Traditional ERP Implementations

Traditional ERP implementations are extremely risky, for both the partner deploying them and for the customer. This is why almost nobody supplies the elusive fixed fee. The potential for loss are just excessive.

The existing Dynamics NAV project costs were high because legacy methods are costly. The standard implementation follows a number of phases originally determined by Microsoft in the waterfall project framework. Waterfall project management software has been confirmed to become more costly compared to the modern “agile” approach, which is based on LEAN techniques.

The approach that has been utilised by virtually everyone since ERP has been in existence is always to bill “Time and Material.” This means that customers pay for the time spent by consultants, nomatter just how or bad they are. This moves the chance from the implentor for the customer almost entirely.

The reality is that it is possible to massive risks for your partner with one of these waterfall projects. I’ve seen Most cases where partners were sued or threatened when these projects go very badly.

I began thinking of how we necessary to change this looking at a LinkedIn post that shared a write-up on why “Time and Material Billing is Unethical.” I became really struck from the arguments. The author asked a question i think summed up fantastically well:

If your restaurant charged you for the some time to material which it popularized cook your steak, how does one feel?

This probably sparked my first real opinion of how to stop as being a serious amounts of material business.

ERP Pricing is incredibly unpredictable

One of the primary videos that I uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I’ve spent recent years since determining ways to remove that inaccuracy.

Obviously the simplest way to give accurate estimates would have been to be fixed fee. Unfortunately that traditional approach is so risky for the partner. It makes it genuinely scary to supply a fixed fee. should you not still do it, you are in a lots of trouble. I have worked very difficult to develop a strategy which i think differs from the others.

Applying LEAN Thinking to ERP Implementations

There exists a movement to make use of LEAN thinking to service activities. In general, LEAN is all about removing waste from the physical product, but it can be applied to projects too.

I invented my own variations of waste in ERP projects.

First – there is certainly time spent with the wrong resource.

This is typically if someone else who costs too much does something that someone who will be paid a smaller amount are capable of doing, or can do it faster.

Second – there are unnecessary steps

I have found such a thing happens when individuals perform steps to “cover their butts.” A great deal of project management falls into this. Additionally, it occurs consultants (compensated on hours billed) push unnecessary work.

Third – you can find wasted tasks

Sometimes customers wish to accomplish things that we, as ERP consultants, know will not work. Within a traditional implementation we have no economic motivation to stop it.

Lastly – you will find there’s “bleed” of data

Rise for the customer. Typically it’s once the customer doesn’t remember their training because they do not spend some time employed in it enough.

Why ERP Implementations Must Change!

Once we started doing cloud based ERP implementations with Microsoft Dynamics NAV it was common for patrons to spend $100,000 for the software and pay $200,000 because of their implementation.

After you type in the realm of the cloud, where Microsoft Business Central is $100 a month per user, things change. It’s hart to inform a person they’ll spend $2000 per month for software whilst still being pay $200,000 for implementation.

And we all did what our customers do. We set an expense we thought industry would support, and now we worked backwards to control our internal costs making money doing that. Our customers are manufacturing companies. They have to estimate a cost, and after that stick to it. They cannot check out their customer and say “we have to bill you more because we had been inefficient in our production process.” They’d close shop over night.

The newest procedure for ERP implentations.

I’m really a manufacturing expert than a technology expert. Few companies think in terms of projects with project managers (Engineer to get could be the exception). Many of them think in terms of operations managers and standard work instructions.

I applied this thinking to ERP projects. It will help that all carry out is implement ERP for companies.

Here’s are the main steps that helped us dramatically slow up the risk (and charges) of ERP projects.

We merely do one kind of projectFocusing exclusively on manufacturing, and in small facilities, resulted in we’re able to refine and have better with each and every project. We glance in the process as being a repetitive, repetable process. This process gets gone the beforehand style of the job plan etc. The project management disappears, and now we reduce that waste enormously.

We offset easy but tedious attempt to the customerWhen a $200 hourly consultant does what amounts to a clerical task, which is waste. We train the customers to accomplish many of the tedious tasks. It turns out that these are also much better made by the consumer. Business Central produces a great deal of this easier given it has great tools for users to perform tasks that used to be hard. There’s two of such specifically which can be key: Reports files Loading

We train customers to edit formsCustomers know what they need their invoice to look like. They do know where they need the due date on their own PO. It is way easier as we make them learn to switch these items than do it on their behalf.

We train visitors to load data to the systemData loading is really a task we assign to a co-op student right after hours training. The fact is, when customers “get” how this can be done – they do a far better job cleaning their data and things go much smoother!

We keep workout sessions shorter and VideoPeople forget what they’re taught. Without question of life. You do have a lot on the plate. Also, the more time someone spends in training – the greater they “zone out” and begin to lose focus. We keep workout sessions short, and record them all as videos. People absorb countless can easily review what they’ve got forgotten. What this means is we absolutely must train remotely. Travel time is really a killer (and totally waste)- so we can’t travel.

We maintain your project tight, and discourage changeTraditional ERP partners encourage remodeling. Remodeling means extra profit. Not for all of us. Whenever we do a Business Central project, we discourage any changes through the original project. Our projects aren’t super restrictive – but they do limit the features we will implement in “Phase 1.” Keeping the master plan tight, there’s a lot less “creep” and the boss is often much happier.

We still bill for customizations, but discourage them too Customizations will be the a very important factor we simply cannot predict – so we also discourage them. With all this new model, find customers request a lot fewer also. They trust us more to be aware what we are doing. Occasionally a customization is just a no-brainer, as well as in those cases we support as well as encourage them. Having said that – we now have less than 50 % the customization we used to.

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