An ERP system is the basis for controlling a company. One thing is absolutely clear: companies carry out every change with caution.
ERP systems are the central nervous system of a company, often specialized and fragile, but established and accepted. However, the wheel does not always have to be reinvented. There are standard solutions on the market that meet different requirements. The trick is to first define the requirements, then select them and define interfaces fairly securely.
In practice, the selection for a new ERP system often takes several years and for many the very evaluation is a torture. For those who have recognized the need, costs play a major role and decision makers postulate adherence to standards to avoid costly adjustments. But one thing is always amazing: shortly after the kick-off, the mantra (the magic formula) of standardization often tips over.
There are many reasons for this change
There are good reasons why an entrepreneur might have to deal with the exchange of his company’s backbone. One reason for a change is the lack of compatibility of the existing system with the current operating systems. Indeed, there are still companies that work with solutions from DOS times or medium data technology. At that time, the graphics industry was still talking about industry software – in the highest form, Management Information Systems (MIS), which is just as wrong. The rest of the world understands this to mean an analysis and reporting system for key company figures. So let’s stick with the ERP systems (Enterprise Resource Planning), which provide timely planning and control of resources such as capital, personnel, resources, materials, information and communication technology within the company.
Let’s get back to the reasons for the change. If the software provider is no longer available, a company will have a bad starting point. This applies to in-house developments as well as to providers (Hiflex, Alphagraph or others) who have disappeared “overnight”. The obligation to make the switch can also result from the fact that the existing solution no longer meets individual requirements (keyword: cloud computing or interfaces). However, the compelling necessity of having to change is not only annoying, but also often leads to unwillingness on the part of the project.
Companies that have defined a very specific need, that want to improve and that want to drive their own transformation have a much better starting position. Companies that have a high degree of maturity for digitization and are fit for the future.
In any case, the evaluation process usually starts with the “usual suspects”, perhaps one or another will dare to think outside the box and look at a “neutral” ERP system. However, there are no truly neutral ERP systems, as each focuses on one or more industries and clearly defines its competencies. This is fair and also good.
Similar is not the same
After initial presentations and viewing of references supplied by the provider, the selection then progresses into greater detail. Visiting peer companies is fundamentally not a bad idea, because most print shops work with “almost” the same machines, with “comparable” processes and on “similar” jobs. But be careful: similar is not the same.
Deviations from the company’s own processes certainly occur. If, however, the deviations are greater than expected, the first doubts about standard software often follow, and the “in-house development or program adaptation” fraction requires a comparison of the advantages and disadvantages. However, there are many arguments for staying with the standard.
- Standard software is considered mature.
- The cost framework is adhered to and commissioning can be carried out at short notice.
- Modules of the standard software enable simple linking of different operational processes.
- As a rule, standard software relies on standard interfaces and enables easy integration into workflows.
- Training courses are usually cheaper than individual services.
Of course, standard software also has its disadvantages – as soon as the standard is abandoned (which does not, however, speak in favor of in-house development).
- Concrete system requirements apply to standard software, which are not always the cheapest solution.
- Standard software may not fit 100% to the operational processes and requirements.
- Adaptations of the standard software to the special needs cause comparatively high follow-up costs, since these adaptations must be taken along also with version changes and updates.
Changes of direction have consequences
Let us now assume that after weighing all the arguments, the decision is made in favor of standard software, the project team is motivated, the implementation plan takes shape, and depending on the orientation and the selected modules and options, the project starts. The timeframe for the implementation of the selected software seems feasible for all parties involved. This works well until someone (inside or outside the project team) succeeds in presenting a very specific requirement as irrevocable. Big discussions and a spreading uncertainty end with sometimes lazy compromises whose effects on later processes can hardly be foreseen.
Of course, many ERP software packages allow you to go in several directions – with each change of direction requiring the decision in favor of the standard. The situation becomes tight when no path provided by the software is accepted as a solution and there is no willingness to give in. In practice there is always a gap between the thought “We have to leave the comfort zone” and the fact “We are leaving the comfort zone now”.
“In change processes, dealing with the different types of reactions remains one of the greatest challenges. The fact is: If change management is to succeed, all employees must be taken seriously.” – Bernd Zipper.
7 Facts about standard software
A standard solution certainly can’t do everything, and often enough third-party software is needed to support or stabilize certain processes. But it is not advisable to leave the standard path at the slightest headwind just because you are afraid of a little change. Here are a few examples.
- Management has given insufficient priority to the ERP project and the idea of standardization. The change must be planned and communicated. If the need for new software stems from the desire to realign the company, then the ERP project is definitely a matter for top management.
- The project management, in turn, needs the support of the management. Especially when problems arise, there must be no radio silence from the executive floor. Dropping the system just because the performance goes down and the complexity goes up does not apply.
- The project team should define the standards, not program software. Qualified and competent employees are required who are willing to embrace new ideas, but are also aware of the implications of decisions.
- What certainly brings down every standardization is the attempt to replicate the old ERP system. Why should you? If the old standard was so great, why should there be a new system at all?
- There are requirements that require third-party software or moderate adaptations of the standard software. Here it is always necessary to question whether this is really necessary.
- If a company treats the ERP implementation as a pure IT project, a problem arises. Of course, it is important to have IT management check the security of a cloud system, but solid ERP software vendors are certified and do not require excessive checking by internal departments, which can be an obstacle in the worst cases.
- And finally, those who stick to traditional processes and are not willing to change processes will fail with a new, standards-based system. Many discontinued projects prove this – not only in the ERP area.
Managing the change process
The latter point is virtually a KO criterion for a targeted transformation – especially if the management is not involved in the daily business. Of course, there is the bewildered head of department who can no longer work with his Excel lists, there is the disbanded salesperson who asks whether he should sell or play with software just because he sees himself at a loss with the CRM system. There’s only one question: “Don’t ask the frog if you should drain the pond!
But the problem is not to be underestimated. If a print shop has long-standing employees, this is usually viewed positively. However, this can lead to considerable difficulties in the change process and in modified working conditions. This is because the performance of change processes generally goes down first and complexity increases. The consequences, which are completely normal for changes, can be cushioned by appropriate measures, otherwise a project could collapse.
Those who do not have a clear goal will end up in confusion, because without a goal there can be no success. Poor communication leads to rejection. If you don’t say what you want, you don’t get what you want. Technical deficits must be recognized and, in case of doubt, compensated by external specialists. If one omits this, then it generates fear. The wrong tools? Then frustration may ensue. Punching a nail into the wall with pliers is possible, but not fun! If zero to little relief is provided, things will progress more slowly than planned. However, this can lead to a standstill or termination of projects. Finally, the action plan. If it does not exist or if it is not comprehensible, it inevitably leads to chaos.
Admittedly: No ERP software introduction can be played without accompanying background noise, but you avoid the greatest disagreements if you stick to the well thought-out and proven standards and only deviate from them in well documented and justified exceptions.
My Take: The introduction of standard ERP software can be accompanied by many problems. Sometimes it is the organization and there are “only” delays. In other cases, the resources are not sufficient. However, the causes of the stumbling blocks are often the same: Missing specifications, bad communication, wrong project management and no backing from the management. With good planning, technical foresight and extensive communication, the goal will be easily achieved, and the new standard will be effective. It is the first, but essential, step towards automation and thus prepares the way for digital transformation.