Question: The ERP / CRM promises never materialized. Why?

Answer: Here are some reasons:

  • Unrealistic expectations: Sometimes we show "irrational exuberance" with our projections of the benefits from big-ticket items. ERP / CRM was presented as a panacea. There's no better way to shoot oneself in the foot than to "over-promise and under-deliver".
  • Lack of business sponsorship: Business sponsorship and active participation is critical to the success of all major business initiatives. ERP /CRN are business initiatives NOT IT initiatives / projects.
  • Customization: You spend months to find the "right software" only to start changing it on "day one."
  • Ankle-deep analysis: We overlook key aspects of IT investments:
    • How much will we make or save; i.e. what is the ROI?
    • How does this affect the organization? Training, change management, etc., are critical to success.
    • How does this provide strategic advantage?
      • If our competitors have the same package, where is our competitive differentiation? 
      • If our processes have to fit the package, where's the benefit in reengineering? 
      • If the package has to be customized to fit the reengineered processes, where's the cost, risk, and timing advantage from buying off the shelf?
  • Lack of monitoring and control: Very little effort is put into designing the process and metrics used to measure results. Consequently, bad implementations continue far beyond their cut-off points. 
  • Lack of Training: Successful ERP / CRM implementations invest 30% of the project funds on training and very few successful projects have utilized "train the trainer" concept.
  • Big-bang implementations: ERP / CRM implementation in a running organization can be like changing engines on an airplane--mid-flight! Needless to say, change is best accomplished one step at a time.
  • Over dependence on consultants: Lack of internal expertise leads to mega-dollar consulting deals that don't produce results for the clients. There needs to be a fit costs results driven leader who does this more than once in a career.

Ways To Avoid Mistakes
Here are some ways to avoid these mistakes:

  • Insist on business sponsorship: Forge long-term relationships with the business. Design processes that cross the business/IT boundary from strategy to implementation and beyond. 
  • Cancel your membership in the "flavor of the month" club: IT exists to enable business results. If there's no direct correlation between the latest, greatest technology and your business model, leave the technology alone. 
  • Use a portfolio-based approach: Like personal investments, IT investments are best managed as a portfolio. 
  • Monitor and correct: Measure results and, when appropriate, change course. Note the key milestones along the way. When you reach them, reconfirm the "go/no go" decision. 
  • Choose your partners wisely:
    • Choose consulting firm based on their results, fixed costs, capability and integrity. 
    • Divide the work to avoid "conflict of interest" never hire the same firm as strategist, package selector, and implementer. 
    • Use gain-sharing to inspire everyone on the project to be honest, eager, and hungry to succeed.

 

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