Traditional ERP Implementations

Traditional ERP implementations can be extremely high risk, for both the partner deploying them but for the customer. That is why almost nobody supplies the elusive fixed fee. The potential for loss are only an excessive amount of.

The existing Dynamics NAV project costs were high because legacy methods are expensive. The typical implementation follows a number of phases originally set out by Microsoft in a waterfall project framework. Waterfall project management has been proven to be higher priced compared to modern “agile” approach, that is based on LEAN techniques.

The approach that’s been used by virtually everyone since ERP has existed is always to bill “Time and Material.” Because of this customers spend on the time spent by consultants, nomatter how good or bad they may be. This moves the chance in the implentor for the customer almost entirely.

In fact you may still find massive risks for that partner with one of these waterfall projects. I’ve come across MANY cases where partners were sued or threatened when these projects go very badly.

I began considering the way you required to change this reading a LinkedIn post that shared a write-up on why “Time and Material Billing is Unethical.” I became really struck with the arguments. The writer asked something that I think summed it fantastically well:

In case a restaurant charged you for that some time and material it took to cook your steak, how does one feel?

This probably sparked my first real opinion of how to stop as a some time to material business.

ERP Cost 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 the years since working out solutions to remove that inaccuracy.

Obviously the ultimate way to give accurate estimates ended up being to be fixed fee. The trouble is that traditional approach is really risky for that partner. Celebrate it truly scary to offer a fixed fee. unless you still do it, you’re in a large amount of trouble. We have worked very hard to develop a strategy i think is exclusive.

Applying LEAN Thinking to ERP Implementations

There’s a movement to utilize LEAN thinking to service activities. Generally speaking, LEAN is approximately removing waste coming from a physical product, nonetheless it is true to projects too.

I created my own, personal variations of waste in ERP projects.

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

This can be typically when someone who costs too much does something which somebody who pays significantly less are able to do, or can perform it faster.

Second – you’ll find unnecessary steps

I have found this happens when folks perform steps to “cover their butts.” Plenty 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 might like to do items that we, as ERP consultants, know will not work. In a traditional implementation we’ve got no economic motivation to avoid it.

Lastly – there exists a “bleed” of information

Normally, this is about the customer. Typically it’s if the customer doesn’t remember their training because they do not spending some time in the machine enough.

Why ERP Implementations Have to Change!

Once we started doing cloud based ERP implementations with Microsoft Dynamics NAV it was common for patrons to spend $100,000 to the software and pay $200,000 because of their implementation.

After you enter the realm of the cloud, where Microsoft Business Central is $100 a month per user, things change. It’s hart to tell an individual they will spend $2000 30 days for software yet still pay $200,000 for implementation.

And then we did what our customers do. We set a price we thought the marketplace would support, and now we worked backwards to manipulate our internal costs and make money doing that. Our customers are companies. They must estimate a price, after which adhere to it. They can not visit their customer and say “we need to bill you more because we had been inefficient in our production process.” They might go out of business overnight.

The modern approach to ERP implentations.

I’m much more of a manufacturing expert when compared to a technology expert. Few manufacturers think regarding projects with project managers (Engineer to acquire could be the exception). They generally think with regards to operations managers and standard work instructions.

I applied this thinking to ERP projects. It may help that perform is implement ERP for suppliers.

Here’s are the main steps that helped us dramatically lessen the risk (and expenses) of ERP projects.

We merely do one form of projectFocusing exclusively on manufacturing, plus small facilities, meant that we could refine and obtain better each and every project. We look with the process being a repetitive, repetable process. This kind of gets reduce the at the start design of the project plan etc. The job management disappears, and now we reduce that waste enormously.

We offset easy but tedious attempt to the customerWhen a $200 by the hour consultant does what comes down to a clerical task, that is waste. We train the customers can use to accomplish a number of the tedious tasks. Apparently , kinds far better produced by the consumer. Business Central makes a lot of this easier given it has great tools for customers to perform tasks that had been hard. There are 2 of such in particular which might be key: Reports information Loading

We train people to edit formsCustomers know what they want their invoice to take a look like. They know where they desire the deadline day on their PO. It really is way easier whenever we teach them to change these things than do it for them.

We train visitors to load data in the systemData loading is really a task we assign with a co-op student after a couple of hours training. The fact is, when customers “get” how this is done – they actually do a much better job cleaning their data and things go much smoother!

We keep exercise sessions shorter and VideoPeople forget what they are taught. Without question of life. You do have a lot on your plate. Also, the longer someone spends in training – the harder they “zone out” and start to shed focus. We keep exercise sessions short, and record them all as videos. People absorb increasingly can simply review what they’ve forgotten. This means we absolutely must train remotely. Travel time is really a killer (and totally waste)- therefore we can’t travel.

We keep the project tight, and discourage changeTraditional ERP partners encourage remodeling. Additional work means extra profit. Not for individuals. If we execute a Business Central project, we discourage any changes from the original project. Our projects aren’t super restrictive – nevertheless they do limit the features we’ll implement in “Phase 1.” Keeping the program tight, it is a lot less “creep” and the boss is normally much happier.

We still bill for customizations, but discourage them too Customizations include the a very important factor we can’t predict – therefore we also discourage them. Considering this new model, look for customers request a lot fewer also. They trust us more to know what we’re doing. Occasionally a customization is just a no-brainer, plus those cases we support and even encourage them. Having said that – we’ve not even half the customization we accustomed to.

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