. Therefore, you will have been, to a greater or lesser extent, reliant upon their expertise and knowledge of the system. But these people, regardless of the fees they charge, are like the curate’s egg; good in places.
Were the people you worked with as good and knowledgeable as they should have been? If they were not, the advice you received was not as good as it should have been. Even if you had good consultants to work with, they may have been new to your company and maybe even further to your industry. You will both have started out knowing little about each other’s patch; you know their software and that of your company. Under these circumstances, unless great care were taken, the risk of making wrong decisions would have been high, mainly if either party was inexperienced. (In fairness to consultants, they frequently work under constraints of both timescales and budgets and are often not allowed, by parsimonious clients, to do the job they are capable of.)
Finally, you will also have made decisions on ‘static’ data, like batch sizes and lead times. Times, manufacturing methods and working practices change. With the system up and running, now may be a good time to revisit all these decisions. Are you getting what you wanted and expected from the system? Maybe it’s time to get the system up on the ramp and have a look underneath.
4. Sitting with Nellie
Perhaps a dated expression, what it used to mean was the type of training one received from a job incumbent. The view was that if you sat alongside someone who did the job, you were best placed to learn how to do it. A few years down the line from implementation, it is pretty likely that a few of your people will have ‘sat with Nellie’. (In the interests of political correctness, I should point out that Nellie is just as likely to have been Joe.)
There are many reasons why ‘sitting with Nellie’ is not ideal, but I will restrict myself to just a few:
- Nellie may well be the best person to tell your staff how the system is used currently but is she the best person to decide how it should be used? A typical human trait may also come into play: people do not like admitting ignorance. Asked, “Can the system do this?” most will hesitate to say “I don’t know” and will attempt a confident sounding “No!”. Is your productive use of the system being constrained by staff knowledge?
- It may be some time since Nellie had her training in using the system. Can she remember all of it? Can she remember how much of what the system can do differently or in addition to your current ways of working?
- Is Nellie a skilled trainer? Did she pass on all of her knowledge, or did she hold some things back through neglect or design? Is she protecting her position or giving herself an easier life by hiding her ability or functionality?
Sometimes getting your training from the driving instructor is better than getting it from someone whom the driving instructor has trained
5. Bad habits
Bad habits inevitably creep in over time regardless of how well your system was initially implemented. Sometimes these are driven by laziness (“I know I’m supposed to do it differently, but I’ve found a short cut.”) and sometimes by conscientious people trying to improve things but with insufficient knowledge to recognise the consequences of their actions or inactions (“I know I’m supposed to do it differently but I’ve found a short cut.”).
Frequently, at a managerial level, you will not even know that these deviations from recognised procedures are occurring. Do you have time to police and audit the use of the system? Almost certainly not.
6. Company drift
By this, I mean that times change. The company starts to do new things or old things in new ways. Companies are living, dynamic organisms. They change over time, and their needs and wants change with them.
Systems are less so. They do change (see point number 1). However, they do not automatically change and evolve hand-in-hand with how the company changes. Instead, manual intervention is called to ensure that the system remains tuned and relevant to its environment. Failing that, you will gradually find that you have a system ideally suited to yesterday’s requirements when what you want is for it to be conformed to tomorrow’s.
Having established that your system may benefit from a service, we now have to consider who is best placed to carry it out. There are three obvious candidates: your original consultants, new consultants or the in-house team. Let’s look at the pros and cons of each of these.
A. The original consultants
There are several reasons why these may be best:
- They should have kept up-to-date with system enhancements and should know which of these may be beneficial to your company,
- they may still have available the individual consultants who worked with you initially, and there will be little time wasted in bringing them up to speed,
- if already known to your staff, they may already have their respect and your team may ‘open up to them.
- Do you have confidence in your original consultants? Are some of your problems caused by them not having done an excellent job in the first place?
- If they look at the system and find that they made errors in the original implementation, will they be honest and admit to them, or will they try to cover them up?
- Will they see it as an opportunity to sell more modules, training, and consultancy?
- Some of your problems may have been caused by cutting back on consultancy and training to save money (“If you think that knowledge is expensive, try ignorance”). But, will you be tempted to penny-pinch again if you go the external consultant’s route?
B. New consultants
Most mainstream ERP packages are now sold by ‘resellers’ or ‘partners’ of the software authors or by one or other of the large ‘system integrators’. Suppose you are unhappy with your original consultants. In that case, there may be opportunities to use others conversant with your software. Pluses include:
- They may bring a fresh perspective to your problems, having worked with companies that are similar to yours,
- if they find errors in the way that the system was initially implemented, they will have no vested interest in a cover-up,
- they may be keen to get your business, which may be reflected in their charges.
- You will have to spend some time educating them about your company, its business environment and your current use of the system,
- unless they have been recommended to you by someone you trust, such as another company that you have contacted via a user group or someone that you have networked with via your professional institute, their provenance will be unknown,
- they may see you as someone to sell to rather than work with.
C. Your internal team
In their favour:
- They know the company and how it operates,
- You may have an opportunity to mix people who were part of the original implementation with new blood. If these people join after the initial performance, they may bring new ideas.
- They will be cheaper than external consultants.
- They may have vested interests,
- they are unlikely to know of all the new functionality and features that the system may now offer,
- they may be unable to share experiences of how other companies have used your particular approach to get around some of the problems you are facing.
Depending on the circumstances, you might even opt for a mix of the above. One thing is sure, though; with each passing day, the need for a proper service increases, as does the cost of operating a system that is not as good as it should (and can) be.
Credit: Sam Graham
Guest post by Sam: After implementing ERP/MRPII systems in 13 countries (the UK, the USA, Ireland, Italy, Switzerland, Poland, Czech Republic, Belarus, Netherlands, France, Sudan, South Africa and Germany) across 3 continents, I now just observe the World although I am occasionally asked to use my experience to help companies to define their requirements, to select a new system, to help with their implementation, or alternatively to rescue their failing or failed ERP implementations, either on-site or remotely. Increasingly, I work with companies to move on from ERP to full business and digital transformations, but I generally only work for people who use me to solve problems that others can’t. I have written on ERP (5 books, including “Making ERP work: the ten-point guide to a world-class implementation”), had 18 articles published in professional journals, and I also have written guest blogs for some organisations, including the leading ERP consultancy, Third Stage Consulting. If I can’t help you, I probably know someone who can.