Fast ERP implementations – Good idea or bad?

The marketing messages coming from ERP vendors change from time to time, sometimes because their competition has replicated their USP (unique selling point) so they have to offer something different, and sometimes because things didn't pan out as expected and anticipated benefits didn't materialize.

Take SaaS and cloud ERP systems. Initially, the major selling point was that these would be significantly cheaper to implement and operate than traditional on-premise systems but none of the big players in the markets is currently putting out that message (granted, some niche players are, but these are generally selling to a less sophisticated market).

Instead, the message is that cloud-based systems are quicker and easier to implement. Other blogs on this website investigate whether this is true or not, but this one asks a more fundamental question and considers whether fast implementations are a good thing.

As with many aspects of ERP, the answer is not always as obvious as it first appears and companies must consider the evidence carefully to ascertain what is right for them.

In favor of fast ERP implementations

Most companies have heard the saying, “If you leave starting an ERP implementation until you need ERP, you've left it too late”, but many still underestimate the time it takes to go through the process. This is typically a year for a small Tier 3 system through to three, five, or even seven years for a Tier 1 roll-out (these figures assume a full-functionality ERP system and not an accounting system sold as ERP).

So, when companies feel that they need a new system, they frequently want it 'now'. When they start to talk to suppliers, independent consultants, and business partners, realistic timelines emerge and system providers that can claim to be able to offer fast implementations have a real advantage in the sales process.

A second consideration is that even when companies don't have an urgent need for a new system, they will have carried out an exercise to identify how they will benefit from introducing one. Even if it is not a formal ROI calculation, it is indisputable that the sooner the advantages kick in, the better.

Turning that around slightly, implementing a new system can be painful and many would argue that, with fast implementation, the pain is over quicker! Regardless of how the project goes, even one year is a long time so the faster the system goes in, the less chance of enthusiasm burn-out.

And in the case of Tier 1 implementations taking three to five years or more, there is a real risk of the project losing direction as team members move on and have to be replaced, and perhaps also as new management arrives with differing objectives and priorities.

A quick implementation reduces those risks and also sometimes (but not always) reduces consultancy costs simply by having consultants around for less time. A final thought is that most companies that buy ERP systems are not in the business of implementing ERP, and usually feel that the sooner that they can complete the task, the sooner they can focus fully on the core aspects of their business.

The down-sides of fast ERP implementations

Implementing ERP well takes time. The four most time-consuming tasks are generally:

• Documenting what the new system has to do and achieve so that requirements can be checked for completeness and accuracy, and competing systems can be objectively compared
• Carrying out a 'gap analysis' on the chosen system to identify where it is less than a 100% fit (no system is a 100% fit) and then developing ways of working that mitigate or minimize those weaknesses
• Cleansing existing data and compiling and checking any new data that might be required to service new functionality
• Training end-users and verifying their understanding and competency before go-live

Going for a quick implementation encourages companies to stick as closely to 'as-is' as possible and is sometimes justified by declaring, “If it ain't broke, don't fix it”. The opportunity to take stock of where the company is, and where it wants to be in the future, is ignored because doing so takes time.

Likewise, new functionality and new opportunities that new systems offer are not investigated and evaluated lest doing so delays matters. (Ironically, many of the companies that adopt this approach later complain that they have seen little benefit from moving to a 'new' system!)

Another regular reason for quick implementations is to reduce consultancy time (and it is certainly true that the longer external consultants are on site, the more opportunity they have to identify extra work that they should be doing!) but, when this was discussed as a 'plus point', it was hinted that shorter projects don't always result in reduced consultancy costs.

The problem is that to deliver a fast implementation, vendors and system integrators often make a case for bringing in extra consultants to get the work done faster, and big teams of consultants are harder to monitor and manage than small teams, so customers don't always get value for money.

One last danger that companies need to be aware of is that fixation on a date can lead to going live prematurely: e.g. going live with insufficient training and testing (of software, procedures, and people). Additionally, data may not be properly cleansed and new data to support new functionality may not have been configured properly because the people responsible for compiling it had to start doing so before they fully understood how it was going to be used.

So, yes: fast implementations are possible but need to be planned and managed very carefully and companies need to remember that the big tasks in an ERP implementation are:

• Understanding the strengths and weaknesses of the chosen system and developing or modifying ways of working to cope
• Compiling and cleansing data
• Training end-users

They then need to ask themselves which of those tasks they feel comfortable cutting back on.