Traditional ERP Implementations

Traditional ERP implementations are really high-risk, for the partner deploying them and for the customer. This is the reason no one provides the elusive fixed fee. The hazards are only too much.

That old Dynamics NAV project costs were high because legacy methods can be very expensive. The standard implementation follows many phases originally set out by Microsoft in the waterfall project framework. Waterfall project management software has been confirmed being higher priced as opposed to modern “agile” approach, that is determined by LEAN techniques.

The approach that has been used by virtually everyone since ERP ‘s been around would be to bill “Time and Material.” Because of this customers purchase time spent by consultants, nomatter just how or bad they are. This moves the danger in the implentor towards the customer almost entirely.

The reality is that there are still massive risks for that 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 began considering the way you necessary to change this looking at a LinkedIn post that shared a write-up on why “Time and Material Billing is Unethical.” I had been really struck through the arguments. The article author asked a matter that we think summed it up fantastically well:

If a restaurant charged you for your some time to material it latched onto cook your steak, how do you feel?

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

ERP Pricing is 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 recent years since finding out methods to remove that inaccuracy.

Obviously the simplest way to give accurate estimates would have been to be fixed fee. The thing is that traditional approach is indeed high risk for your partner. It makes it genuinely scary use a fixed fee. unless you do it properly, you’re in a lot of trouble. We have worked very difficult to develop a method that I think differs from the others.

Applying LEAN Thinking to ERP Implementations

There’s a movement to apply LEAN thinking to service activities. In general, LEAN is all about removing waste coming from a physical product, but it is true to projects too.

I developed my own variations of waste in ERP projects.

First – there’s time spent with the wrong resource.

This really is typically when someone who is too expensive does something which somebody that is paid much less are able to do, or are able to do it faster.

Second – there are unnecessary steps

I find such a thing happens when individuals perform steps to “cover their butts.” Lots of project management software falls into this. It also comes about when consultants (compensated on hours billed) push unnecessary work.

Third – there are wasted tasks

Sometimes customers want to do stuff that we, as ERP consultants, know won’t work. Inside a traditional implementation we’ve got no economic motivation to avoid it.

Lastly – there’s a “bleed” of info

Normally, this is for the customer. Typically it’s once the customer doesn’t remember their training because they don’t invest some time in the system enough.

Why ERP Implementations Must Change!

Once we started doing cloud based ERP implementations with Microsoft Dynamics NAV it had been common for customers to spend $100,000 to the software and pay $200,000 for implementation.

As soon as you go into the world of the cloud, where Microsoft Business Central is $100 per month per user, things change. It’s hart to tell a person they will spend $2000 per month for software whilst still being pay $200,000 for implementation.

And we all did what our customers do. We set an expense we thought the marketplace would support, and now we worked backwards to regulate our internal costs making money doing that. Our industry is manufacturing companies. They need to estimate a price, after which stick to it. They can’t head to their customer and say “we should bill you more because we were inefficient in our production process.” They’d go out of business instantly.

The brand new method of ERP implentations.

I’m much more of a manufacturing expert than the usual technology expert. Few suppliers think regarding projects with project managers (Engineer to buy will be the exception). They generally think regarding operations managers and standard work instructions.

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

Here’s are the main steps that helped us dramatically slow up the risk (and costs) of ERP projects.

We merely do one sort of projectFocusing exclusively on manufacturing, plus small facilities, meant we’re able to refine and obtain better with each project. We glance at the process as being a repetitive, repetable process. This process gets gone the in advance form of the project plan etc. The work management disappears, and that we reduce that waste enormously.

We offset easy but tedious work to the customerWhen a $200 each hour consultant does what amounts to a clerical task, which is waste. We train the customers can use to complete a number of the tedious tasks. Evidently kinds greater made by the client. Business Central makes a great deal of this easier because it has great tools for end users to accomplish tasks that was once hard. There are 2 of such in particular which can be key: Reports information Loading

We train people to edit formsCustomers know very well what they really want their invoice to look like. They know where they desire the deadline on his or her PO. It can be way easier whenever we guide them to change these items than do it for them.

We train visitors to load data in to the systemData loading is really a task we assign to a co-op student after a few hours training. The truth is, when customers “get” how this can be done – they 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. It’s a fact of life. You’ve got a lot on the plate. Also, the longer an individual spends in training – the harder they “zone out” and begin to lose focus. We keep services short, and record them all as videos. People absorb increasingly can readily review what they’ve forgotten. This means we absolutely must train remotely. Travel time is often a killer (and totally waste)- therefore we can’t travel.

We keep your project tight, and discourage changeTraditional ERP partners encourage extra work. Remodeling means extra profit. Not for us. If we perform Business Central project, we discourage any changes in the original project. Our projects aren’t super restrictive – nevertheless they do limit the options we will implement in “Phase 1.” By keeping the plan tight, there is lots less “creep” and the boss is often much happier.

We still bill for customizations, but discourage them also Customizations would be the a very important factor we can not predict – and we all also discourage them. Considering this new model, we find customers demand a lot fewer also. They trust us more to be aware what we have been doing. Occasionally a customization is simply no-brainer, and in those cases we support and also encourage them. However – we’ve less than 50 % the customization we accustomed to.

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