WHITEPAPER

6 STEPS TO ERP
IMPLEMENTATION
SUCCESS
 IFS Wh it e Pa pe r

Six Steps to
ERP Implementation Success
By Michael Hawksworth, President and CEO, MSS Technologies, Inc.

Like a civil engineering endeavor or sizable construction project, implementing an

enterprise-wide application like an enterprise resource planning (ERP) system to help
run your business is a costly and complex process. And just as would be the case
with any significant undertaking, success is not a given. A certain amount of plan-
ning, discipline and wisdom are required to complete implementation in a timely
manner and to make sure that the new enterprise system put into place meets the
requirements of your business.

Those embarking on the implementation process will find no shortage of advice

on the Internet, but the sheer volume of material may lead to confusion and could
even contain contrary advice. From the standpoint of someone who has been
involved in application selection and implementation for more years than he cares to
admit, here are seven steps to success that are short and to the point. I hope they help
you achieve your goals.

Define success.
This sounds simple, but actually requires some work. If you don’t have a firm
grasp of where you are going, you are likely to wind up nowhere in particular. And
when you are spending a large sum of money to implement your ERP application,
you definitely do not want to find that you have gone through the expense for noth-
ing! All too often, we will encounter companies whose senior management has only a
vague notion of what deliverables they want to see from implementation.

In general, an ERP package can help you grow revenue, increase productivity,
improve efficiency and manage costs. All of these are desirable outcomes, but there is
work involved in determining exactly how an enterprise system can solve problems
that allow you to achieve these goals.

An experienced implementation consultant can help solidify these deliverables

and an associated action plan, but this means that senior managers of the company

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must submit to some educational activities. Keep in mind that the root word of edu-
cation is “educe,” which means to elicit or draw out. This education process consists
of debriefing and organizing information rather than lecturing! No one who has been
in this industry for long will try to tell the senior executives of a successful company
to run their business. To the contrary, a good consultant will draw out of you the
information necessary to drive a successful implementation.

Whether you are working with a consultant or not, the more detailed an idea you
have going into application selection and then implementation, the more likely you
are to choose the correct application for your needs and to have that application con-
figured in such a way to grow your business. Before the selection process begins, it is
important to precisely define the problem you are trying to solve. Are there specific
business processes you need to systematize or best practices you need to adopt? Do
you need to shorten product lead times or reduce returned materials – and if so by
how much? Are there requirements of specific quality programs or regulations to
which you must adhere? And perhaps most importantly, how will solving these
problems pave the way for business growth?

Sometimes the problems you are trying to solve are related to business growth
but rather business consolidation or even shrinkage. Oftentimes, companies that have
grown by acquisition find that they are running very different business systems
across their newly established enterprise, and need to standardize on a new, more
modern business platform in order to begin functioning as a single business entity.
Sometimes these acquisitions cross national borders or span oceans, and that means
these new business systems need to run in multiple languages and currencies. And in
manufacturing, the trend towards outsourcing presents its own business challenges.
Manufacturers that might have in the past made almost everything they sell must
now manage extended supply chains with the same or greater precision with which
they had formerly managed their own plant. Not every enterprise application is
designed for the challenges of this new Project Economy, and even in a best-case sce-
nario mapping out how an extended supply chain needs to operate is a real undertak-
ing. In situations when enabling top-line growth is not the goal, these various
process-oriented and systemic goals need to be quantified.

Set priorities.
One simple fact of ERP implementations is that the number of problems that can
be identified and opportunities for improvement are, if not infinite, nowhere near as

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limited as the number of dollars or people available to undertake solutions. That

means that it is important to prioritize your problems and goals.

The good news is that modern enterprise applications are granular enough in their
construction that you can
implement some functionality
The good news is that modern enter-
immediately to meet your
prise applications are granular enough
most pressing needs, and then
in their construction that you can imple-
expand the application’s foot
ment some functionality immediately to
print to address additional
meet your most pressing needs ...
needs in priority order. This
can also allow more time to
fully master the operation of
the application. Step-by-step implementation can reduce the information overload
that can overwhelm even the most diligent and intelligent managers and end-users
when forced to learn new processes, screens and systems of an ERP system.

For many companies, it makes sense to start by implementing core functionality

necessary to replace what was provided by existing systems. Once the company can
run comfortably in this new environment, there is a solid foundation on which to
place additional functionality for process and improvements and new business capa-
bilities starting with the most pressing deliverables.

Setting priorities can not only separate phase one from phase two, but can also
separate the wheat from the chaff. Brainstorming sessions with departmental man-
agers and end-users can provide some useful input for what can be done with an
enterprise application. But some ideas put forward by an implementation team
should not be taken up. Which brings us to our next point.

