First and above all, listen to your people, your customers, suppliers and Business partners.
Proper preparation is half the battle, it lays the foundation for success.
It is common knowledge that without proper preparation companies get only half of the functionality they really need when implementing a new ERP solutions, either they ran into budget or timing constraints, and/or the solution provider is not able to deliver what is promised, because it is not there.
[open] Digital transformation should not be missing from the agenda of top management
When companies go international and open branches in other continents, they face unique challenges.
In addition to cultural differences and language barriers, there are local laws and regulations, local currencies, legal forms and financial reporting challenges.
An aspect that is too often overlooked is digital agility and digital maturity.
Today, in many companies, critical business processes still run on advanced spreadsheets and departments are struggling with legacy systems to get a grip on information flows.
Financial managers, on the other hand, under the guise of ensuring financial reporting (IFRS, US Gaap), have created their own digital truth by implementing standalone planning, reporting and consolidation tools, while branch and department managers lack real-time insight into costs and performance.
Indeed, it is not an ideal starting position to safeguard and perpetuate the desired growth.
Without proper digital support for cross-business processes and collaboration in the value chain (upstream and downstream) growth will be hard to accomplish. There is a limit to what organizations can handle with people.
Thus digital business transformation should certainly not be missing from the agenda of management.
[open] Without a digital mindset, anxiety will only increase
Under pressure from expiring support contracts, increasing globalization and the growing number of laws and regulations, anxiety in companies increases. More than ever, executives are experiencing that their growth ambitions are being held back by the lack of maturity, flexibility and robustness of their digital business landscape, business processes and organization.
In the hustle and bustle of the day - in the focus of leaders on their own products and business - managers did not see this coming while others thought everything was fine.
Is there a lack of real digital leaders, strategic thinkers, who see and know how to utilize the power of digital technology?
[open] It is time for innovation
We lack real digital leaders who know how to utilize the power of digital technology to build agile and robust environments that support rapid growth of their companies.
Where in the past a business application was already outdated when it went live, the current Cloud solutions are for life. In the new delivery model of Cloud application suppliers, 'continuous innovation' and 'flexible integration with other platforms' are paramount.
All around us, digitally progressive companies are embracing the "composable architecture idea" and are setting up scalable, agile and data-driven environments using ERP, WMS, PLM, Digital Commerce Cloud platforms.
[open] Many small and medium-sized companies are far from ready for this
Modern Cloud ERP platforms are ideally suited for these companies to make their first steps in realizing their ambitions. When these are properly designed and utilized to their full potential, they bring back the pleasure of working, streamline business processes and provide real-time progress information to those in charge.
Financial managers will reap the benefits of the integrality that ERP solutions bring them, but they must realize 'everything comes with a price'.
The impact of an ERP implementation appears to be greatest in the financial departments of medium-sized organizations. On the one hand, they will have to hand over more responsibility and on the other hand, they will have to work more together and step out of their isolation.
[open] Preparation is half the battle
Members of the boardrooms should realize that replacing an outdated ERP solution is not something that should be done without proper preparation. At least not if the prospect of continuous growth is the goal.
Good preparation, decisiveness and leadership double the chance of success.
✔ What do we mean by proper preparation?
Formulating a clear and distinct business vision and strategy, determining the organizational culture necessary to achieve the defined business goals, ensuring that digital and business vision + strategy are aligned.
Gaining in-depth knowledge of processes and data (operations), information systems and applications (technology), culture and structure (organization), management and control (governance) and determining what the future should look like.
✔ Why is decisiveness important?
When leaders do not trust people, do not believe their organization is able to carry the heavy transformation, and feel the weight of the entire organization continuously on their shoulders, they postpone making decisions.
"No choice is also a choice, but it is a risky choice."
Risky because decision-making affects the entire organization and not just the leader. No choice is choosing to leave everything as it is: the Status quo bias.
Sticking to the old will inevitably jeopardize the medium and long term goals while employees tired of waiting will choose to abandon the sinking ship.
“Choose and Take Action” are the most important steps in the decision-making process.
✔What form of Leadership do we need?
It takes a strong leader with knowledge of the business to make decisions, to assign tasks to team members, to advise on how to execute these and to ensure they do so. A strong leader with knowledge of ERP who is mandated to delegate responsibilities to executives and keep project progress on track.
