If you’ve been in the market for an Enterprise Resource Planning (ERP) solution in the past few years you will be familiar with the concept of rapid deployment. The idea is that the major ERP vendors can drive down the cost of implementing their systems by doing two things:
Both of these ideas are based on sound principles and can result in reduced costs and accelerated timelines in the right circumstances. However, they can also result in difficult projects and poor customer satisfaction if clients don’t understand the additional demands being made of them.
Naturally, the software vendors tend to accentuate the positive aspects of this approach without dwelling too much on the potential downsides. As a result, I like to encourage my clients to take a more balanced look at the approach.
Can you adopt leading practice?
The first idea behind this approach is that many companies can benefit from changing their current business processes to a leading practice alternative as delivered by the software solution. This is something that I believe has real merit and can underpin the business case for many investments in ERP.
The fact is that most organisations run on business processes that have evolved over time rather than having been designed. In these circumstances, it is usually only the truly business critical processes that evolve to be highly effective and efficient. This means that the remaining processes can usually be greatly improved by adopting a standard leading practice alternative. Add to this pre-developed documentation, configuration, test materials, training materials and data migration routines and you’re really saving time and money.
This will typically be very attractive to C-level executives, but can run aground very quickly when the implementation starts. The business representatives on a project are often very reluctant to adopt a standard process over their current practice and this can lead to delays and resulting cost increases. Even in the best of circumstances, you can apply this approach to maybe 80% of your business processes. There will always be unique aspects of your business that differentiate you from your competitors and these cannot be addressed ‘out of the box’.
Even where processes can be adopted from the standard solution, there is still work to do, including:
Overall, I think that pre-configured solutions can make a real difference to project duration, cost and quality – just not as much as your software vendor might tell you!
The second idea underpinning rapid, low-cost deployment is that a lot of the responsibility is pushed back to the customer. This is in areas where it makes sense at face value such as data migration, training, testing, project management and change management. These have always been aspects of a project where the client has to take a lot of responsibility. However, the assumption that they can do without any (or very limited) support from their implementation partner is increasingly being made. While this can result in a dramatic reduction in the quoted cost, the fact is that most organisations simply don’t have the experience to take this on without a reasonable amount of support. In addition, the investment that they have to make in up-skilling is not worthwhile if this is a one-off project. In reality, most client project teams don’t understand that this assumption was made and are very surprised to find themselves fully responsible for deliverables that they are ill-equipped to deliver. This can lead to unexpected additional costs.
Even where a client can take on all of the assumed responsibilities, it is important to understand the internal cost. This will usually mean that much more time will be required from experienced and empowered business representatives. In a smaller organisation, these are usually the same people who are required to keep the business running. ERP systems often underpin every major process in the business. There is then the added complication that many of those processes are being substantially changed by the project.
In my experience, the greatest factor determining whether a project will succeed is the ability of the organisation to properly staff it. Quality will inevitably suffer if people don’t have enough time or experience to deliver on their project responsibilities. In that context, taking on more responsibility to keep implementation costs down might be a false economy.
The degree to which a rapid deployment approach can be adopted depends on the circumstances. The problem is that this is frequently ignored in marketing material and during sales cycles. The approach is ideal for a start-up business and also works well for the implementation of more standard applications like Customer Relationship Management (CRM) or Human Capital Management (HCM). As a result, accelerated implementation is particularly prevalent in the Software as a Service (SaaS) market. For ERP implementation in established businesses, I would urge some caution – you should look to benefit where you can from the approach but be realistic about what the organisation can change in terms of process and deliver in terms of project staffing.