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ERP: Do's and don'ts
This document outlines an agenda for an ERP conference on dos and don'ts. The agenda includes ERP keynotes, case studies on process analysis, software selection, customization vs standard ERP, and data conversion. Tips are provided on typical mistakes made in ERP projects such as not addressing business problems directly and believing software alone can solve issues. The document also discusses challenges of ERP projects, important aspects like change management, and tips for improving live systems through a quick scan, prioritized plan, and step-by-step delivery.
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ERP: Do's and don'ts
- 1. ERP DO’S ANDDON’TS 24 April 2014 Serge Vigoureux Saskia Van Kerckvoorde Dries Van Avermaet Luc Dekimpe Nick Van Maele
- 2. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 process analysis 15’ software selection 15’ standard ERP versus customizing 15’ data conversion 15’ importance of good design (video) 10’ Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 2ERP do’s and don’ts
- 3. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 3ERP do’s and don’ts
- 4. TriFinance | ManagementInformation & Systems 24 April 2014 page 4ERP do’s and don’ts
- 5. ERP key note •ERP projects in real life • Tips & tricks • What if the system is already live? 24 April 2014 page 5ERP do’s and don’ts
- 6. A typical ERPproject Some persistent business problem oops! Sudden issue is wake-up call for action “Need new software! Quick!” “This is the perfect tool” “Let’s go go go!” “No time but IT is working on it.” oops! a few months + a lot of money “This is not what we need.” 24 April 2014 page 6ERP do’s and don’ts
- 7. Typical mistakes Not tacklinga business problem directly Believing that software will solve your problem Software selection without company & IT strategy Software selection without thorough investigation Too little business input Good operational people get massively overloaded with work Some persistent business problem oops! “Need new software! Quick!” “This is the perfect tool” “Let’s go go go!” “No time but IT is working on it.” oops! 24 April 2014 page 7ERP do’s and don’ts
- 8. ERP challenges areharder than they appear DESIGN PROJECT MANAGEMENT unclear priorities translating business to IT solutiontoocomplex ADAPTORGANISATION INTEGRATE PROCESSES RESISTANCE skilllevels breakdownsilos tackling problems at the root underperformers CULTURE data quality workload support LEADERSHIP COMMUNICATION software selection responsibilities incentives testing LINK TO STRATEGYERP EXPERIENCE BUDGET projectduration expectations 24 April 2014 page 8ERP do’s and don’ts
- 9. Important aspects ofERP projects Initiate & Plan Analyse & Design Build & Test Implement Hyper- care Operate & Close Project Management – Governance; Project plan; Budget; Follow-up; Project reporting; Issue management; ... Change Management – Stakeholder dialogue; Communication plan; Buy-in; Resistance; ... Training – Training end users in new mind-set, new processes & new tool(s) Functional – Business expert team; organisation; roles & responsibilities; design; testing; issue escalation; … Systems – Vendor relations; Relating to internal IT team; IT strategy; IT architecture; tools; interfaces; data; ... Support Organisation – Preparing additional support for go-live period Phases Workstreams Reporting – Management reporting needs; impact on design; flexible data models; relating ERP to BI 24 April 2014 page 9ERP do’s and don’ts GO-LIVE
- 10. Tips & tricks •Processes & people first – The system does not solve everything • Business in charge – IT much needed for technical aspects • Realistic budget in Euro / man-days / duration – less people available more workload than you think • Change management – Communication; Dialogue; Involve people • Embedding continuous improvement – Project does not stop at go-live 24 April 2014 page 10ERP do’s and don’ts
- 11. If a livesystem has problems • Do not panic & take it step by step • Step 1 : Quick Scan ~ few days of work – get a specialist to map out all issues – Holistic view: business / people / IT / culture / data / ... • Step 2 : Agree priorities & plan ~ few weeks of work – Priorities mostly from a business perspective – Realistic estimates for the plan ( requires experience) • Step 3 : Deliver step by step – Stabilise each result prior to taking next step 24 April 2014 page 11ERP do’s and don’ts
- 12. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 12ERP do’s and don’ts
- 13. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 process analysis – Saskia Van Kerckvoorde 15’ software selection 15’ standard ERP versus customizing 15’ data conversion 15’ importance of good design (video) 10’ Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 13ERP do’s and don’ts
- 14. Opportunity / problemstatement – The system does not work • How can the system be improved • Do we need another system – We need a system • To move towards automation and reduce the manual interaction and creation of transparency and visibility • Innovation – do more with less 24 April 2014 page 14ERP do’s and don’ts
- 15. Situation description Some facts: •Case 1 : Post-merger integration of 2 SME’s – Construction industry – 2 small organizations merged about 1 year ago – Assessment and optimization of currently used ERP system • Case 2 : Automation of core business process – Facility management industry – 10.000 workers / 300 first-line operations managers – Implement a system that automates core process : sign contract with customer plan and provide services bill customer 24 April 2014 page 15ERP do’s and don’ts
