How to Make Software Implementations Work

By Guest Blogger Linda Ballard

What would happen if six months into an integrated software solution for your organization, you realize there is no one person within your company that has a handle on the entire project?

Is a new ERP (Enterprise Resource Planning) software solution a good idea for your company? If you have been operating a midsize or larger company on several different legacy systems, you and your organization are a good candidate for streamlining the business. As an experienced implementation specialist, I know firsthand how challenging it can be to remain current with ever-evolving computer software without sacrificing time, money, and customer service.

In order to successfully evaluate, choose and implement software, it would serve the organization well for the administrators, and employees to keep well informed about software technology. They can stay well versed by reading periodicals, attending software training courses and going to seminars. It is important to provide training for your employees whether they attend a traditional classroom or participate in a state of the art on-line course. Most companies do not have the financial resources to hire a full time MIS (Management Information Systems), manager, even though in the end it may be worth the cost to the organization.

It is very important to remain current with new versions and releases of your company’s manufacturing software and technology. I am obligated to say that several large organizations find it problematic to upgrade if there has been countless customizations to the current system. It is vital when considering a new software solution to consider how much customization is needed for the new software to work optimally. Making changes to the user interface is not as tricky as trying to change the business logic. It is important to understand the difference.

Project Planning is Key
One of the leading causes of failed implementations is managers not taking the necessary time to assemble the right combination of team players on the front end of the software project.

Therefore, when developing a management team it is important to equip the project workgroup with highly trained project managers along with a group of compatible individuals to manage your selection project. By performing some preliminary work and taking the necessary steps, you can avoid some of the pitfalls of an implementation disaster. One step you can take is to involve mid-management and include division and department functional leaders from the start of the project. There are good reasons for building a team from the top management level to the lower level managers. First, subordinate managers usually possess greater expertise in determining the right computer software for your organization. Mid managers will help the CEO and top executives look beyond the sales presentation given by the software vendor, and can aid in researching the software vendor’s record of successes (or failures!).

I have been part of project teams where the implementations foundered because all key information was locked into information silos which were closely guarded by certain departments that never shared their data and processes with other departments. Thus both horizontal and vertical communication channels are needed.

Take a Collaborative Approach
Top Management often falsely assumes that they can influence and control employee behavior through formal authority. This is a mistake! In order to increase respect and cooperation of the project team use a collaborative approach rather than wielding orders, and demanding compliance. A frequent cause of software is subtle sabotage by mid-level managers or operating personnel because they were left out of the decision making process. Even the best of employees wont be inclined to support a new and complex software implementation without feeling that their input is valued. Although subordinates may appear to accept the demands made by upper management, they may undermine the project by putting their personal stamp on how things are done according to what they deem is the best way to do it.

I have worked with companies where the implementation stalls and ends up costing the organization hundreds of thousands of dollars. This happens because there is a disconnect between the project team members who are responsible for learning and operating the software and the company executives. In order to secure an enthusiastic team, the top managers must set aside their egos. Once managers set aside power, and status, they will have an easier time engaging the team.

Tie in Business Goals
A second major pitfall is that company executives and sponsors do not schedule the time to understand what implementing the software might do to help meet business goals that can lead to improved products, customer service and overall customer satisfaction. Not only should the decision makers spend time on scrutinizing the company’s software system needs and forming a solid implementation team, but time should also be devoted to developing a well thought out strategy that leads to best practice processes to be followed with the new system.

While there are several implementation models in force, it’s best to keep things here is a suggested, simple, four-stage approach. This includes

1. Strategy and Planning to identify the business problems to resolve, organize the project, engage the team and installing the software.
2. Analysis and Design- this is the discovery phase where the project scope is defined, data transfer issues are discussed and defined, and where to draw the line on customization and integration issues.
3. Implementation readiness and cutover.
4. Execution of the plan. I would suggest that for most implementations the project team spend the majority of their time during the Analysis and Design Stage because this is where the difficult but critical decisions are made that will determine the ultimate success of the project.

Due to the typical flat organizations to be found today, resources and time to manage a software project are going to be limited. Thus it is tempting to avoid some of the tougher decisions that take time and that middle management should make that affect how the system should be set up and operated. Instead, they assume that those issues will be resolved with the vendor team during implementation which is a sure way to have everything bog down. Some obvious but crucially important items are such things as how they want to design inventory code going forward and the use of part classes, product groups, and how backflushing should be done.

These kinds of decisions should be thought about before choosing software to help determine which product(s) are most suitable for how they want things done. Doing this before selecting a system will help insure that it is the right fit for the company. It very likely will save implementation time as well as cost.

In order to find the right software provider for your company keep in mind that each ERP software package has known strengths and weakness. Perform a SWOT (strengths, weaknesses, opportunities and threats) analysis. What is tried and true? The financial modules are generally the same from one software system to another, however; most financial modules are limited to creating transactions for posting to the general ledger. In order to complete month-end or quarter-end financial statements and data analysis, often requires third party software to design and maintain the company’s financial reports. One such financial reporting software is FRx (or Crystal Reports) , which is integrated with the general ledger. Financial modules are improving, but there is not much room for originality. Whether paying an invoice, entering cash receipts, or calculating financial statements, accounting is fairly straightforward.

