Software selection and implementation services have become big business for consulting firms as well as the software vendors themselves. Even with outside assistance, selecting the right software for your operation and having a successful implementation can be a difficult undertaking. Horror stories of failed ERP system implementations are unfortunately very common. Anyone who reads business publications has likely read stories where large corporations, posting smaller than forecasted profits, cite problems associated with the implementation of a new software system as one of the causes. Whether these claims are legitimate is up for debate. What is true is that businesses are highly dependent on information systems, and failures in the selection and implementation of systems can result in anything from a minor nuisance to a complete operational shutdown.
Software Selection
If you are unfamiliar with business software, be prepared to be bombarded with acronyms and buzz words. MRP, ERP, WMS, TMS, e-business, Web-enabled, collaborative, modular and scaleable are just a sampling of the terms used to describe (sell) software products. My first tip is that if after listening to a software vendor representative describe the software you still don�t understand what the software does, walk away.
Enterprise software ranges in price from a few thousand dollars to millions. In fact, up until recently, if you were a business with annual revenues of less than $200 million, many of the top enterprise software vendors didn�t even consider you a potential customer. Fortunately, this arrogance has been tempered recently due to economic conditions. Today, no matter how big or small your company, there is a multitude of vendors vying for your software dollars. That�s the good news. The bad news is that you must now find a way to sift through all of these products to find the one that best meets your business needs.
Unless you are shopping for a simplistic low-end package, it is highly advisable to seek the services of an independent software selection firm. Not only can it help to narrow the list of potential vendors, but it can also help to prepare initial assessments of implementation costs (which can easily exceed the initial cost of the software) and educate you on software and the process in general.
The most important part of the software selection process is defining the processes within your organization and determining functionality that is critical to your operation. Many times customers get lost in the bells and whistles and forget about their core business functions. If you are a manufacturer, manufacturing is your core business function, and you should be looking at packages that have been designed specifically for manufacturers. In addition, you should be focusing on the specific type of manufacturing you are conducting. If you are in the distribution or fulfillment business, you�ll want to focus on functionality related to order processing, warehouse management and transportation management. Be wary of the software vendor that claims its package works equally well in all of these environments. Most software packages are designed with specific customers in mind; asking the vendor about its biggest customers will often give you an idea as to the type of operation the software was designed to work in.
When you look at the detailed functionality of a product, it will be important to have listed detailed functionality requirements of your operation. This is where companies often make mistakes by emphasizing functionality that they currently don�t have and overlook core business processes that their current systems handle well. Never assume a software package �must� be capable of handling something you consider a standard business function. Some examples of detailed functional requirements are as follows:
� E-commerce capabilities
� Multi-plant demand planning
� Postponement and configure-to-order functionality
� Back-order processing
� Lot or serial number tracking
� Returns processing
It�s unlikely that the software package will do everything you want it to do, so be prepared to compromise. Shortcomings in functionality will need to be addressed through process changes, software modification or, in some cases, off-line work-arounds.
When addressing the issue of modifications, I have become convinced that the question to ask is not, �Will we modify?� but rather, �How much will we modify?� Packaged software will not do everything the way you want it to. Sometimes these deficiencies result in minor annoyances, and other times in costly business inefficiencies. It�s important to treat software as you would any other process, system or piece of equipment. Evaluate the costs and benefits of the modifications and make sound decisions that are in keeping with the business objectives of your organization.
In addition to functionality, you also need to consider usability. Functionality answers the question, �Can it do something?� while usability answers, �How does a user get it done?� You especially want to look at any high-volume tasks that occur in your organization. Look at the information provided in critical programs, and count the number of mouse clicks and keystrokes required to perform a task. Can you complete the task in one or two screens, or do you have to cycle through four or five? Are mouse clicks required, or are shortcut keys available? As much as we all love the mouse for surfing the Internet or working in graphics programs, it is not an efficient tool for high-volume transactions.
Are the bigger, more expensive packages better? That depends. There is a relationship between functionality and cost. But with this greater functionality also comes greater complexity. Greater complexity gobbles up resources, extends implementation times and drives up implementation costs. For large, complex organizations, highly functional software is indispensable. However, for a small company, you probably wouldn�t have the resources to implement and maintain it.
Implementation
As with the selection process, the implementation may also require outside assistance. Whether you use consultants from the software vendor, a business partner or an independent firm, the implementation plan will likely be the same. It�s very important to listen to your consultants and be prepared to dedicate the resources outlined in the implementation plan. A common mistake made by companies going through their first major implementations is to underestimate the complexity of their operations. Let me outline a common scenario in ERP implementations.
� The consultants warn of the consequences of not dedicating adequate resources.
� Management publicly agrees but privately thinks the consultants are crying wolf.
� Implementation goes poorly.
� Management claims, �How could we have known?�
Don�t let this be you. The only things you can assume about the implementation is that it will be much more difficult than you expected.
Like most other projects, the success of a software implementation is based upon the skill of the people involved, training and planning. You should plan to have your most knowledgeable employees heavily involved in the system setup and testing. Note that the most knowledgeable employees are not necessarily the department heads (trust me on this one).
Adequate time should be dedicated to make sure every aspect of every process is thoroughly tested. An example of detailed testing of a receiving program is listed below:
� Does the PO receipt screen have all the information I need to perform the receipt such as vendor item number, item description, unit of measure?
� What happens when I receive more than the PO quantity?
� What happens when I receive less than the PO quantity?
� What happens if someone tries to change the PO quantity after I have entered a receipt?
� What happens if someone tries to change the PO quantity at the same time I am entering a receipt?
You get the idea. You need to try every combination possible to see if you can make the system fail, and it will fail. The goal here is to make it fail prior to implementation rather than after. And you need to do this with every key process in every key program.
Even with extensive testing there will still be some issues that won�t be identified until after the system is up and running. While small issues and minor bugs are to be expected in any implementation, there is no excuse for not identifying major issues prior to implementation.
After the system has been thoroughly tested, you need to begin the process of employee training. I don�t think I�ve ever heard of a company over-training employees prior to implementation. Remember, you are going to have to deal with the unexpected issues that pop up; you don�t also need to be training employees after the system is turned on.
The training should consist of written procedures for the tasks they must perform and hands-on training. The most common mistake made in training end-users is a lack of adequate repetition. Just because someone was able to perform the task once during a training session does not mean he will be able to perform the task when you start up the system. If he has repeated the task many times over a series of training sessions, he is much more likely to remember how to do it.
In the end, the success or failure of a software selection/implementation project is directly related to the efforts put into it. Information systems are a critical part of managing operations, so don�t shortchange the process.
Dave Piasecki is owner/operator of Inventory Operations Consulting LLC, a consulting firm providing services related to inventory management, material handling and warehouse operations. Contact him at www.inventoryops.com.