- 16. 24 April 2014page 16ERP do’s and don’ts
- 17. The road tothe solution… • Customers suggested approach – Look at my system and tell me what is the solution • TriFinance approach – Step 1 : Interview some key stakeholders – Step 2 : “As Is” Processes and systems – Step 3 : “To Be” Processes and systems 24 April 2014 page 17ERP do’s and don’ts Interviews As-Is processes & systems To-Be processes & systems Func & tech requirements
- 18. “Do” look atyour system and processes • Why look at your business from a 'systems & processes' point-of-view? • Business runs on systems, systems run through processes • Optimum system performance is nearly impossible with flawed or inefficient processes. “If you can't describe what you are doing as a process, you don't know what you are doing.” W.E. Deming 24 April 2014 page 18ERP do’s and don’ts
- 19. “Do” focus onthe “added value” processes • Conclusions from interviews – Core problem not solely related to systems • Unclear roles and responsibilities • Communication • A lot of rework (inefficiency) – Basis for scope of project and “As Is” • Conclusions and results from “As Is” processes – No standard process across the organization and individualized processes – Unclear roles and responsibilities – Awareness and acceptance of “pain points” and “best practice” – Basis for the “To Be processes” 24 April 2014 page 19ERP do’s and don’ts
- 20. Resulting into “ToBe” processes • “To Be” processes – 6 processes optimized to 2 process flows – Clear roles and responsibilities – Organization wide validation and buy-in – Change Management – Basis for functional and technical system requirements 24 April 2014 page 20ERP do’s and don’ts
- 21. Processes – People- Tools People Process Tools People without process is “action without effectiveness” NOT efficiency Tools enhance efficiency but not effectiveness Processes without people is “paper and ink” 24 April 2014 page 21ERP do’s and don’ts
- 22. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 process analysis 15’ software selection – Luc Dekimpe 15’ standard ERP versus customizing 15’ data conversion 15’ importance of good design (video) 10’ Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 22ERP do’s and don’ts
- 23. Steps in selectiondecision process • Case : semi-public company – existing systems not flexible / lot of customizing – weak reporting / not process driven • Detail of desired improvements as is to be ? • processes • functionalities (e.g. reporting, dimensional structures) • Specified requirements to define and to draft • Important document for blue print once implementation starts 24 April 2014 page 23ERP do’s and don’ts
- 24. Steps in selectiondecision process … Decision criteria Start implementation Assessment offer, references, gaps... Start implementation 24 April 2014 page 24ERP do’s and don’ts Functional & Technical Requirements Request for Proposal (RfP) First offer Discussion & negotiation Best And Final Offer (BAFO) Proof of Concept demo (PoC) Decision Start implementation Design …
- 25. Selection criteria forpartner and software • references (check, relevancy, feed-back) • proposed implementation and project plan – (days, approach, impact internal organization, team software provider ...) • licence granularity • licence price and maintenance fee • implementation fees (consultancy) • impact on internal IT • degree of customizing versus standard functionalities • reliability of partner • ... 24 April 2014 page 25ERP do’s and don’ts
- 26. Proof of Concept(PoC) • Always include a Proof of Concept (PoC) scenario in RfP – proof of concept test should last +/- 4 hours – keep master data simple / focus on core processes – describe clearly and step by step the transactions you want to ‘see’ based on well defined data – all participants evaluate PoC at end of session – materiality is crucial in PoC 24 April 2014 page 26ERP do’s and don’ts
- 27. Proof of Concept(PoC) • Make score card to evaluate the PoC outcome – by topic / domain – with weight importance by domain and topic – separate input from every participant global consensus • PoC gives flavour of expertise and skills of implementation partner 24 April 2014 page 27ERP do’s and don’ts
- 28. Example score cardPoC 150 113,2 PoC gewicht van de geteste items 75% Weging Score Criteria # X op 10 20 15,3 1. Demo kwaliteit 11 84 Dit betekent : 84/110 = 76% 13% 76% Opbouw van de PoC demo 2 8 Software Expertise van het presentatie team 3 7 Funktionele POC expertise van presentatie team 2 6 Integriteit en attitude 1 10 Tijdsduur 1 9 Inhoudelijke kwaliteit 2 8 30 22,3 2. Gebruiksvriendelijkheid 7 52 20% 74% 65 49,5 3. Funktionaliteiten 26 198 Verwijzing naar RFP 43% 76% 20 15,6 4. Technisch 5 39 Verwijzing naar RFP 13% 78% 15 10,5 5. Lastenboek compliance 6 42 10% 70% 24 April 2014 page 28ERP do’s and don’ts
- 29. How to scoreBAFO • PoC: use score card • Scoring price: lowest offer = 100 = max points • Scoring project plan, references, … : use appreciation level +++ / ++ / + / = / - / - - / - - - points depend on weight of criteria 24 April 2014 page 29ERP do’s and don’ts
- 30. How to scoreBAFO • each selection element has % impact on total score POC PRICE licences PRICE implementation REFERENCES PROJECT PLAN OTHER... Example : 24 April 2014 page 30ERP do’s and don’ts