Avoid modifications.
With very few exceptions, modifying the source code of an enterprise application is a
bad idea. When we use the term “modification,” we are not talking about customization
or configuration that should be easy to achieve with a modern, powerful ERP either
before or after implementation. Even individual users should be able to customize their
screen views and work environments, but a vast array of configuration options should
be available at the enterprise level, and an even wider array of changes possible with an
optional programming tool kit – all of this without modifying the code.

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Modifications require the application vendor to changes to the source code that
the application runs on, and that increases the total cost of owning the application in
several ways.
z Modifications increase the cost of implementation as custom programming
becomes necessary to meet the specific demands. Modifications also increase
the cost of implementation by lengthening the project timeline.
z Modification increases the cost of technical support because a software
company’s personnel must maintain the modifications in its code
management system.
z Modification increases the cost of upgrades as the modification must in most
cases be “uplifted” each time a new version of the software is implemented.
And this process once again lengthens the project timeline for the upgrade,
increasing both hard costs and the soft costs that can be felt across an organization.

If you select the correct enterprise application, you should not need to modify it
in order to run the essential elements of your business. In some industries, there are
business conventions or processes that an enterprise application really needs to allow
for, and some application vendors align themselves closely with specific vertical
industries so they can deliver this type of functionality as part of their core offering.

But even when all of the pieces are in place for you to meet your business goals
with ERP, some individuals within the organizations may pressure senior manage-
ment to make changes to the application. What results is often a long list of “neces-
sary” modifications, many of which fall into the category of the “convenience mod.”
Convenience mods are things like data entry aids and alterations that would make it
easier for a particular individual or department to perform their duties but perhaps
more difficult for another. Other convenience modifications are designed to make the
new enterprise environment look and feel more like the old one.

Are there legitimate modifications that make sense? Rarely. Even if a modification
could actually help enable business processes, the cost of the modifications in the immedi-
ate to long term often outweigh the benefit. So whenever possible, commit to implement-
ing an application “vanilla” – with no modifications.

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Prepare for change.

Even when change is good, it is stressful. And that is why the more you prepare
your executive team, their staffs, even your customers and suppliers for the change
that an enterprise application represents, the easier time you are likely to have.

Senior executives may have an easy time adapting to a new system because in
many cases, they will only see the reporting and metrics delivered by the system. IT
professionals may have an easier time than others because they understand and can
get excited about the actual technology and what it can do. The people who will real-
ly need the most hand-holding and consideration will be departmental managers and
end-users. Employee inertia can be a powerful force in derailing an ERP implementa-
tion. Before moving forward with an ERP project, consider meeting with a business
process consultant to assess current practices and make recommendations for ways to
ease into the changes.

There are many effective ways to create employee buy-in for the new system—the
most important being good communication. It is imperative that employees under-
stand that the changes, although frustrating, add greater value to the organization as a
whole. Open discussion of how process changes and improvements brought by this
major change can increase the health of the enterprise can in turn allow employees to
see that their own position will become more secure – and that there could even be
opportunities for growth that result from the change.

Extensive exposure to the new system and hands-on training can help make the
unfamiliar familiar, alleviating the anxiety that comes with the transition. Indeed, the
more end-users get to know the inner workings of the new enterprise environment,
the more they will become confident in their abilities, take ownership and become
valuable contributors to your success.

Gain executive support.

Executive support for and involvement in an ERP selection and implementation
project is vital. Executives are responsible for creating a vision for success, motivating
the project team, procuring necessary resources, and making high-level decisions
based on team recommendations. An ERP project without active executive support
and involvement can quickly founder. Moreover, without very visible executive sup-
port, it is common to experience more resistance to the new systems and processes
that end-users are faced with.

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In cases when an ERP system is being considered before C-suite occupants have
bought in, you may want to consider conducting a business case analysis to deter-
mine the expected return from the project. Armed with defensible data on the bene-
fits of the project, it is a lot easier to sell bottom-line-oriented execs. If you lack the
capacity to conduct an analysis internally, external consulting organizations can assist
with this task. The results of the business case analysis should provide executives
with solid data that they can leverage for decision making. If anything, outsourcing
the business case analysis may be regarded as more objective than an analysis con-
ducted internally.

Bottom line – an ERP project without executive support will:

z Likely not address the strategic needs of the company not only now, but into
the future. More junior managers are often not privy to the long-term plans
that an ERP system that can have a lifecycle of decades must be prepared to
address.
z Often be starved for resources. An enterprise IT project is not a one-time
expense, but represents an ongoing investment. The implementation itself
can take months, and years after that additional functionality can be added.
If at any point during that time executive support is soft, the entire project is
in jeopardy.
z Miss the mark in terms of the strategic needs of the company. IT
professionals and line managers are focused on their own functional areas.
While middle managers are busy working IN the business, it is the job of
senior management to work ON the business. That is why the C-suite
residents need to be in on the ERP implementation process.

Budget dollars and people.

