ERP Assessment and Software Selection Framework

We recently posted a white paper about best practices in ERP assessments and software selection. After reading the white paper, many readers sent emails asking for more detail on how one might go about the whole ERP selection process.

As a result, we have made a summary example of our typical ERP assessment and selection approach available to the ERP community. Visit our resource center to view the summary overview of the tasks and deliverables we typically recommend and deliver when we help clients through the ERP selection process.

ERP Readiness Benchmarks: Do Companies Know What They're Getting Themselves Into?

One of our recent posts highlighted the importance of assessing readiness before any ERP or large IT project. Panorama Consulting Group provides a free on-line ERP readiness assessment tool, and the preliminary results from participants so far reveal some interesting thoughts.

It should be noted that the sample size is still relatively small (38 companies so far) and the initial data analysis is not yet validated in detail, but the initial benchmarks are interesting. For example:

1. 42% of participants say that their operations are poorly integrated across office locations
2. Over 50% of participants rate their current organizations poor in all the major areas we asked about: responsiveness to customers, efficiency, effectiveness, visibility to operational data, and integration between systems
3. Over 90% of companies have experienced a significant organizational change (in addition to ERP) over the last 3 years
4. Only 20% of participants have dedicated business process, performance measurement, or organizational change management groups in their organizations
5. 55% say employees at their organizations are poor at adapting to change
6. Only 15% of those planning to embark on an ERP project have completed a business case or ROI analysis

While we can begin to draw several conclusions from some of the data we've collected so far, the most significant observation is that organizational change management will be crucial to the success of these projects. These companies will face great obstacles during their implementations, and they will find it very difficult to deliver measurable business value without solid organizational change and benefit realization plans.

More data analysis over time will continue to shed light on organizational readiness. I'll keep you posted on the results. In the meantime, feel free to visit our resource center for more ERP tools and information.

ERP Readiness Assessment Tool

If you were interested in our recent post regarding ERP readiness, there is now an online ERP readiness assessment tool that will help assess your organization's current level of business preparation for an ERP or large IT project. ERP readiness is the first step of an overall ERP Benefits Realization program and it also assists in ERP project risk management and mitigation.

Click here to take the online assessment, which is a brief series of questions designed to assess fundamental aspects that should be in place for any ERP or IT project.

Assessing ERP Readiness

Determining an organization's ERP readiness for an ERP or large IT implementation is often one of the most difficult parts of moving forward with such a large undertaking. It is easy to get caught up in all the potential benefits of ERP and forget that there are some fundamental business issues to consider before proceeding. For example, to determine your organization's ERP business readiness, it is useful to ask the following questions:

• How standardized are your current business processes across the globe?
• Does your company currently have an internal organizational design, business process, and/or communications group?
• How much turmoil has your company faced in the last 3 years (e.g. layoffs, other large IT projects, management shakeups, etc.)?
• What level of executive sponsorship do you currently have in your organization?
• How many internal resources do you have committed to help with the project, including to address the business process aspects?
• Do you have a documented business case, assumptions, and ROI?
• Have you established project and business measures for success?
• Is your company culture conducive to accept such a large change initiative?
• Does your company operate as a single company across the globe, or more as a siloed group of organizations?
• Do you have a detailed budget, including line items for miscellaneous and unanticipated expenses?
• Most importantly, what is your motive for implementing ERP?

While your answers to these questions may vary, they will inevitably impact your level of project and business risk. They will also determine what additional mitigation efforts you may need to take. These are all factors that need to be considered as part of an overall ERP readiness assessment.

I am in the process of developing an ERP business readiness and risk assessment checklist. Check back here or on our web-site in the near future to take a look.