If you are a small business thinking about purchasing an ERP, this article is for you.
For the past 18 years, I have been dedicated to helping small customers (less than 100 million in sales) here in Ontario with ERP. Over the last 5 years, our business has increasingly shifted to one where we sell Microsoft Dynamics GP rather than simply servicing ERP systems in the aftermarket. Over the years, I have seen many, many failed ERP implementations. Most of them have been from other vendors (besides us), but I’ve had my own ups and downs.
I think there are many reasons for those failures. This is my opinion on one of them…
Not understanding what you bought
Many companies go into the purchase of a system like Great Plains or a CRM system with the same expectations as buying a new server or upgrading a bunch of PCs. Despite many warnings and frequent meetings on the subject, they simply cannot visualize the “real” complexity of what they have purchased. They have done IT projects before, and the vendor has always managed to “make it happen”. It’s hard (sometimes impossible) for them to understand why this time is different.
Usually when you buy new hardware, you’re just upgrading something you already have to a newer, better version. You don’t change the way you do business. This is the key difference. The complexity of ERP systems revolves around “changing your business” and most small business owners don’t understand how complicated it really is.
“Dynamics GP has thousands of features and screens. How complicated could our business be compared to that?”
Your business IS that complicated. It has taken years and years to develop, and it has happened completely organically with little to no planning. You’re not just buying another piece of software to enhance a task or tasks you already do. You are buying something replace lots of tasks and activities that you take for granted. The change is significant and often shocking.
As a result of this, almost every customer I’ve come across (selling ERP) has thought they can let the vendor take care of everything. It’s very hard to wrap your head around the idea that the effort to implement an ERP requires even more of your own time (as a buying customer) than the vendor’s time. In fact, there is a point where the provider executes the job (assuming they are willing to pay) it will still fail completely!
To put it another way, this is not a situation where we (the vendor) can design a process change in our office, “build” it as if we were building a server, and deploy the entire project in a weekend in their offices. .
This seems really obvious at first glance… but it’s really hard to understand. Make sure you understand this before you buy your ERP system and you’ll save yourself a lot of pain and money!