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Add You - The 12 Cardinal Sins of ERP Implementation
Almost every organization is faced with the necessity of laying off employees for lack of work. Some layoffs are temporary and are expected by employees because of the nature of the job. These layoff can be planned for and may not be serious. In contrast, a change in operations or decline in business necessitates permanent layoffs. All of these involve employee separation from the organization. Separation may also arise from employee resignations and retirement.Layoff can be defined as an indefinite separation from the payroll due to factors beyond the control of the individual. The causes of layoff include decline in sales, shortage of raw materials, market fluctuations, delays in production and displacement caused by technology. Layoff is a temporary separation when it is initiated by an employer. But some times, it turns out to be permanent when production never picks up. Layoff is considered to be a serious issue because of the involvement of human sentiments and adjustment problems.Seniority rule may be followed for layoff, as often demanded by unions. When seniority is explicitly stated as the primary factor, long-service employees know that they will not be the first to go if operations decline, and they have a pretty good idea of what to expect in the future.Seniority is a highly complex issue. It is perplexing issue to determine what type of seniority should be used during layoff periods. Obviously, the union stresses the company wide seniority system. In cases where this type of seniority is used, the long
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.
(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.
Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining funct
So many business leaders and MBA professors say that cutting prices actually hurts profits and it hurts the industry and no one wins. This may be well documented in industries where price competition was not applied correctly or one company started dumping into the market in order to increase market share, but if a company is truly on the ball and has their systems, supply chains, manufacturing processes and management under control and they are operating as efficiently as possible, then their business model should allow them to win a price war.In fact in reality; There is nothing wrong with winning on Price! And there is nothing wrong with winning. Artificial market or industry price boosting actually can be a bad thing, because it makes companies weak and fat, instead of lean and trim and ready to complete the marathon at a record breaking pace. I would like to state for the record that if you cannot beat your competition on price if they start a price war, then you are not as efficient as you should be.In that case you are too fat and no longer have the agility of a start up in the market place and have slipped into a micro-managed stodgy, bureaucracy and well, in that case, my Dear Sir, I am not impressed, because I think you are weak and have lost your competitive edge and therefore my friend you better check six, because the whole nine yards are loaded and we plan to win, using any and ALL methods possible including perhaps cutting price to do so. Consider all this in 2006.
Enterprise Resources Planning (ERP) is an outgrowth of Material Requirements Planning (MRP) initiated in the 1970's as a new computer-based approach to planning and scheduling of material requirements and inventory, featuring the time-phased order point. MRP evolved to MRP II (Material Resources Planning) the "closed loop" process, to Business Requirements Planning (BRP) and eventually to ERP. As MRPII came into vogue in the late 1970's and early 1980's, software companies began to develop software packages around MRPII concepts.
At the same time, research of integrated data bases was in progress at a university, and out of that research emerged data base management systems (DBMS). One of the earliest successful commercially-produced data base management systems was IDMS (for IBM-based systems) and DBMS (for DEC-based systems) produced by Cullinane, who's company name was later changed to Cullinet. IMS, a structured data base management system for high transactions, was another data base management system produced by IBM.
The idea of the integrated data base as the engine for fully integrated software was probably one of the greatest outgrowths of Ollie Wight's and Dave Goddard's MRP. Eventually, the acronym ERP was conceived to represent what had already been developed by software companies.
The early software packages were developed by way of a transactional approach, and were highly unfriendly to a user. With the advent of the personal computers, the development of Microsoft's Windows NT, and the mid-range IBM AS/400 computer, client-server systems began to emerge. Windows, used as the base operating system, allowed software packages to become more and more user-friendly.
Today, ERP systems have proliferated extensively, and have reached a stage where development has become industry specific. Thus it is plausible to search for an ERP package developed for one's specific industry idiosyncracies.
The Issues
The biggest single issue in ERP is the failure of a successful implementation. It is mind-boggling to continually encounter companies who make major ERP gaffes in this day and age, especially since most of the trials and tribulations of MRPII implementation were suffered and learned from in the early 1980's with alpha, beta and gamma releases.
So what constitutes failure? Several thing come to mind:
(1) Not making the promised return on investment,
(2) Inordinately extending the implementation schedule and start-up date,
(3) Running over budget by unconscionable variances,
(4) Grinding the organization to a crawl pace, or the severest of all consequences,
(5) Stopping production and/or not delivering orders to your customers.
