The Black Hole of ERP
All ERP projects start off with lofty goals and great intentions. Having been around the block a few times, I’ve experienced that pre-project feeling of excitement and anticipation as companies prepare to take their business to the next level.
All the teams are assembled, and everyone is involved from the Board Room to the Shop Floor. Teams of consultants are called in, and a detailed project plan is created so everyone is on the same page and rowing in the same direction. The budget is generous. Money is flowing like water. There are a few things that exceed expectations, but they’re easily put aside into something called, “Phase Two.”
The countdown begins and the project is launched.
At first, it’s all smooth sailing, but then something happens. The further into your flight you get, the more gaps you discover, and the reality of the project breadth starts to set in.
No worries, though – wrinkles were expected, and extra time was allowed for issues. The flight continues, and besides, there’s always this thing called, “Phase Two. “
Yes, Phase Two evolves into an increasingly common phrase as many projects progress. It starts to become a holding place for anything that may delay or prevent the implementation of Go Live. It takes on the feeling of a security blanket when teams become stressed. As the project nears completion and the flow of money begins to taper off, Phase Two is the budget saver.
Now, before you start assuming I think Phase Two (or Phase Three or Phase Four) is bad, let me tell you that I think it’s absolutely essential to have multiple phases. ERP is a complex, expensive tool that drastically changes the way your company does business and trying to accomplish it all in one fell swoop is practically impossible (and possibly foolish).
So, having a Phase Two is good (and necessary), because this is where you really start to maximize your ERP investment. While Phase One is typically focused on modeling your daily quote-to-cash activities in your ERP, post-Go Live activities are where true optimization and growth is established: process refinement, MRP, cycle counting, advanced planning and scheduling, QA integration, EDI, eCommerce, process automation, advanced financial reporting. All are items that commonly occur in Phase Two which have a direct impact on your bottom line.
The problem is many companies throw things into Phase Two, never to be seen again. Everyone is busy and resources are being expended after Go Live, but typically nothing comes back out of the Phase Two black hole. Why is that?
I have a theory on that. Well, actually it’s more than a theory. It’s the result of working on countless ERP projects over the past decade.
You see, something changes after Go Live. The flight crew and teams of technicians that were there for the launch have packed up and gone back to their “day” jobs. The endless flow of money becomes more of a bucket that’s certainly not bottomless. And the task of completing Phase Two falls on a much smaller subset of members who don’t have access to all the insights and assistance needed to make decisions that influence everyone from Executive Leadership to Shop Floor employees. They often must choose between maintenance and expansion, and the former always comes first.
So thus, the black hole keeps its grip on Phase Two. Houston, we have a problem.
Now, at this point (hopefully), you may be asking, “Oh wise one, who has so much experience, how can we defeat this black hole?” It’s actually quite simple. You need to plan out and execute Phase Two the same way you completed Phase One using four steps:
1. Assess. Figure out where you are. Dig out that list of Phase Two tasks. Have any of them been accomplished? Are they still applicable?
2. Define. Where do you need to go? Determine what needs to happen to get there. Create a list of all the gaps that exist.
3. Create. Build a prioritized task list including required resources and
materials needed to bridge the gaps. Use this as a foundation for a
project plan, or series of plans, that will guide who, how and when your
Phase 2 goals will be accomplished.
4. Execute. Follow the plan and unlock even more capabilities in your ERP
Four steps. Can’t get much easier, right?
“So, what’s the catch?” you’re wondering. “Why is the black hole still winning?”
Honestly, it comes down to finding the right person to manage the process. It’s extremely rare to find an internal (and many times even an external) resource who has the knowledge, experience, authority and time to defeat the infamous black hole.
And that’s where we come in.
IHS has developed the “ERP Phase Two” (EP2) program to help companies pull their projects back out of the black hole. The strength of our Four Step EP2 program is our staff, who have real-world experience from the Board Room to the Shop Floor, backed up by decades of ERP and Project Management experience.
We’ve walked on the moon. Heck, I think some of us have even spent some time on Mars. We understand what it takes to run a manufacturing business and how to use ERP to its full advantage.
If you’re tired of living in the black hole, give us a call. We want to show you how our experience can bring your company back into the light.