Traditional ERP Implementations

Traditional ERP implementations can be extremely dangerous, for both the partner deploying them and for the customer. This is the reason no one provides elusive fixed fee. The potential risks are just too much.

The old Dynamics NAV project costs were high because legacy methods are costly. The normal implementation follows a number of phases originally set out by Microsoft in a waterfall project framework. Waterfall project management is proven to get costlier as opposed to modern “agile” approach, that is according to LEAN techniques.

The approach that is employed by virtually everyone since ERP has been online is always to bill “Time and Material.” Because of this customers spend on the time spent by consultants, nomatter how good or bad they’re. This moves the chance through the implentor for the customer almost entirely.

The reality is that you may still find massive risks to the partner with these waterfall projects. I have come across Most all cases where partners were sued or threatened when these projects go very badly.

I started contemplating how we necessary to change this after reading 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 something that I think summed up fantastically well:

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

This probably sparked my first real thoughts about easy methods to stop as a some time and material business.

ERP Cost is incredibly unpredictable

One of the primary videos i uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I’ve spent time since finding out solutions to remove that inaccuracy.

Obviously the best way to give accurate estimates ended up being to be fixed fee. The trouble is that traditional approach is really high-risk to the partner. Commemorate it really scary to offer a fixed fee. should you not do it right, you’re in a large amount of trouble. I’ve worked tough to develop a strategy that I think is different.

Applying LEAN Thinking to ERP Implementations

There’s a movement to utilize LEAN thinking to service activities. Generally speaking, LEAN is approximately removing waste from the physical product, but it does apply to projects too.

I developed my personal variations of waste in ERP projects.

First – there exists time spent with the wrong resource.

This is typically if somebody who is too expensive does something that somebody that is paid significantly less are able to do, or can perform it faster.

Second – you can find unnecessary steps

I have discovered this occurs when individuals perform steps to “cover their butts.” Plenty of project management software falls into this. What’s more, it happens when consultants (compensated on hours billed) push unnecessary work.

Third – you will find wasted tasks

Sometimes customers wish to accomplish issues that we, as ERP consultants, know will not work. Inside a traditional implementation we’ve no economic motivation to halt it.

Lastly – there is a “bleed” of information

Normally, this is for the customer. Typically it’s once the customer doesn’t remember their training as they do not spending some time working in the system enough.

Why ERP Implementations Must Change!

Whenever we started doing cloud based ERP implementations with Microsoft Dynamics NAV it was common for clients to cover $100,000 to the software and pay $200,000 for his or her implementation.

After you enter the whole world of the cloud, where Microsoft Business Central is $100 per month per user, things change. It’s hart to inform a person they’re going to spend $2000 30 days for software yet still pay $200,000 for implementation.

And then we did what our customers do. We set an expense we thought the marketplace would support, and we worked backwards to manipulate our internal costs to make money doing that. Our customers are manufacturers. They must estimate an expense, and after that follow it. They can not visit their customer and say “we have to bill you more because we were inefficient inside our production process.” They will close shop instantly.

The new procedure for ERP implentations.

I’m really a manufacturing expert than the usual technology expert. Few manufacturers think when it comes to projects with project managers (Engineer to Order could be the exception). They generally think when it comes to operations managers and standard work instructions.

I applied this thinking to ERP projects. It may help that we do is implement ERP for manufacturing companies.

Here’s include the main steps that helped us dramatically lessen the risk (and costs) of ERP projects.

We merely do one form of projectFocusing exclusively on manufacturing, along with small facilities, meant that we will refine and get better with each and every project. We glance with the process as a repetitive, repetable process. This kind of gets eliminate the beforehand form of the job plan etc. The work management disappears, and we reduce that waste enormously.

We offset easy but tedious make an effort to the customerWhen a $200 per hour consultant does what comes down to a clerical task, which is waste. We train the customers to perform many of the tedious tasks. Apparently sorts much better created by the buyer. Business Central is really a great deal of this easier given it has great tools for users to accomplish tasks that used to be hard. There are two of those especially that are key: Reports files Loading

We train customers to edit formsCustomers determine what they want their invoice to appear like. They are fully aware where they desire the deadline day on their PO. It can be way easier when we teach them to switch these things compared to it for the kids.

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

We keep training sessions shorter and VideoPeople forget what they’re taught. It goes without saying of life. There is a lot in your plate. Also, the longer an individual spends in training – greater they “zone out” and initiate to reduce focus. We keep exercise sessions short, and record these as videos. People absorb increasingly can certainly review what they’ve forgotten. Therefore we absolutely must train remotely. Travel time is often a killer (and totally waste)- therefore we can’t travel.

We maintain the project tight, and discourage changeTraditional ERP partners encourage remodeling. Additional work means extra profit. Not for all of us. Whenever we perform Business Central project, we discourage any changes from your original project. Our projects aren’t super restrictive – nevertheless they do limit the features we’re going to implement in “Phase 1.” By continuing to keep the plan tight, there is a lot less “creep” and the boss is often much happier.

We still bill for customizations, but discourage them too Customizations include the another thing we can’t predict – so we also discourage them. Considering this new model, we find customers ask for a lot fewer also. They trust us more to understand were doing. Occasionally a customization is simply a no-brainer, as well as in those cases we support and even encourage them. However – we have less than 50 % the customization we accustomed to.

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