As a company, you cannot and should not put the future of the organization in the hands of an implementation partner.
[open] The preparation, what is it?
It is my firm belief and the experience I share with several colleagues in the field that a successful ERP implementation is about digitally transforming a company.
Digital transformation consists for 75% of efforts that the business must make to prepare for and implement changes, and 25% of efforts by implementation partner(s).
The major solution providers have been responding to this for several years and are offering companies more and more tools for self-enablement, self-reliance and self-management.
Companies, in my view (detail explanation below), have three choices: Do It Yourself, hybrid or outsourced
ERP implementations, when done right, require a significant amount of time, resources and knowledge of a company.
In the hybrid approach, your people do the heavy-lifting, the knowledge-intensive work guided by a strong implementation leader. If no one can be freed up internally for this, bring an external leader on board on a temporary basis to guide the transition and steer people organizationally (culture, structure) and technologically (application, process and information landscape). Someone who will also help you organize your approach and set up a 'Digital Business Competence Center'.
Use the specialized knowledge and skills of your implementation partner to configure the system, integrate data and train your people.
[close] How do you approach this?
It is recommended to carry out a thorough assessment of your organization in the run-up to a selection and/or implementation.
If one does not know to which port one is sailing, no wind is favorable. — Lucius Annaeus Seneca.
Such an assessment must investigate and identify at least the following:
the desired positive outcomes (GAINS) and the daily experienced undesirable effects (PAINS) of employees, departments, branches, customers and suppliers
an overview of the PAIN RELIEVERS (changes that eliminate pain points) and GAIN CREATORS (solutions that simplify business processes)
the strengths and weaknesses of the digital business landscape
an extensive description of the business processes and information flows of the future
a transparent corporate vision, objectives and roadmap for the future
You are probably wondering how are we going to tackle this? Who is going to do what? Should we free up people completely?
Very relevant questions. The answers will emerge naturally.
◼ Sometimes employees will just take the lead because they believe it is important that their requirements and wishes are realized. These can also be employees from central staff departments such as - IT, Quality - who take the lead.
◼ Within smaller companies I often see that the owners or directors take on that challenge.
However if no one is willing or available, you can still look externally for someone who can handle this on a project basis.
Do not make the mistake to burden someone in the organization with little or no affinity or interest in this.
It is not wise either, I see it happen regularly, to give students this as an internship assignment, without proper guidance of an experience implementation & selection manager.
If you want to be successful, you need someone with knowledge and experience, the best man or woman in your organization, or someone from outside with enough miles on the clock.
[open] The list with 10 to 20 requirements that really matter
During the assessment, a list is created with approximately 100 - 300 wishes or requirements.
Do not send the list in an RFI to potential solution providers.
The list should be condensed into a manageable overview of 20 to 50 requirements that make your company unique and that you are not sure whether providers can meet.
If you want to remove uncertainty from the selection process, now it is time for self-reliance.
A large number of suppliers have made their user guides and process descriptions available online. Some offer even a DISCOVERY environment upon request.
Browsing through these manuals is a hell of a job, labor and knowledge intensive and complex given the different definitions, concepts and terminologies used.
However, it is an important step to gain more control over your wishes and requirements. Companies will realize that many things that you find important are simply standard in most ERP solutions.
Ultimately, it's about the requirements that make your company unique and that your users can't live without. In your current environment you probably have a lot of customization for these requirements.
When researching the functionalities offered, use your list of +100 requirements as a guideline.
Group the list in advance by domain area - department and process - and briefly describe the wish or need. Also record whether it (1) has an internal or external origin, (2) is currently a pain point (undesired effect) or desired outcome, and (3) whether it is functional or technical.
The goal is to retain at most 20 - 30 important requirements that you can use to challenge potential suppliers to see how and whether they can meet them.
By the way, when researching functionalities offered by suppliers some suppliers will automatically drop out because they do not offer what you need.
In case of doubt, you can always ask a supplier directly.
If you do not have the time and space to conduct this research, please note that a comparison overview of features from ERP solution providers is available on my website - Button Show/Hide ERP Comparison.
[open] Which suppliers to investigate?
Don't research all the vendors that provide solutions. That would take up too much of your time.
If you look at your industry and listen to what others have done, a handful of suppliers/solutions quickly emerge.
[open] Which supplier should you work with?
Some solution providers work exclusively with implementation partners, while others handle the implementations themselves.
