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Wednesday, August 25, 2010

Avoid ERP Setbacks


Here are some guidelines from companies that have gotten it right:

CREATE A COMMON LANGUAGE. Frame the project as an organisational transformation, not an IT project. Make sure everyone in your organization understands the nature and goals of the ERP initiative, particularly in the early stages. Many companies battle their own history and legacy of past success in driving change.

APPLY THE 80/20 RULE. Focus on transforming the business activities that matter most to your organisation. Many of the companies in our study turned their ERP projects around only after recognizing that 80% of their business was driven by 20% of their business processes.

KEEP THE BEST OF THE OLD, DISCARD THE WORST OF THE NEW. Don't change things just for the sake of changing them. Preserve the activities and technologies that set your organisation apart and that customers like. Embrace only "new" things that will help move your business forward.

DEVELOP ENTERPRISE METRICS. Measure the performance of your organization as a whole to determine whether ERP is working. Finding improvement in certain business units doesn't necessarily mean your organisation has become more efficient overall.

PLAN FOR THE LONG HAUL. Cast the ERP effort as a long-term project, not a quick fix. ERP is a long, arduous and expensive process, but when executed properly, the potential payback is great.

Source: Wall Street Journal, Albert H. Segars and Dave Chatterjee

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