Prioritize your focus areas for best benefits from your ERP

In one of the recent meetings with a group of CIOs, I heard this loud and clear from more than a handful CIOs that though they have implemented ERP and have waited for couple of years to stabilize the processes but still the expected benefits have not been able to impress them as well as the CEOs. Going into details, one common thread that came out from all of them was their extra wide focus areas. When asked about in which area, the results were far from satisfactory or which areas you were focusing on get the low hanging fruits first and then aim for the higher ones, the reply that I got is that they focused on getting all the benefits and have taken quite a good amount of initiatives to make them happen with the help of ERP. Quite a decent strategy! But then, why they are still unhappy or rather I should say less satisfied? Is it the ERP as product or their processes or the expectations or something else?

Together we tried to go deep into it and picked couple of cases from the group and the findings were enlightening. Though I will not be able to share the name of the organizations, CIO names or the exact findings but I would like to share the strategy that came out after this post mortem of their existing strategies which left them less satisfied with their ERP deployment. The clear cut strategy was multifold, but it was suggesting in more than one ways that instead of firing bullets in all directions, the focus should be on fewer directions and in phases. Say for example, a typical organization wants following benefits after ERP implementation at their end:
  • Cost reduction due to process standardization, automation, improved end to end visibility etc.
  • Improved working capital due to lower and accurate inventories, less obsolescence/scrap etc, better payment terms etc.
  • Better customer satisfaction due to improved on-time delivery, communication/response time, perfect order fulfillment etc.
  • Effective strategic decisions by executives due to crystal clear MIS, reporting etc.
  • Improved compliance due to process controls, monitoring etc.
  • Higher collaboration between teams, with suppliers, with customers etc. increasing efficiencies and reducing cost of operation
  • Improved staff efficiencies due to smaller period closing activities, automation etc.
  • Finally single source of truth for everybody to benchmark and plan accordingly
There will be many other benefits an organization can get but the objective of listing some of them above is that if we start focusing on everything from the start, there are chances that we are not able to do justice with all of them and lose steam on some of them or even all of them when our patience runs out. A larger group has always less patience and tiny but focused groups with smaller milestones will always have higher success rate.

So the strategy here should be that we need to prioritize our focus areas in such a way that we pick some of the critical ones along with the few low hanging fruits in the first phase - implement your action plans and then move on the next phase with a similar combination of focus areas. With this, I do not mean that you should take business functions or modules one by one (that is a different discussion altogether) but the intent of the strategy is to pick your result areas after implementing the ERP and keep on improving the processes, putting controls, automating it further, complementing them with BPM solutions etc. to make them ready to reap benefits and then move to the next batch. The batches can also overlap for some time looking at the available bandwidth of team.

The group of CIOs jointly took a decision to re-look at their ERP deployments and identify the areas of focus to give a new try to reap the benefits and you also might want to try out this simple but effective strategy. Best of Luck!

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