Several Approaches To Save Erp Implementation Rates And Eliminate Risks
Traditional ERP Implementations
Traditional ERP implementations are really dangerous, for the partner deploying them and also for the customer. That is why almost nobody offers the elusive fixed fee. The potential risks are only excessive.
The existing Dynamics NAV project costs were high because legacy methods can be very expensive. The conventional implementation follows numerous phases originally lay out by Microsoft inside a waterfall project framework. Waterfall project management has been shown to become costlier compared to the modern "agile" approach, that's depending 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." Which means that customers purchase enough time spent by consultants, nomatter just how or bad they may be. This moves the chance in the implentor towards the customer almost entirely.
In fact there are still massive risks for your partner with one of these waterfall projects. I have come across Most all cases where partners were sued or threatened when these projects go very badly.
I started thinking of how we needed to change this reading a LinkedIn post that shared an article on why "Time and Material Billing is Unethical." I had been really struck by the arguments. The author asked a matter which i think summed it down fantastically well:
If the restaurant charged you to the time and material who's loved cook your steak, would you feel?
This probably sparked my first real thoughts about how you can~the way to~tips on how to~the best way to~ways to stop being a some time and material business.
ERP Costs are incredibly unpredictable
The primary videos i uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I've spent many years since determining ways to remove that inaccuracy.
Obviously the ultimate way to give accurate estimates ended up being to be fixed fee. The thing is that traditional approach is indeed high risk to the partner. Celebrate it really scary use a fixed fee. if you don't do it right, you have a great deal of trouble. We've worked very hard to develop a strategy i think is different.
Applying LEAN Thinking to ERP Implementations
There is a movement to apply LEAN thinking to service activities. In general, LEAN is around removing waste from your physical product, nevertheless it does apply to projects too.
I came up with my own, personal variations of waste in ERP projects.
First - there is time spent by the wrong resource.
This is typically if somebody who is too expensive does something which someone that pays a smaller amount are capable of doing, or can do it faster.
Second - you will find unnecessary steps
I have discovered such a thing happens when individuals perform steps to "cover their butts." A lot of project management falls into this. It also occurs consultants (compensated on hours billed) push unnecessary work.
Third - you can find wasted tasks
Sometimes customers wish to accomplish stuff that we, as ERP consultants, know will not work. Within a traditional implementation we have no economic motivation to prevent it.
Lastly - you will find there's "bleed" of information
This is usually on the customer. Typically it's once the customer doesn't remember their training because they don't spend some time doing work in the system enough.
Why ERP Implementations Ought to Change!
Once we started doing cloud based ERP implementations with Microsoft Dynamics NAV it was common for patrons to spend $100,000 for that software and pay $200,000 for his or her implementation.
Once you type in the world of the cloud, where Microsoft Business Central is $100 monthly per user, things change. It's hart to inform a person they are going to spend $2000 per month for software and still pay $200,000 for implementation.
Therefore we did what our customers do. We set a price we thought the marketplace would support, and we worked backwards to control our internal costs making money doing that. Our industry is manufacturers. They must estimate a cost, after which stay with it. They cannot head to their customer and say "we have to bill you more because i was inefficient within our production process." They would close shop instantly.
The brand new approach to ERP implentations.
I'm more of a producing expert when compared to a technology expert. Few suppliers think with regards to projects with project managers (Engineer to get is the exception). They usually think when it comes to operations managers and standard work instructions.
I applied this thinking to ERP projects. It can help that every perform is implement ERP for suppliers.
Here's include the main steps that helped us dramatically slow up the risk (and expenses) of ERP projects.
We just do one form of projectFocusing exclusively on manufacturing, along with small facilities, meant that we could refine and get better with each and every project. We look at the process as a repetitive, repetable process. This gets reduce the at the start design of the job plan etc. The work management goes away completely, and that we reduce that waste enormously.
We offset easy but tedious work to the customerWhen a $200 by the hour consultant does what depends upon a clerical task, that is certainly waste. We train the shoppers to accomplish some of the tedious tasks. It turns out that forms of greater created by the client. Business Central produces a large amount of this easier since it has great tools for end users to accomplish tasks that had been hard. There are 2 of the especially that are key: Reports and Data Loading
We train visitors to edit formsCustomers know very well what they need their invoice to take a look like. They are fully aware where they need the payment date on their own PO. It really is way easier whenever we make them learn to improve these items than do it for them.
We train customers to load data in the systemData loading is really a task we assign into a co-op student after a couple of hours training. Truth be told, when customers "get" how this can be done - they actually do a far better job cleaning their data and things go much smoother!
We keep exercise sessions shorter and VideoPeople forget what they're taught. Without question of life. There is a lot on your plate. Also, the more time a person spends in training - greater they "zone out" and start to reduce focus. We keep training sessions short, and record them all as videos. People absorb more and can certainly review what they've got forgotten. Therefore we absolutely must train remotely. Travel time is a killer (and totally waste)- so we can't travel.
We maintain your project tight, and discourage changeTraditional ERP partners encourage additional work. Additional work means extra profit. Not for us. If we execute 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're going to implement in "Phase 1." By continuing to keep the blueprint tight, there is a lot less "creep" along with the boss is generally much happier.
We still bill for customizations, but discourage them Customizations would be the another thing we're not able to predict - so we also discourage them. Given this new model, we discover customers request a lot fewer also. They trust us more to understand what we're doing. Occasionally a customization is only a no-brainer, along with those cases we support as well as encourage them. Even so - we've not even half the customization we employed to.
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