ERP IMPLEMENTATION BOOT CAMP The Manufacturing ERP Experience Sponsored by MetalForming Magazine October 8-9, 2013 Christopher Devault Manager, Vendor Relations Panorama Consulting Solutions www.panorama-consulting.com Phone: 720-515-1377 1
About Panorama Consulting Solutions Niche consulting firm with focus on the ERP market Our service offerings include: ERP Software Evaluation and Selection ERP Implementation Project Management Organizational Change Management and Benefits Realization Business Process Management IT Strategy Experience with 150+ ERP packages Depth in targeted industries including: Manufacturing and Distribution Financial and Professional Services Government and Public Sector ERP vendor independent and neutral 2
Some of our Clients 3
Broad and Deep ERP Experience Some of the 150+ different ERP software packages we have evaluated and implemented for our clients 4
Agenda Basic Training Purpose of this Session Basic Training: Keys to ERP Success Questions 5
Purpose of this Session Provide an introduction to ERP best practices Summarize some of the general keys to ERP implementation success Provide a foundation for these concepts 6
1. ERP is about your business, not the technology. 7
ERP: Business vs. Technology Implementation Approach Technical Approach Slam in the system; Just get it done Business Approach Implement quickly, but take the time to get it right Designing the System Define technical requirements Define business process requirements Training System transaction training Process and workflow training; Vs. emphasizing ERP system as an enabler of those processes Measures of Success Minimize technical bugs Minimize disruptions to business & maximize business results Organizational Change Management Train to use the system Build a variety of employee buy-in, communications, and learning tools 8
2. ERP initiatives are very challenging. 9
ERP Implementations Don t Deliver as Expected 10
ERP Project Statistics 11
ERP Business Benefits Can Be Elusive 12
Implementation Budget/Cost 13
3. Business process reengineering should start before implementation begins... and continue throughout the project and beyond! 14
Business Process Reengineering Is an Iterative Process Implementation: Transactional Processes Go-live: Process and System Training Future State Processes Blueprint: Business Process Reengineering Selection: Business Requirements Current State Processes 15
4. ERP software best practices and preconfigured solutions do not solve all the challenges of ERP. 16
Three Levels of ERP Best Practices Implementation Complexity, Time, and Cost Little use of best practices 50-60% use of best practices 60-75% use of best practices Competitive Advantage Advanced ERP modules and solutions Customization and Integration to other systems Typically focused on market-facing enhancements Examples: CRM, social marketing, ecommerce, forecasting Industry Differentiators Unique to industry Source of competitive advantage Typically focused on managing internal costs Examples: Supply chain management, procurement Basic Functionality Non-differentiators, common across industries Not a source of competitive advantage Typically related to overhead functions Examples: accounting, GL, order entry Accounts for most of the unpredictability and risk of ERP implementations 17
5. Your project will struggle without adequate organizational change management. 18
Change is Never Easy 19
Selection and Implementation Life Cycle Life Cycle Software Selection Implementation Services Organizational Readiness Stakeholder Analysis and Executive Alignment Marketing and Communication Benchmark Assessment KPI Validation Blueprinting Technical Support Business Process Management Blueprinting ERP Configuration Cutover Organizational Change Management Vendor Evaluation Contract Negotiations Organizational Design Reports, Interface, Extension and Conversion Development Data Conversion Roles and Responsibilities Matrix, Sourcing, Transition Planning Training Training Delivery IT Strategy Risk Assessment Training Strategy Training Design Develop Training Materials and Plan Post Implementation Support Performance Mgmt / Benefit Realization Audit Business Case Benefits Realization Development 20 Technical Activity PCS Activity
6. If your operations and ERP system are misaligned, it s probably not the software s fault. 21
Misalignment of ERP Systems Initial Requirements Initial Implementation Misalignment between ERP system and business requirements 22
7. Expectations are high, but many organizations don t properly define the ERP finish line. 23
Companies ERP Expectations 24
Companies ERP Results Source: Panorama Consulting s 2013 ERP Report Copyright 2013 Panorama Consulting Solutions 25
Three Phases of ERP Competitive Advantage & ROI Business Benefits and Competitive Advantage 72% of ERP implementations* Software focus Phase 0: Legacy System Broken business processes Misalignment with business requirements Technological obsolescence ERP Phase 1: Go-Live Core functionality Embedded best practices Industry preconfiguration Limited alignment with competitive edge Time ERP Phase 2: Competitive Edge Advanced modules & functionality Third party bolt-ons Reporting & analytics Business process improvements Customization ERP Phase 3: Results & ROI Fine-tuned business processes Fully leveraged functionality Superior ability to analyze and execute 28% of ERP implementations* Business process re-engineering and organizational change management focus 26
8. Nearly all organizations strive for no customization, but 90% end up customizing. 27
ERP Customization Level 28
9. Executive buy-in and support is critical to ERP success. 29
What Does Executive Buy-in Mean? Approve project budget Assemble steering committee Key business decisions Project status Approve changes to scope Approve software customization 30
How Frequently is it Achieved? 31
10. If you don t measure it, you won t achieve it. 32
Cascading KPIs Through Your Organization Corporate KPIs Tied directly to corporate-level goals Sample KPIs Wholesale sales and profit Retail sales and profit Product development time to market Business Unit KPIs Business Unit KPIs Sales and profit by region Sourcing costs Number of product introductions per year Departmental KPIs Departmental KPIs Average inventory costs Number of new product designs completed per year Inventory accuracy Individual KPIs Individual KPIs Average inventory cost by location Number of new designs per employee 33
Downstream Importance of KPIs Key Performance Indicators Business Case Justification Data Requirements Reporting Requirements Business Results 34
Questions? Chris Devault Manager, Vendor Relations Panorama Consulting Solutions Chris.Devault@Panorama-Consulting.com 720-515-1377 35