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Recovering from an ERP failure

Too often we see companies that see a software demo, buy the system and then struggle to implement, if they get the system up and running at all.

Brad Staats, Ultra Consultants
04/06/2018

Photo by takahiro taguchi on Unsplash

Too often we see companies that see a software demo, buy the system and then struggle to implement, if they get the system up and running at all.

A process manufacturer recently asked to guide an enterprise resource planning (ERP) project recovery with a more strategic approach by addressing the shortcomings of the past to proactively handle the weaknesses from the ERP failure.

The company is a US-based process manufacturer serving component manufacturers including customers in the military and aerospace sectors. With nearly 300 employees, the manufacturer operates out of four locations and is in the process of adding a fifth facility.

With both make-to-stock and make-to-order processes, the original ERP project was launched to help them replace an end-of-life ERP system. The legacy solution could not scale as the company headed into expanded business volumes, nor could it manage product consolidation activities. The process manufacturer relied on a variety of stand-alone systems and manual methods, and was looking to improve reporting and operations with the new ERP system.

ERP failure: What happened?

The previous selection project failed mostly due to the organization not fully embracing a business process improvement approach, and jumping the gun on assessing vendor offerings.

As an example, key functional areas needing improved processes were formulation tracking and shelf life management, planning and scheduling as well as tracking aerospace, military and environmental requirements. Instead of focusing on fully documenting and mapping the current and future state in these functional areas, the team jumped directly to vendor demos without a clear vision of how a new ERP system would add value. 

As one of the managers noted, the project got “lost in the weeds” in features and functions without a clear sense of the correct path to business performance improvements. As he so aptly noted, “we didn’t know what we didn’t know.” 

Fortunately, they did not make any purchase nor did they get anywhere near ERP implementation, since they realized early on that they didn’t know how to go about the process of selection.

A focus on business transformation

For this coatings processor, it was critical that the project recovery focus on business transformation as opposed to simply looking at ERP systems.

Our team led the organization with an overall goal of leveraging enterprise technology to achieve  business process transformation. 

We helped create a vision of the future state from the current state and helped define the business value for the project. We were able to pull multiple functions together into a single discussion and had multiple divisions speaking to the same solution: something they said had never happened before.

The ERP consultant team focused on business process mapping in key functional areas, such as formulation tracking and shelf life management, tracking aerospace, military and environmental mandates, planning and scheduling and other areas which needed streamlining and reducing wasted effort. 

This more strategic approached helped alleviate the shortcomings of the past. It also established alignment of expectations with management, improved the efficiency of the team, eliminated process waste, and reduced the time to benefit for the project.

Brad Staats, ultra senior consultant, Ultra Consultants, a CFE Media content partner. This article originally appeared on Ultra Consultants' blog.

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