With the move to the Cloud, we see that more and more providers start to work with implementationpartners, so they themselve can focus on management of the Cloud environment, product development and large customers.
We cannot hide or ignore it, but an implementation partner is only as good as the strongest consultant they have in-house.
Moreover, as a customer you have little insight into the knowledge and experience that implementation partners have.
Yet there are ways to find out and meanwhile discover whether a provider's solution covers your needs.
Invite an implementation partner for an informational session during which users explain their future business processes and discuss the possibilities with consultants.
When you map out in advance which wishes and requirements a solution cannot meet, you can focus on these during the session.
I wouldn't worry too much about viability. When you do business with one of the larger players and study the findings of Gartner and other research agencies, you know enough.
[open] Pause, distance yourself, get a better starting position
For the success of your project, it is important that you strive for a better starting position before the start of the implementation, consider:
✔ Removing barriers identified during the assessment, such as:
reducing the knowledge gap between departments and ensuring that departments work better together
recording, optimizing and coordinating processes across departments
✔ rationalize the business application landscape and introduce application portfolio management
✔ Strengthening the organization with technology-conscious business-driven experts
✔ Strengthen ties with partners, customers and suppliers and involve them in your initiatives
✔ Increasing support among all employees and management
Application rationalization and application portfolio management are ideally suited to reduce the number of applications within organizations to acceptable levels.
It is common knowledge that medium-sized companies have too many applications in-house, a result of too much autonomy of departments and teams and the lack of a business focus among IT departments.
Through harmonization, standardization and consolidation, redundant, rarely used and duplicate applications can be eliminated.
Implementing a Product Lifecycle Management (PLM) solution and/or a Product Information Management (PIM) solution also contributes significantly to achieving a better starting position.
PLM covers the entire life cycle of a product, from development to reuse and/or recycling, and focuses in particular on the Supply Chain and cooperation with suppliers. More and more PLM solutions offer facilities for managing their social and ecological footprint.
PIM is indispensable when you have web shops, websites, marketplaces and product data pools such as ETIM, GS1, EZ-base with which product information is shared with customers.
The pause moment is not a rest moment. It is the perfect time to prepare the organization for what is to come, create support for the change that will take place, and free up or attract the right people.
[open] Do you have the right people in-house to handle the project?
The biggest challenge your company faces is freeing up the skilled - seasoned managers - who are able to take charge of your organization, convince and retain employees, manage external partners and ensure that change becomes reality.
Do not underestimate how much time, knowledge and experience, creativity and leadership capabilities an implementation project requires. It is a full-time job for not one but more people and requires decisiveness, commitment and a mandate to implement changes.
Building a team with the right knowledge and experience, growth mindset and visionary approach does not happen overnight. Many companies have become wise through trial and error. If this is your route, first strengthen your organization and prepare your people for change.
Know that change comes with making choices. These choices have an impact on your company, your managers, your employees and its environment.
Every change requires a transition, a transition period from letting go of achievements and taken for granted to accepting that things have to be different.
[open] The contract
Coordinating the contract(s) with your implementation partner(s) is, in addition to the preparation and ensuring a better starting position, the toughest job.
It is not the cost of the solution that will give your financial director sleepless nights, but the hours of business, functional, technical and other consultants who are on your doorstep every week. That is why you must keep your finger on the pulse from day one, otherwise the costs will spiral out of control and the results will lag behind. If you are not on top of this, at the end of the day your people will receive less than what they had.
Don't hesitate to sound the alarm if something doesn't suit you or is unclear. A relationship manager has been set up for this purpose at your implementation partner.
During the contract discussions, clearly define the scope of the project, the efforts to be made and the results you want to see, the consultation moments, relationship manager and escalation procedures with your implementation partner.
And monitor progress during implementation because you must ensure that the momentum of your project is maintained both internally and externally, the right things are done at the right time by the right people (internal and external) with the right resources.
Pay particular attention to third-party applications that are implemented to fulfill specific tasks such as Output Management, generating documents in your corporate identity, or reporting and workflow management tools.
Since the implementation of add-ons or apps is not a core activity of implementation partners, other specialists are flown in. There is nothing wrong with that in itself, but sometimes implementation partners try to fill that gap with starting consultants.
