Enterprise Resource Planning (ERP) systems serve as the backbone of many organisations, streamlining processes, integrating data, and enhancing operational efficiency. However, an ERP implementation is complex and can sometimes encounter challenges, leading to disruptions and setbacks. The key to overcoming these obstacles lies in adopting effective recovery strategies. In this article, we will explore the concept of ERP recovery and discuss the strategies developed by Project One to help our customers successfully navigate the path to ERP system stabilisation and optimisation.
5 signs when an ERP Reset or Recovery is required:
- Escalating Costs: Increased timelines and escalating costs are a key signifier that a programme reset, or recovery is required. Constant replanning, inability to meet key milestones, poor governance and control, lack of skilled resource and poor architectural governance are just some of the key contributory factors commonly seen in ERP programmes that require proactive intervention.
- Lack of Engagement: Failure to demonstrate progress and manage expectations results in disengagement with the ERP Programme across the stakeholder community. Business leads become frustrated, staff turnover increases, tactical projects take priority and there is a general lack of faith that the Programme will ever deliver.
- Loss of Governance and Control: Like most large-scale change programmes, maintaining governance and control is crucial to the success of an ERP Implementation. Indecisive sponsorship, unclear accountabilities, inadequate planning and poor risk management can result in the inability to adeptly overcome issues, the breakdown of vendor relationships and an increase in staff burnout.
- Stuck in Design: Due to the inherent complexity of ERP implementations, they can very easily find themselves ‘stuck in design’. Unable to progress into a tangible build phase, those involved in the programme become frustrated and dejected, disengaging from, and even abandoning the programme.
- Workarounds and tactical solutions: Where there is an over reliance on ‘work arounds’ within the overall ERP implementation solution or evidence of tactical solutions being developed in the business to address the delays in implementation, these should be considered ‘red flags’.
5 Common Reasons an ERP Implementation may be failing.
- Absence of a clear and shared vision: By their very nature, ERP implementations are complex and lengthy programmes of work. While ‘in flight’ there may be changes in the Senior Leadership Team, changes in the strategic goals of the business or unforeseen external events. This means the original objectives of an ERP implementation can become uncertain and ambiguous. The leadership team, stakeholders and primary vendor may display different, and sometimes, contradictory conclusions regarding the goals and direction of the programme.
- Strained Vendor / SI Relationships: It is crucial that a cohesive and trusting relationship is maintained between the business and their chosen ERP Systems Integrator. When accountabilities are blurred or slippage in key delivery milestones occur, tensions can develop between partners and ‘finger pointing’ is the inevitable result. A ‘one team’ collaborative approach is the key to success.
- Ineffective Sponsorship and Programme Leadership: ERP implementations consist of new strategic technology platforms and significant business change complexity. Programmes of this magnitude require a strong business-led programme sponsorship and leadership governance structure. If this is under-represented, the outcome of the ERP technology implementation is unlikely to match the expectations of the business change objectives.
- Configuration not Customisation: Deploying an ERP system is likely to require significant changes to existing business processes and procedures. Customising the ERP solution to fit existing ways of working is very tempting, however this can lead to an unexpected increase in cost and raise tensions between business and technology stakeholders. The programme should focus on exploiting the configuration functionality offered by the ERP system and keep any customisation to a minimum. You can find out more about customisation in our previous blog here.
- Architectural Stability and Governance: The success of an ERP implementation depends greatly on a clear and comprehensive corporate data model and a documented enterprise-wide architecture. These underpin the programmes data migration and system integration strategy. Failure to secure these prior to embarking on ERP implementation will unnecessarily result in on-going systems integration challenges, the implementation of ‘point solutions’ with no strategic focus and extended data migration and testing activities.
6 steps to executing the Recovery Process
- Diagnosing the Challenges: The first step towards ERP recovery is a thorough diagnosis of the challenges that led to the programmes instability or system underperformance. This includes assessing the root causes of the issues by undertaking an independent review and recovery assessment. By understanding the underlying problems, a targeted recovery plan can be developed.
- Formulating a Recovery Plan: A well-defined recovery plan is crucial for getting an ERP system back on track. The plan should outline specific actions, timelines, and responsibilities for addressing the identified challenges. It is essential to involve key stakeholders, including the senior leadership team, project managers, end-users, and any external vendors in the development of the recovery plan to ensure buy-in and collaboration.
- Leveraging Expertise: Engaging external ERP consultants or specialists can provide valuable insights and expertise during the recovery process. These professionals can conduct an independent assessment of the situation, offer recommendations, and guide organisations in implementing best practices. Their experience in ERP recoveries can help accelerate the stabilisation process and mitigate risks.
- Prioritising Training and Change Management: One common challenge in ERP implementations is resistance to change from end-users. To address this, organisations should invest in comprehensive training programs and change management initiatives. Training should go beyond system functionalities and focus on how the ERP system benefits individual roles and the organisation as a whole. Clear communication about the reasons for the recovery effort and the anticipated benefits will help gain user acceptance and engagement.
- Continuous Monitoring and Optimisation: ERP recovery is not a one-time effort but an ongoing process. It is crucial to establish monitoring mechanisms to track system performance and user satisfaction. Regular assessments will identify areas for improvement and enable organisations to fine-tune their ERP system to meet evolving business needs. Additionally, staying up to date with ERP vendor releases and updates can provide access to new features and enhancements that can further optimise system performance.
- Building a Culture of Continuous Improvement: Successful ERP recovery goes beyond system stabilisation. Organisations should foster a culture of continuous improvement to ensure the long-term success of their ERP initiatives. This involves establishing feedback loops, encouraging user input, and actively seeking opportunities to enhance processes and leverage new system capabilities. By embracing a mindset of continuous improvement, organisations can adapt to changing business requirements and maximize the value of their ERP investment.
ERP implementation is a critical journey for an organisation. Given their complexity, recovery is often needed to address challenges and realise the full potential. By diagnosing the underlying issues, formulating a recovery plan, leveraging expertise, prioritising training and change management, monitoring system performance, and fostering a culture of continuous improvement, organisations can successfully navigate the path to ERP system stabilisation and optimisation. With a resilient and well-optimised ERP system in place, organisations can drive operational excellence, enhance decision-making, and achieve their business objectives in a dynamic and competitive landscape.
If you want to know more about how to mobilise, deliver or recover an ERP implementation, or just want a sounding board, please get in touch with firstname.lastname@example.org