In this blog series, we’ve been exploring three key ideas for organisations to get the most from their ERP transformation (customer-centricity, building from firm foundations, and iterative delivery). In this blog we explore how the first two of those ideas come to life during the critical discovery phase of the ERP transformation.
Under-investment in discovery is common as organisations drive towards vendor selection. Such organisations assume that this drive will lead to faster adoption by fulfilling requirements earlier. In our experience, the under-investment in discovery is a false economy. It can lead to problems later in ERP transformation, such as go-live delays, change management blockers and difficulties integrating with existing systems infrastructure. Diligent discovery is the firm foundation on which a more successful ERP transformation can be built.
Good discovery starts with the customer, so that the transformation avoids the common trap of becoming technology led. Balanced consideration of people, process and technology, guided by this customer-centricity, maintains a focus on the link between the ERP, the organisation and its customers. In the absence of this balance, technology modernisation can make end users resistive or worrisome for reasons such as headcount reduction, role changes, and process changes, which are all examples of common concerns that employees are likely to suffer during an ERP replacement.
Avoiding the technology-led trap in this way means that hidden people and process costs of the ERP transformation can be accounted for in the discovery phase. The overall costs to serve are reduced by starting with the customer, and prioritising scenarios that enable employees to best use technology to serve those customers. It is important to involve key stakeholders who understand the end-to-end processes and customer touchpoints, to truly integrate requirements into the overall ERP. Such an approach is only possible when it involves employees from across the organisation. Cross-functional working has the ancillary benefit of driving buy-in and reducing rework post go-live.
So, what is the right balance between technology, people and process for ERP discovery? To begin, be guided by the functionality that delivers customer value, and no more. By focusing on the non-negotiable ERP requirements, the technology focus of the ERP transformation is toned down, with the added benefit of reducing spend on unnecessary functionality. Apply the Pareto principle to identify the ‘20%’ of functionality that satisfies ‘80%’ of customer requirements. In this way, investment in functionality that costs far more than the benefits it delivers, is minimised.
Does good ERP discovery stop at striking a balance between technology, people and process? Not quite. ERP transformations are lengthy; therefore if requirements are defined based on customer desires at the beginning, by completion, the customer value delivered by the ERP will not meet its full potential. Customer desires can change, and the rate of change in the world is accelerating; what a customer wants today does not guarantee that desire long-term.
These changing customer desires mean that ERP discovery cannot be purely tactical. An ERP should also consider broader strategic goals such as resilience and business growth. Specifically, a coherent business strategy should define what subset of customer desires the business will satisfy over the long term, so the ERP discovery must reference this.
To summarise, it is best to begin ERP discovery with tactical customer centricity, and to end with executive-led decision making to meet strategic goals and future demands. This way, good ERP discovery remains true to the original requirements of the business and customer. A dedicated team working across functions with representatives from both the leadership team and the end-users balances tactical imperatives with strategic ERP transformation goals. This inevitably enables a greater realisation of benefits during the delivery of the ERP.
So far in our blog series, we have identified three key ideas for a successful ERP transformation: we have illustrated the value of customer-centricity; and here we explored the need for good ERP discovery. In our next blog we discuss the value in delivering incrementally and iteratively, and how an agile approach can help to avoid the common pitfalls of ERP execution.
Other blogs in this series
How not to overspend and under-deliver your ERP
The value of focussing your ERP transformation on your customers