Make sure you make clear agreements about the deployment (rates, lead time, quality) of both external specialists and these junior consultants, if that is the case. After all, you don't want delays, higher unforeseen costs and lower quality.
It is often better to approach and manage suppliers of these Add-Ons yourself.
Today (almost) all ERP solutions are in the supplier's Cloud and the usage costs are charged in a subscription form. However, it is good to consider who should have direct access to the solution.
We see mobile apps appearing at many suppliers that, on the one hand, make the lives of people who are not behind the buttons every day, for example to book their hours daily or weekly, and on the other hand have no or a much lower subscription fee. Your implementation partner or a representative of the supplier can determine exactly for you what the best subscription types are.
Most suppliers release 2 new releases and software updates every year , so you always have access to the latest new functionalities that have been released.
Keep in mind that you are often only allowed to be one release behind and are responsible for testing whether all functionalities for your setup still work.
[open] How secure is my solution in the Cloud?
What is the status of data security and access to the solution?
This question is probably the first thing that comes to mind for you or your management when you hear that the solution is somewhere in the Cloud.
I can assure you that even your own IT people do not have easy access to your production environment. Strict security standards apply in this regard!
With some suppliers you can choose to outsource the solution to a hyperscaler of your choice, allowing you to increase security even further or customize it to your liking.
Hyperscalers are large Cloud Service Providers (CSP) that offer Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and/or Software-as-a-Service (SaaS) services.
Other Cloud ERP providers only offer their solutions in a multi-tenant environment where users share the software and other resources with each other. Be sure to let your implementation partner or supplier provide you with detailed information about the architectural options offered. Each supplier follows its own approach. The choice you make can also influence whether or not you automatically receive updates from the supplier.
That automatically brings us to the next question that regularly arises. Where is the supplier's data center located? More and more European companies do not want to have their solutions in an American data center because they cannot comply with privacy law and cannot guarantee that personal data is as well protected as in Europe.
For example, European data that is processed or stored in the US will have to be secured there in accordance with the European General Data Protection Regulation (GDPR, the AVG in the Netherlands). At the same time, this data also falls under the American legal regime that monitors access to that data. The CLOUD Act (Clarifying Lawful Overseas Use of Data Act) allows federal law enforcement in the United States to force technology companies through a warrant or subpoena to provide requested data from users, even if that data is stored on foreign soil.
The new EU-US Data Privacy Framework (DPF), which was adopted by the European Union on July 19, 2023, limits what US intelligence services may collect data from European citizens.
However, I do not think that the suspicion and distrust among European companies will disappear.
[close] Agile versus Traditional approach
ERP implementations cover your entire company and require decisions about the design of your organization, data management, business and process models.
In many implementation processes, these issues only arise halfway through the project and then lead to significant delays because C-level executives have to decide on them.
Choosing an agile approach without compromising the objectives of your company requires thorough and thorough preparation in which these crucial questions have been addressed prior to implementation and administrative involvement of the management team so that critical decisions can be made timely and quickly.
During the preparation (the assessment, the research into functionalities, the discovery trips with suppliers), the majority of the critical questions and points of interest have been addressed and you have already found answers to them.
Agile is a philosophy, it is a way of life, it is experiencing together, discovering what is good, putting YOUR OWN PEOPLE in charge. It's about learning, experimenting, falling hard and moving on, achieving small successes.
It's about making the right choices for the future of the company.
Agile lends itself very well to (digital) business transformations, including ERP, but only for certain steps in the implementation process:
collecting and specifying the needs and requirements
configure and validate the design of chosen processes
determine what you will do, when and how
Agile requires Business and Application Specialists to work together to realize the value your company and your employees are looking for.
I am in favor of an agile value-driven approach with Just-Sufficient-Design-Ahead that assumes a phased approach with a baseline, and with releases that are implemented in an agile way.
With Just-Sufficient-Design-Ahead I assume that in the preliminary phase it has been clearly identified which functionalities will be provided for the needs.
Such an agile value-driven approach is very useful when migrating from a legacy ERP environment to a new environment in the Cloud because the pain points and desired outcomes are known long before the implementation starts.
Half of a successful ERP project consists of preparation, activities that lead to making the right choice, creating a better starting position and defining the baseline and releases.
The baseline contains the most important processes in your company as well as the organization of companies and master data.
The BUSINESS Effort is delivered by your people or external advisors.
The JOIN Effort is delivered by the entire implementation team.
