- CIOs who think their ERP efforts will ever be complete can expect to face serious problems
- Successful implementation of ERP systems means understanding that they will continually evolve
- Three actions organisations should consider to maximise the value of their ERP: integrating, optimising and "informating"
Guess what? Your ERP implementation will never be finished. A recent report highlights the fact that enterprise solutions are not simply big projects for IT, but an ongoing program of change for the organisation
Jeanne Harris remembers well the day one of her clients said to her: "This ERP project is the mother of all projects. It's the biggest, most complicated project I'll ever do, and I can't wait until it's done."
But of course ERP is never done, says Harris, who is senior research fellow and associate partner with Accenture's Institute for Strategic Change. And although she recognises that accepting that reality involves a very big sea change for most IT organisations, the simple fact is anyone who thinks their ERP efforts will ever be done can expect to face serious problems.
"The most successful companies [in implementing ERP] understood evolve and improve and find new ways to use their enterprise systems, [and] it was going to give them new opportunities for innovation," she says. "And actually, many of them said that one of the biggest surprises for them is that they have found, as they use the system and become more familiar with its capabilities, their insight and understanding into how it can create value for them really evolves.
"So many of them, having got the benefits they set out to get, now see this whole new frontier, and that's very exciting to them."
Harris is co-author of an Accenture Institute for Strategic Change report: Enterprise Solutions: Achieving the Vision and the Value. Prepared in association with Thomas Davenport and Susan Cantrell, the report finds few organisations have achieved the benefits they expected from ERP, only partly because enterprise solutions take longer to deliver benefits than many other systems. The real hurdle to fully realising enterprise solution value appears to be the decision by many organisations to complete only the basics of implementing enterprise solutions. Whether they stopped because of money or time, the Accenture analysis shows these organisations achieved half or less of the targeted benefits from their enterprise solutions.
Based on quantitative analysis of information obtained from interviews with 163 senior executives from large organisations and of the experience of 28 organisations considered to be leading adopters of enterprise solutions in the communications and high technology, financial services, government, products and resources industries in Australia, Europe and the US, the report identified three actions organisations should consider to maximise the value of their ERP: integrating, optimising and informating (with the last being defined as using information to transform work).
Harris says in-depth qualitative interviews with global high performers showed they were poised to start achieving some of the benefits most desired by senior management. But the clear message from even those high performers was that they wished they had understood going into the exercise that they were not embarking on the biggest IT project of all time, but were actually instigating an ongoing program of change for their organisation.
"The findings show that some companies got a lot more value than others," Harris says. "Some of the companies that got 50 per cent of the value - the way we were defining it - were perfectly happy; they'd pretty much achieved a lot of their objectives. But in terms of what was the potential, there was a lot more on the table.
"So some companies did a lot better job than others of realising value. To some extent that is purely a function of time, and experience with the system. It takes time to implement a critical mass of modules, a critical mass of your business and a critical number of people using the system. It takes time for those people to be comfortable with the system. As they do, the value goes up."
Successful companies also did better at the three value drivers (integrate, optimise and informate), and this was linked to those organisations' approach to the rationale for implementing enterprise systems in the first place, Harris says.
Those who saw implementing an ERP project as a simple solution to their Y2K woes achieved less value than those who had a plan, a set of goals and a set of matrices, the report found. In fact the researchers found by far the quickest way to accelerate the benefits the organisation gained was to have at the outset a clear understanding of their goals and objectives, a clear set of metrics and someone accountable for achieving those.
And they should never lose sight of the fact that the real ERP work never stops.
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