The licensing, implementation and maintenance fees involved in an ERP project
are only part of the true cost. Yes, it is important to establish a budget for these hard
costs. But it is probably harder for most organizations to budget the personnel and
expertise to ensure implementation success.

People are probably the most critical and constrained resource in any implemen-
tation process. Success absolutely hinges on involvement of people from each area of
the company, each department and functional discipline that is affected by the proj-
ect. Moreover, not just any departmental or functional representative will do. Your
results will depend largely on the knowledge and experience of the people you can

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devote to the project. Assign people who have a deep understanding of your compa-
ny, its processes and the industry you are working in. If they also have the respect of
others within the organization, that will give them the clout to gather the informa-
tion necessary to inform the planning process. It will also help them influence their
peers to gain acceptance of the solution once it is arrived at.

Once you identify the best people to sit on an implementation team or commit-
tee, it’s time to really bite the bullet. These people will need to commit a substantial
portion of their time to the implementation process right up until go-live. This means
others within the company will have to pick up some of their work load, and it may
be necessary to bring in temporary or contract employees to pick up the slack.

There is one member of the team who almost by definition must devote their
entire efforts to the project. Every team needs a project manager who can lead the
team and ensure they establish a project plan and adhere to it. It is often beneficial to
recruit a project manager from outside of the organization in order to find the right
mix of talents.

Success is simple!
Achieving success in your ERP implementation will be the result of choosing the
right application, surrounding yourself with the best people and making decisions
that are informed by common sense and the experiences of the thousands of other
companies that have gone before you. Just remember that everyone from the applica-
tion vendor to the implementation consultant is trying to sell you something, and it
is up to you to perform the due diligence to make sure what they are saying is true
and that selecting their products or services is in the best interest of you and your
company. The more you immerse yourself in the process and the more questions you
ask, the better results you will achieve.

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Michael Hawksworth brings over 28 years of experience providing clients with information systems consult-
ing services as the Chief Executive Officer at MSS Technologies, Inc. He was co-founder and President of
Micon, Inc., started in 1986. Micon, Inc. provided information systems services to the electric and gas utility
industry. Under his direction, Micon, Inc. grew to an Inc. 500 company in 1991. MSS Technologies was
spun-off from Micon in June 1992 with Mr. Hawksworth as President, becoming an independent and sepa-
rate entity focused on providing cost effective business application solutions, including ERP implementa-
tions, to mid-market companies. Michael started his information systems consulting career with Arthur
Andersen & Co.’s Management Information Consulting Division, now Accenture, after receiving a
Bachelor of Science degree in Computer Information Systems from Arizona State University in 1979.

About MSS Technologies

MSS Technologies, Inc. is a leading provider of business application solutions in
the western states. For over 18 years, MSS has helped small and mid-sized companies
manage their business processes by applying the proper technology to them.

MSS is a full-service provider of business application consulting services ranging

from strategic IT planning projects to the implementation of Enterprise Resource
Planning (ERP), Customer Relationship Management (CRM), Supply Chain
Management (SCM), Knowledge Management (KM), and e-Commerce solutions.

MSS differs from other consulting organizations because we believe in empower-

ing our customers during the implementation process. We collaborate with and edu-
cate our clients about ERP during the implantation process in order to reduce your
cost, increase ROI, and increase you understanding of how ERP can be adapted to
your needs in order to facilitate self-sufficiency and ownership independence.
For more information, go to www.msstech.com.

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 About IFS
IFS, the global enterprise applications company, provides solutions that
enable organizations to respond quickly to market changes, allowing
resources to be used in a more agile way to achieve better business per-
formance and competitive advantage.
IFS was founded in 1983 and now has 2,600 employees worldwide.
IFS has pioneered component-based enterprise resources planning (ERP)
software with IFS Applications™, now in its seventh generation. IFS’
component architecture provides solutions that are easier to implement,
run, and upgrade. IFS Applications is available in 54 countries, in 20
languages.
IFS Applications provides extended ERP functionality, including
supply chain management (SCM); enterprise asset management (EAM);
maintenance, repair, and overhaul (MRO); product lifecycle management
(PLM); customer relationship management (CRM); and corporate per-
formance management (CPM) capabilities.
IFS has over 500,000 users across seven key vertical sectors: aerospace &
defense, automotive, high-tech, industrial manufacturing, process
industries, construction & facilities management, and utilities & telecom.
IFS also provides a cross-industry solution for retail & wholesale
distribution.

More details can be found at www.ifsworld.com. For further information

e-mail info@IFSWORLD.com

www.IFSWORLD.com

This support offer has been made in order to respond to the requirements of IFS’ customers.
Since the customers’ requirements may be different in some markets, variations of this offer may exist.

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respective owners. The example companies, organizations, products, domain names, email addresses, logos, people and events depicted herein are fictitious.
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Such statements of future functionality are for information purposes only and should not be interpreted as any commitment or representation.

©2007 IFS