Within the ERP industry, there is no universally accepted glossary of terms for system implementation strategies,...
By submitting your email address, you agree to receive emails regarding relevant topic offers from TechTarget and its partners. You can withdraw your consent at any time. Contact TechTarget at 275 Grove Street, Newton, MA.
and there probably never will be. But, in general, two ends of the ERP deployment spectrum are recognized: the traditional and the rapid deployment approach.
While both ERP deployment approaches employ commonly used project management practices, it is the degree and emphasis placed on these practices that set the methodologies apart. As a result, each has its own advantages and disadvantages, and each introduces different types of ERP implementation project risks.
ERP rapid deployment
The concept of rapid deployment evolved to address two long-standing problems: ERP implementation takes too long and costs too much. In its purest sense, rapid deployment focuses on compressing the project timeline with the following strategies:
- The need to expedite decision making and issue resolution. On many projects, valuable time is wasted in these areas.
- Relying on industry-specific preconfigured templates to drive the majority of the software setup. This supports the use of best business practices and reduces the time to set up the system.
- Minimizing the project scope. This is accomplished by eliminating or reducing the time spent on implementation activities not directly related to software setup, testing and system cutover. These scaled-back activities may include formal project team software training, process analysis, design documentation and custom software development of any kind.
- Using a high concentration of consulting resources. However, the shorter project duration may reduce overall consulting costs.
Rapid deployment risks
With the focus on the schedule and outside consultants doing most of the work, rapid ERP deployment might actually cost more in the long run, especially if benefits never materialize. Here are a few potential reasons:
- A system cutover disaster or an unusually long post-go-live shakeout period occurs. This is because of major software issues and other items that where missed.
- The on-the-fly transfer of software knowledge to the client team is compromised. This leads to a failure to leverage the software capabilities, and expensive consultants are required to make simple system setup changes well into the future.
- Poor end-user acceptance of the system exists. Less involvement of end-users during the project contributes to a lack of user buy-in. Also, ignoring the need for software modifications that are easily justified makes employees jobs even more difficult to perform.
Traditional approach to ERP deployment
The traditional ERP deployment method borrows concepts from engineering and quality disciplines. It includes a well-defined set of project phases, gateways and deliverables. In simple terms, the idea is to measure twice and cut once, with the goal of installing a quality system while minimizing costly rework and delays on the backend of the project.
Traditional approach risks
There is the possibility of spending more time and money, yet still experiencing a bad ERP implementation, and some of the things that initially make this method appealing can become detriments. Here's a list of items to watch out for:
- Valuing form over function. Excessive formalities, deliverables and documentation can bog down the project.
- The tendency to reinvent the solutions wheel. "We are very different from other companies."
- Paralysis through analysis. The futile attempt to develop the perfect solution.
- Focusing too much on user acceptance. The project takes on a life of its own and excessive software modifications are allowed.
The best approach to ERP deployment?
Choosing one ERP deployment methodology over the other depends on the project and the organization. On large projects, or companies with complex business requirements, or when a financial return on investment is the primary measure of success, lean toward the traditional approach. These types of projects already imply more risk and software alone may not deliver the project benefits.
More on ERP implementation
Minimize risk when it comes to cloud ERP integrations
Tips for managing ERP consultants
Read up on tips for better estimating ERP projects, schedules
In the situations above, usually there are numerous legacy systems to replace or integrate, and more business processes to redesign. This always takes longer whether we like it or not, since industry templates are not going to cut it in this case.
Of course, in many situations, rapid deployment is the best method. For example, rapid deployment is preferable in small to medium-sized organizations where there are only a few systems to replace or where business processes are mostly manual. Therefore, the automation of tasks or simply having one integrated system will be a major leap forward from a business and end-user perspective.
Finally, lean toward rapid deployment in situations where the overriding business concern is to install the package as soon as possible. There are legitimate business reasons for this, but most tend to be strategic in nature and less orientated toward financial return on investment.
About the author:
Steven Phillips is an ERP professional with more than twenty-seven years of implementation experience. He is the author of the book Control Your ERP Destiny, available at Amazon, Google Books, Barnes & Noble and through many other international booksellers.
Follow SearchManufacturingERP.com on Twitter @ManufacturingTT.
Shopping for a PLM system? Here's a comparison of the top products