On the other-hand, managing a company’s projects (jobs), determining an accurate inventory, and scheduling the work force is another story. There is no one ERP software package out of the box that will provide everything needed to run a business. Typically, it is difficult to anticipate the complexity of scheduling of jobs, forecasting, and finding the right mix for job engineering. For example, I once worked with a client who wanted to use a product configurator to set up bills of materials (BOMs) and route new parts. They wanted the configurator to achieve rapid part creation by the engineering group. However, no thought was given to how this could slow system performance.. Unfortunately, what might seem like a faster way to accomplish a part master file and part families, ended in considerable frustration for the end-user because of wait time while the system went through the calculations for creating the new configured Bill of Materials.

Another tireless issue is data warehousing, and deciding how to store information. Oftentimes a company will find workarounds for complex MOM (materials of manufacturing) solutions, and whether to make to order or make to stock. Once the job is completed, and the order has been shipped, what about document storage? How long do you want to keep quotes, sales orders, and invoices in the current files and at what point do you archive them to a data warehouse? And, once archived, how will the information be efficiently accessed?

The Conference Room Pilot
This is the project phase which separates seat of the pants operations from true professionals. It involves the entire project team but must be led, motivated and managed by a true software professional, and functional heads. A smaller organization may be able to get away without it but any company which is $20M or larger would be foolhardy to skip this step.

The conference room pilot is guided by the Project Manager, and Implementation Specialist to run through various scenarios on a Test DataBase which is created for the express purpose of testing the software. It contains the primary master file information files needed for customer (e.g. quotes, orders , parts, vendors, purchase orders, and anything else that is impacted by the company operations). Test data, with all exception conditions, are prepared by managers along with operations staff to check out exactly how the system performs vis a vis their specific workflows. Usually this is done by individual segments, (Areas of Business) for example Quote to Cash.

1. Go through all the steps to enter a quote
2. Turn the quote into a sales order
3. Ship the order to the customer
4. Invoice the customer when the shipment goes out the door
5. Receive payment on the invoice

This is the time when things will come to light that had not been thought of before, or when actual bugs or shortcomings in the system will surface. ERP systems are so complex that it is almost impossible to get everything right from the start. And a Business Simulation or a Test run will help everyone understand where there may be gaps. There is usually more than one. They are called CRPs you may have one or two and a final before going live.

This process will typically rattle some nerves but better to find the gaps and learn how to work through them before you sign the contract! You may even find that in order to meet the necessary functional requirements you have to compromise the system’s integrity with too much customization. If that happens, stop and consider if you are making the best decision for the overall good of the business.

Staff Competence
One priority before considering purchasing a high-end software solution for your company is to assess the workforce’s technical expertise and current capabilities. Patience is required to identify the company’s internal business champions, or “super users.” A company needs at least one internal champion, a person that brings positive energy to the table, and paves the way for a successful implementation. The super user recognizes the need for change and has the best interest of the organization in mind. According to Ron Kurtis (School for Champions, 2004) there are five “powers of a champion” that must be adhered to. They are; health, knowledge, excellence, value and character. To cultivate your company’s business champion, seek out those employees, who are always willing to take on the difficult tasks, and display an outstanding ability to motivate others.

Vendor Curve Balls
In addition to internal advocates, I have seen outside software companies and consultants rush to make the sale without thoroughly taking the time to understand the company’s business. This results in the software vendor’s professional services organization becoming overextended and frustrating all parties due to cost overruns and missing scheduled completion.

There probably is no worse trauma an organization can go through than trying to install software and running into endless brick walls because proper planning had been done. It is not unheard for companies to spend into six figures for a manufacturing ERP system and never use it for anything but financial accounting that could have been done with $5K software.

A few years ago I was involved with a company who purchased software on the premise that a third party consultant who knew the system they were purchasing had expertise in their industry (which happened to be sign manufacturing). He didn’t.

In the end the third party consultant did not understand the unique aspects of the sign industry and it prolonged the planning phase. This caused the customer to lose confidence in our product. The customer was desperately trying to establish best practices for their organization. What they were looking for, was an implementation team who could demonstrate leadership, create team spirit and who would pave the way for sustainable growth. What they got did not match up with their expectations. What we learned from this is never try to cut corners by providing the wrong guidance and recommendation to the customer.

In closing, at a time when change is fast, powerful, and relentless, when the flow of information is overwhelming, and when anything seems possible, it is more important to do what is really needed to meet the business requirements, (or the requirements to successfully and efficiently run the business) than to try to implement something just because it looks good, or the competition is doing it that way. You will never reach your implementation goals, if you try to accomplish everything at once. I recommend breaking things down into manageable segments. Your challenge is to understand the reasons behind making a decision for a particular software solution and that it fits the needs of the organization.

Finally, prioritize, and prioritize again until you have full buy-in from management on the absolutely crucial, must-have functions for your organization to be successful – now and for the foreseeable future and be certain the software you choose can accomplish those tasks without a shadow of a doubt!

1. Ron Kurtus’, School for Champions, (2004) www.school-for-champions.com

About the Author
Linda Ballard MBA has extensive experience in both manufacturing and construction and has been a Project Manager and Training Manager for a leading mid-market ERP vendor. She can be reached at linda.ballard878@gmail.com.

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