Industry statistics show that >60% of ERP implementation starts historically fail. Does this mean that you are doomed from the start? Of course not, if you learn from the mistakes of others. So the pertinent question is what are the main causes of ERP failure and what can be done to prevent this from happening to you?
The 12 Cardinal Sins of ERP Implementation
There are twelve major reasons for why companies get bogged down or fail in implementing ERP.
(1) Lack of Top Management Commitment
The propensity of top management to delegate the oversight of an ERP implementation to lower management levels often results in (1) being "out of touch" with critical events, or (2) the lack of understanding of the size, scope, and technical aspects of the project, and subsequently, the lack of proper commitment of time and resources required for a successful implementation. The result is a failure waiting to happen.
(2) Inadequate Requirements Definition
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.
(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.
Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining functi
Small businesses owners today are aware of the importance of carving an image in the minds of their prospective clients. They realize the effect of a catchy business name, a distinctive logo and the perfect slogan as well as the effective execution of their brand through appropriate marketing material and advertising.For a small business to stand out in the minds of their prospective clients, it is not enough to just look the part, they have to be the part. Thanks to developments in technology and the propagation of information, prospects today are just as savvy as business owners. Put yourself in the shoes of your clients; would you rather go with a firm that looks the part and makes huge promises or one with a record of keeping their promises? Far greater than a good image is a good reputation, for an image is who you say you are but your reputation is who others say you are based on their encounter with you or that of another.It is essential that your reputation lines up with your image; your reputation is mostly influenced by the customer experience you provide. Here are a few tips to help you build a solid reputation and reinforce your image:Keep your promises. Don’t promise your clients the moon and the stars if you cannot deliver. Breaking a promise affects you integrity and the disappointment your client experiences may result in the severance of the relationship depending on the severity of the situation. Offer what you are capable of delivering.Be original. Trying ha
The idea of the integrated data base as the engine for fully integrated software was probably one of the greatest outgrowths of Ollie Wight's and Dave Goddard's MRP. Eventually, the acronym ERP was conceived to represent what had already been developed by software companies.
The early software packages were developed by way of a transactional approach, and were highly unfriendly to a user. With the advent of the personal computers, the development of Microsoft's Windows NT, and the mid-range IBM AS/400 computer, client-server systems began to emerge. Windows, used as the base operating system, allowed software packages to become more and more user-friendly.
Today, ERP systems have proliferated extensively, and have reached a stage where development has become industry specific. Thus it is plausible to search for an ERP package developed for one's specific industry idiosyncracies.
The Issues
The biggest single issue in ERP is the failure of a successful implementation. It is mind-boggling to continually encounter companies who make major ERP gaffes in this day and age, especially since most of the trials and tribulations of MRPII implementation were suffered and learned from in the early 1980's with alpha, beta and gamma releases.
So what constitutes failure? Several thing come to mind:
(1) Not making the promised return on investment,
(2) Inordinately extending the implementation schedule and start-up date,
(3) Running over budget by unconscionable variances,
(4) Grinding the organization to a crawl pace, or the severest of all consequences,
(5) Stopping production and/or not delivering orders to your customers.
Industry statistics show that >60% of ERP implementation starts historically fail. Does this mean that you are doomed from the start? Of course not, if you learn from the mistakes of others. So the pertinent question is what are the main causes of ERP failure and what can be done to prevent this from happening to you?
The 12 Cardinal Sins of ERP Implementation
There are twelve major reasons for why companies get bogged down or fail in implementing ERP.
(1) Lack of Top Management Commitment
The propensity of top management to delegate the oversight of an ERP implementation to lower management levels often results in (1) being "out of touch" with critical events, or (2) the lack of understanding of the size, scope, and technical aspects of the project, and subsequently, the lack of proper commitment of time and resources required for a successful implementation. The result is a failure waiting to happen.
(2) Inadequate Requirements Definition
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.
(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.
Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining funct
Are you sitting at your desk dreamily imagining yourself on a South Seas vacation? Or maybe a rollicking holiday with the family? Or maybe you’d prefer to stay home and watch some DVDs.Wanting to take some time off shouldn’t make you feel guilty. In fact, in her new book, “Time Off for Good Behavior,” Mary Lou Quinlan writes that seven out of 10 people fantasize about leaving work for a few months.What’s more, she reports that taking a break can help you feel less burned out. It can help you organize your life goals. Most people don’t realize that taking time off--guilt free--isn’t as difficult as it might seem.So don’t feel like you’re condemned to remaining chained to your desk. Here are six options you can check out:1. Make a plan. Think about why you want time off. Do you just need a few days to relax? Or are you looking to completely assess your career?2. Figure out how much time off you’ll need to come back fully refreshed.3. Count your days off. Figure out how many vacation days you have. Add in any remaining sick or personal days.4. Check out company policy. You may be eligible for a sabbatical with full or partial pay. Or you may have the option of re-entering the company after an unpaid leave.5. Talk to your employer. If the company doesn’t have a policy or spell out the details of flexible time off, now is the time to find out what the company can offer you.6. Negotiate for what you need.The point is you shouldn’t be afraid to take some needed
The Issues
The biggest single issue in ERP is the failure of a successful implementation. It is mind-boggling to continually encounter companies who make major ERP gaffes in this day and age, especially since most of the trials and tribulations of MRPII implementation were suffered and learned from in the early 1980's with alpha, beta and gamma releases.
So what constitutes failure? Several thing come to mind:
(1) Not making the promised return on investment,
(2) Inordinately extending the implementation schedule and start-up date,
(3) Running over budget by unconscionable variances,
(4) Grinding the organization to a crawl pace, or the severest of all consequences,
(5) Stopping production and/or not delivering orders to your customers.
Industry statistics show that >60% of ERP implementation starts historically fail. Does this mean that you are doomed from the start? Of course not, if you learn from the mistakes of others. So the pertinent question is what are the main causes of ERP failure and what can be done to prevent this from happening to you?
The 12 Cardinal Sins of ERP Implementation
There are twelve major reasons for why companies get bogged down or fail in implementing ERP.
(1) Lack of Top Management Commitment
The propensity of top management to delegate the oversight of an ERP implementation to lower management levels often results in (1) being "out of touch" with critical events, or (2) the lack of understanding of the size, scope, and technical aspects of the project, and subsequently, the lack of proper commitment of time and resources required for a successful implementation. The result is a failure waiting to happen.
(2) Inadequate Requirements Definition
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.
(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.
Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining funct
Businesses these days are stifled with inefficiencies brought on by bad legislation and brain dead regulators. But businesses have a choice; we have a way to fight the system. One way is to stop producing, raise prices and invest in better markets with higher returns and less regulation. As a matter of fact this is what many businesses do and are doing.Look at all the off shoring of jobs and factories in other countries by US based corporations. Why are they doing this? Because it just makes no sense to beat your head against the wall with over regulation, Sarbox and folks like Elliot Spitzer with his extortion tactics. Recently someone wanted to buy a franchise from our company in California. He writes us and puts on the email address title; “RE; Franchise Opportunity” even though there was no first email from this gentleman and he then states:“I'm interested in buying a franchise for the San Diego, CA market. Please send along any pertinent information I may need, along with information regarding "exclusivity" arrangements. I've never owned a franchise, but I have owned and operated any number of businesses over the years.”We email him back:“We are not selling franchises anymore in Southern California and as a matter of fact we are setting up units in San Diego right now. This business is too good to share profits with franchisees in So. Cal. Especially in such a litigious state. California just is not worthy of the incredible advantage franchising brings to the consumer and local economies. We would rathe
The 12 Cardinal Sins of ERP Implementation
There are twelve major reasons for why companies get bogged down or fail in implementing ERP.
(1) Lack of Top Management Commitment
The propensity of top management to delegate the oversight of an ERP implementation to lower management levels often results in (1) being "out of touch" with critical events, or (2) the lack of understanding of the size, scope, and technical aspects of the project, and subsequently, the lack of proper commitment of time and resources required for a successful implementation. The result is a failure waiting to happen.
(2) Inadequate Requirements Definition
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.
(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.
Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining funct
What are you interested in? We all have a passion for something. So, what is your passion?Are you actively seeking information about your passion? Knowledge, providing it is correct knowledge, will increase your power.In this century there is an increasing demand for experts in so many fields. Everything is becoming more and more specialized.Let me give you an example. At the turn of the 19th Century, all you needed to do to be an Accountant was to be good with numbers and undertake some training with other accountants. Later, formal qualifications were required. It consisted of a special course called a Diploma where up to a dozen specific subjects had to be studied.As technology increased and finance, book-keeping and taxation became increasingly more complex, more subjects were required to be undertaken, presently around three dozen. The Diploma was replaced with a Degree.Accountants can specialize in general accounting, management accounting, taxation accounting and other specific areas. Employers pay much more for specific talents and qualifications than they do for general labour.So, are you seeking knowledge in your chosen field? Are you updating your knowledge platform on a regular basis? If you are not then you are almost certainly going backwards. This means that you will be rapidly overtaken by others who are embracing new technology and absorbing the knowledge that goes along with it.To succeed today you need to specialize in a niche market.Let me ask you a question. Let
Surveys have shown that inadequate definition of functional requirements accounts for nearly 60% of ERP implementation failures. This is simply a matter of not comprehensively and systematically developing a quality set of functional requirements definitions. This leads to the second greatest cause of ERP implementation failures: poor package selection.
(3) Poor ERP Package Selection
Poor package selection occurs when a company has inadequately developed functional requirements definitions. It also occurs when staff members assigned to ERP projects do not take the time to run the screens of the new system, as they would during their daily work tasks, to find out if the software package features are adequate for their needs.
Another reason we have found is executives, familiar with an ERP system from a last job they held, implement the same system in their new company without defining functional requirements. We have also encountered companies who made major gaffes by selecting a package at the top levels of a company without intimately knowing its characteristics. What often results from this is the ERP package doesn't fit the organizational needs, or that the package selected takes longer to process daily work tasks.
We have also seen executives select a distribution package for a manufacturing environment, or a manufacturing package for a distribution environment, for obscure reason, such as liking one salesman over another.
(4) Inadequate Resources
The third greatest reason for ERP implementation failures is inadequate resources. Many companies will attempt to "save dollars" by doing everything on an overtime basis, whether or not there are adequate skills within the company, extending individual work loads to 150%. This approach can be a "kiss of death" for the program. Time and time again we run across this mistake in ERP implementations. The financial and emotional drain of what seems sometimes to be perpetual extensions, reschedules and delays of implementations takes its toll. People burn out after having put in extensive hours over a long period of time.
(5) Resistance to Change/Lack of Buy-in
The lack of a change management approach as part of the program can prevent a program from succeeding. Resistance to change is quite often caused by (1) A failure to build a case for change, (2) Lack of involvement by those responsible for working with changed processes (3) Inadequate communication (4) Lack of visible top management support and commitment, and (5) Arrogance. A lack of buy-in often results from not getting end-users involved in the project from the very start, thereby negating their authorship and ownership of the new system and processes.
(6) Miscalculation of Time and Effort
Another cause of ERP implementation failure is the miscalculation of effort and time it will take to accomplish the project. Companies who treat an ERP selection, evaluation and implementation comparable to buying a washing machine are doomed to failure.
(7) Misfit of Application Software with Business Processes
One of the main causes of ERP implementation failure is the misfit of application software with the company business processes. This failure -- to examine underlying business process flaws, and integrate the applications with the business processes, causes loss of productivity and time, and ultimate benefits.
(8) Unrealistic Expectation of Benefits and ROI
Another significant cause for ERP implementation failure is the unrealistic expectation of benefits and return on investment. Software providers are notorious for overstating the benefits in terms of ROI, when the total costs of the project have been understated. Often left out of the total costs are costs of planning, consulting fees, training, testing, data conversions, documentation, replacement staffing, and the learning curve performance drop. When this happens, a company doesn't stand a chance of achieving the ROI it anticipated.
(9) Inadequate Training and Education
Another of the biggest causes of ERP implementation failure is inadequate education and training, which are almost always underestimated. ERP-related training is crucial as most employees must learn new software interfaces and business processes which affect the operation of the entire enterprise. The corporate culture is impacted by changes in the company’s business processes, and shortchanging this part of the ERP implementation leads to much pain and suffering downstream.
(10) Poor Project Design and Management
A major mistake is to short-cut cr
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