Software that is designed to direct business operations – Enterprise Resource Planning (ERP) software – has earned a bad rap as an expensive and drawn-out exercise that often does not live up to expectations.
This is because software selection gets more attention than business strategy formulation. To counter this, here are ten questions that can help those planning to spend a significant amount of resources on new software to determine the true business purpose:
1. What is limiting your business’ growth and competitiveness?
It is all about:
What is stopping you from achieving this?
2. What behaviours and rules gave rise to the existence of these business limitations?
3. How are you planning to overcome these business limitations with the investment in the ERP solution?
4. How up to date and accurate are the current business processes, business rules, and data models?
Enterprise software systems such as ERP are living, constantly changing systems. The documentation that describes how these systems work, are not.
When a new ERP project is kicked off, the line management, software vendor and system integrator all assume they know what the system needs to do, deadlines, budgets and expectations are set on this.
Start by really understanding how your company works by following a comprehensive collaborative approach to updating the current business processes and business rules. Use a business process modelling software solution, not word processing, presentation or diagram drawing tools.
5. What are the new rules and behaviours needed to take the business forward?
6. How must the new software support the new rules and behaviours?
Take care not to provide requirements that result in the new system being based on how the old system works. The design criteria of the new system must be rooted in the business purpose of the project. The new system must serve to:
7. Who are the most important stakeholders both inside and outside the business?
ERP in large organisations never operate in isolation, your value chain partners both upstream and down-stream are critical stakeholders in enhancing flow through the entire value chain. Internal stakeholders include internal audit, risk, legal and compliance, not only the functional business areas.
8. How will you ensure that all identified stakeholders are consulted, collaborated with, informed, involved, and empowered throughout the project?
It is important to ensuring that the entire ERP team, including staff, stakeholders, partners and vendors are working together towards the same strategic business objective.
9. What impact will the new software have on the business and its people?
ERP projects typically follow one of four paths:
Effective: where you experience returns that far outweigh the ERP investment, Improved competitiveness, limitations in the business have been diminished. All stakeholders in the business are embracing the way ahead and the Future is exciting.
Efficient: The project team claims efficiency by performing against time and budget criteria. Changes were probably within palatable boundaries. The initial scope was doubtlessly reduced at some point to accommodate time and budget constraints. There is no recognizable improvement in the business to the extent that you might as well not have done the project.
Precipice: The project reaches a Point of No Return at which juncture going back to the previous system will be more painful and expensive than making available additional funding to just get the project done.
Fail: The Project is cancelled and legal options are explored. Money, time, business opportunity and valuable staff are wasted and broken. In an absolute worst case, the company suffers irreparable destruction of its competitive positioning.
10. What have you done to determine whether the business is ready for the project?
Projects do not exist in isolation, there are always factors both outside and within the control of the project team that affect the successful outcome of the project. The success of the project is to a large extent dependent on:
The scenarios applicable to the project environment along with the indicator flags must be thoroughly workshopped at the outset of the project. The project management team must then empower the project team to watch out for these flags and to report them when they appear. The project steering committee is provided with the required information on the scenarios and flags and they are empowered to act appropriately to steer the project in the desired direction.
This becomes a separate and very strategic topic on the agendas of project progress and project steering committee meetings. Project managers and executives must guard against trivializing this important component of helicopter view project monitoring.
Hein Pretorius is from Onpro Consulting