During my many years in ERP implementation, I have observed this. Many companies approach ERP Implementation from a project mindset, not with a transformational vision.
What is the difference?
Project mindset asks the question ‘How do I complete this project’. This mindset comes from the word ‘Project’ itself which evokes the idea of constructing a building or a mall or a new product. The goal is to erect that construction or deliver the product.
Project mindset ooks at schedule, time and cost. The focus is always short-term.
A vision mindset is different. It looks at usage and benefits. How are we going to use it? Will it add to the workload of our employees? Will it improve my company performance, will it automate the processes and help my company achieve quick RoI, will it lower my overall costs…
But we know this already. Thousands of manhours have been devoted to this subject.
But even today, 30 years after Gartner coined the term ‘Enterprise Resources Planning’, ERP implementations struggle to deliver. Why?
There could be many reasons. Here is one perspective that hopefully adds to the discussion
The two stakeholders in any project are Implementation Partner (IP) and the customer. Most of the projects are driven by the IP who has a ‘Project Mindset’.
Let me illustrate this with an example.
Question from customer: How do I enter and approve an invoice in Oracle Fusion?
Implementation Partner with a Project Mindset will suggest as follows.
You manually enter it in AP, validate it and send it for approval. Once it is approved, enter manual payments and when the statement comes, upload it manually in Cash application and do manual reconciliation. Regularly run process to ‘Create Accounting’ and account for the transactions – both invoices, payments and reconciliation.
This is the solution implemented in 99% of ERP projects. Whatever may be the product. Oracle Fusion is just an example since I work in that area.
This is project mindset. Focus is on getting the work done but doesn’t really add any value. Customer just moves from one horse to another. The key stakeholders are spending time on data entry and not on improving controls, handling exceptions, lowering costs or improving relationships with their key vendors. None in the company adds any value to anything.
How this requirement does looks from a Vision mindset?
You automatically import the invoice into Fusion, do a basic verification and put on a manual hold. A hold notification will be sent to a user who will do the final verification and releases the hold. A scheduled program will send the eligible invoices for approval, another scheduled program will account these invoices and a third scheduled program will create a payment batch. Once the payment is approved, the payment file will be automatically sent to bank. Once the payment is done, bank will send the statement and same can be automatically uploaded in Fusion and automatically reconciled.
Notice how the vision mindset lowers data entry and reduces the load on key users enabling them to focus on what is important for the company like improving cashflow, reducing working capital and strengthening vendor relationships.
But, as I said above, this doesn’t happen in 99% of ERP implementations
Why don’t this happen? Why don’t ERP implementations focus on ‘Vision’?
There are two reasons.
First, the vision of paperless organization, process streamlining or long-term ease of business process do not percolate down to the end user. End user focus is on ‘how they can do their current process in ERP’ and not ‘how they can do their current process BETTER in ERP’. They want to know how they can enter invoices in the system rather than how to automate invoice entry.
No one has told them to ask these questions.
Second reason is the overt pressure put in by the implementation partner. The fact is that every organizations start the projects with a vision mindset, but as the project progresses, the implementation partner converts it to a project mindset. All those weekly reports and steering committee meetings and risks and schedule slippages and change requests and cost escalations simply wear you down.
At some point the goal becomes to ‘Just get this over with somehow’.
That is the sad reality. That is why statistics confuse ‘My ERP Implementation is OK’ with ‘The ERP implementation is successful’
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