- 31. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 process analysis 15’ software selection 15’ standard vs customizing – Dries Van Avermaet 15’ data conversion 15’ importance of good design (video) 10’ Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 31ERP do’s and don’ts
- 32. Customizing versus standard… •Difficult decision to make in any ERP system implementation • Most customizing decisions are being made under time pressure after or late in the design phase not a well thought-through decision • Best practice is to identify gaps during demo or design phase – business needs standard functionality available • For changes after Design phase: install change request process! • Not all customizing is bad… but usually a standard solution is possible 24 April 2014 page 32ERP do’s and don’ts
- 33. Make cost-benefit analysis •Customizing = significant impact on short and long term • Resist making decisions under time pressure • Make cost-benefit analysis with IT and business elements Benefits: – Process efficiency and elimination of manual (re)work – Shift from transactional actions to value added actions – Increased management reporting transparency Costs : – Development, test and possible rework (do not underestimate!) – Maintenance and/or rework during future system upgrades 24 April 2014 page 33ERP do’s and don’ts
- 34. Case – textileproduction automation (1/3) • Multinational production company implementing a global ERP in Belgium and China • During design phase became clear that the standard ERP production functionality did not fully cover the different business needs from sales, management reporting and production quality control : – Business specific decision logic for end product quality could not be covered in the ERP – High number of system transactions had important impact on costs and could lead to increased financial risks 24 April 2014 page 34ERP do’s and don’ts
- 35. Case – textileproduction automation (2/3) • Approach taken was to integrate all different business needs in an integrated customized solution, based on the standard ERP functionality : – Triggered by standard confirmation system transaction – Automated algorithm to decide on product quality based on product classifications and parameters – Automatic downgrading and material transfer postings of inferior quality products (and related financial consequences) • Main benefits : – Production process automation and elimination of manual errors – Business logic embedded in system – Increased financial transparency on sales margins 24 April 2014 page 35ERP do’s and don’ts
- 36. Case – textileproduction automation (3/3) • Decision to customize was taken based on the positive cost-benefit analysis • A phased approach was taken • Phase 1: – Customized solution being developed and tested in Belgium – In parallel, the china companies were implemented on the standard ERP flows. This allowed the organisation to gain experience with the new system • Phase 2 - planned: – Customized solution will be rolled out in China after implementation in Belgium 24 April 2014 page 36ERP do’s and don’ts
- 37. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 process analysis 15’ software selection 15’ standard ERP versus customizing 15’ data conversion – Nick Van Maele 15’ importance of good design (video) 10’ Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 37ERP do’s and don’ts
- 38. Data conversion challenges Initiate& Plan • Underestimating required budget & resources for data Design • Not seeing that 20% exceptions will be 80% of problems (costs) Build & Test • A lot of other work next to cleansing – who will do it? • Do cleaners understand what is required? • Dummy test data & training data are also needed… • Sheer workload of cleansing Implement • Data have changed: re-convert everything quickly and correctly • Sequence of loading data • What if data do not load? Plan B? • Who has time to load and solve errors? Hypercare • Who is checking operational data quality? • Keeping up with demand for master data creation 24 April 2014 page 38ERP do’s and don’ts
- 39. Some real lifestories… • Marcel on a Friday afternoon • Could you come help us with the go-live? • What is a customer? 24 April 2014 page 39ERP do’s and don’ts
- 40. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 process analysis 15’ software selection 15’ standard ERP versus customizing 15’ data conversion 15’ importance of design – Troyka Vervaeke 10’ Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 40ERP do’s and don’ts
- 41. Importance of gooddesign Troyka Vervaeke, Finance manager, Vlerick Business School testimonal Troyka Vervaecke 24 April 2014 page 41ERP do’s and don’ts
- 42. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 Q & A 10:10 – 10:30 Reception 10:30 - … 24 April 2014 page 42ERP do’s and don’ts
- 43. contact details serge.vigoureux@trifinance.be TriFinance DirectorMI&S - Management Information & Systems www.trifinance.be TriFinance controllers community 24 April 2014 page 43ERP do’s and don’ts
- 44. Agenda ERP key notes08:30 – 09:00 Case studies 09:00 – 10:10 Q & A 10:10 – 10:30 Reception 10:30 – … 24 April 2014 page 44ERP do’s and don’ts
- 45. Thank you Speakers Troyka Vervaeke– Finance Manager, Vlerick Business School Saskia Van Kerckvoorde – MI&S Manager, TriFinance Dries Van Avermaet – MI&S Manager, TriFinance Luc Dekimpe – MI&S Manager, TriFinance Nick Van Maele – MI&S Manager, TriFinance 24 April 2014 page 45ERP do’s and don’ts