Diagnose Your Inefficiency Potholes

potholesMany employees tend to complain about work-related inefficiencies as much as Wisconsinites bemoan the craters (aka potholes) left in the roads each winter. In response, companies usually acknowledge that making improvements is critical, and do their part in researching Enterprise Resource Planning (ERP) options. But, are all work-related inefficiencies exclusively due to a legacy system? Are people jumping the gun in assuming so, or are they misidentifying a process problem? Could some of these issues disappear by making a few simple process adjustments? Without empowerment and support, all the technology in the world won’t move your business forward.

There is no exact formula to determine if a problem stems from a bad system or a bad process; but asking yourself some basic questions could help you figure out where the problem lies. For example:

  • Would implementing new process improvements really resolve the problem?
  • Could implementing new system functionality resolve the problem and also provide a competitive edge?
  • Do the system benefits outweigh process benefits?

The following steps should aid you in your diagnosis and decision-making:

Create a problem Inventory 

Interview Subject Matter Experts (SME’s) from the various departments affected to develop a problem inventory list.

Identify process-related problems

Identify all process-related issues from your inventory list. Ask yourself: What is the root cause of the problem? Is there a lack of communication, lack of enforcement, or lack of an actual process? If you answered yes to any of these questions, the problem likely stems from a process issue.

Examples of process-related problems include:

  • A customer is upset that they’re getting bounced around
  • Sales Agents aren’t required to track or manage lead information
  • No official process for returns exists. (If an actual documented process cannot be provided, there probably isn’t one.)

These items may also range in severity. While going through this process, consider assigning priority levels or at least identify quick fixes.

Make process improvements where possible

This step is important because it improves overall business processes and productivity by making identified improvements. It also validates problems that can be resolved realistically. This step may take a few weeks to a few months to transpire, but it provides important insight and brings the process to the next step.

Focus on system-related problems

Once process-related problems are identified and resolved, one is able to ascertain that the remaining problems are system-related and decide if a new ERP system would be advantageous.

Examples of system-related problems include:

  • No visibility to inventory availability
  • Multiple customer masters, item masters, and vendor masters
  • Manipulation applied to reports (current system lacks reporting functionality)

This step will not completely resolve a company’s problems and inefficiencies, nor will it guarantee employee satisfaction. It will, however, allow for a more focused approach when considering solutions. It also provides the added benefit of some inexpensive process improvements along the way.

Total Recall: The True Cost of Foodborne Illness

All eyes are on Tyson this week after their recall of chicken nuggets with a trace of plastics. Unfortunately, it’s not just the makers of highly processed foods that are struggling with recalls right now.

As April unfolds, we see that the organic food industry is not immune either:

  • Three purveyors of organic black peppercorns here, here and here have also announced recalls this week.
  • And, the real shocker is this one: Tea Tree Oil mouthwash is recalled because of bacterial contamination, despite the many websites and even an NIH article touting tea tree oil’s antibacterial properties!

Traceability of the root cause is difficult for both contaminated food and hazardous consumer products, as the recent Fitbit Force recall shows. There still doesn’t seem to be an answer as to what material in the wristbands caused so many users to break out in a rash.

As the following infographic shows, foodborne illness is a serious issue, and some companies are better than others at weathering a recall crisis. As we have said in earlier blog posts, social media has been a real game changer during recent recall crises, in ways both positive (providing a way to tap into rising consumer concerns to spot quality issues early) and negative (the viral consumer frustration response at any lag in response or mis-step during a recall crisis).

Total Recall: The True Cost of Foodborne Illness infographic for disaster recovery and product recalls

 

 

The Vale of False Best Practices

What is a best practice and why you should and sometimes should not accept them.

The way ERP vendors speak about “best practices,” you would expect accompaniment from a bell choir and a sonorous, celestial host. Best practices! Let us all bow and acknowledge their wisdom!

A best practice in ERP-speak is nothing more than a set of process steps, supported by underlying functionality within the system, that a majority of system users agree works for them. This is completely understandable from the perspective of an ERP vendor, who wants to sell software to the widest possible audience.

What better way to do that than to incorporate into the software functionality and processes that provide value to the largest number of prospects? Does that mean that best practices are nothing more than a marketing ploy?

Well, yes and no. If your accounting department is not doing true three-way matches between orders, receipts, and invoices, then an automated three-way match process would probably be a best practice for you because you are behind the curve. So, best practices built into ERP software can be a huge win for companies that are behind the technology curve.

Cherdonsidering that the rest of your industry has probably already adopted better practices, it is not invalid to hope to move forward by joining the herd. I grew up in Texas where herds are not to be disparaged. They provide a livelihood to many and can be quite tasty. Being one-in-a-herd is sometimes the right place to be. Deciding when to separate yourself from the herd is the hard part.

Consider your accounting department again – when was the last time you heard anyone say that their accounting processes provided a competitive advantage or made them stand out in their market? Right. It doesn’t happen. That’s because some processes are me-toos – sure you want to do them the right way and maybe save some money, but they are simply not places where significant investment is warranted. Enough investment, yes. More than that, no.

If, however, you introduce new products in half the time as your nearest competitor, then that is an advantage you want to not just protect, but enhance. That is an area where additional investment is warranted.

Here’s the stark reality. If you are leading the pack within your market, it is unlikely that any ERP software will natively support best practices within those areas where you are a market leader or visionary. Why? Because you are an outlier. A trend setter. Once people figure out how you are leading the market, and then replicate that within their companies and in their technology in order to catch and then dominate you, then those become best practices.

Notice that best practices can make your company more efficient, but they will NOT make you a market leader. Only innovation and ingenuity can do that, and while those are always best practices, they are also uncommon in the herd.

Landscape of ERP Pitfalls – New Map Discovered!

ERP MapOne of our young, and deeply curious, co-workers discovered an artifact – a map – while browsing a dusty, old book store in Boston. She bought it for a pittance and took it home where she discovered the key to cracking its codes. No, she will not share those with us – something about job protection…

The map contains the key to how so many ERP implementations stumble and – this is most exciting – confirms that the Valley of Despair truly exists! Upon further translation, she has identified the title on the map as “The Land of ERP Pitfalls”. While translation continues, we have already identified several locations on the map that are both illuminating and thought provoking.

We are moving forward with a set of blog topics involving these pitfalls and key success factors for successful ERP implementations as they are uncovered from the difficult text of the map. h/t to the curious and talented young who illuminate the days of the middle aged, if we are wise enough to listen.

Redefining Success in People Terms

Success in people termsI suggested in my previous post that unmet business benefits, make ERP initiatives fail even when they are on-time, on-budget, and on-scope. If we spoke previously about failure, then let’s start here talking about success.

According to my dictionary, success is a noun with multiple meanings, yet the primary one is “the favorable or prosperous termination of attempts or endeavors; the accomplishment of one’s goals.” It’s not about the scope, timeline or budget, it’s all about the business GOALS.

So when we talk about redefining success – hitting your goals – in people terms, what does that mean? Defining where you intend to end is important, but so is defining how you expect to get there. Defining success in people terms means we also have to define how something will be made successful and who will do it.

Here are some of the “goals” customers have given us for implementing ERP:

  • To improve business performance and automation
  • To replace an old or legacy system
  • To better support the business across multiple locations
  • To better serve customers
  • To position the company for growth

Admirable reasons; terrible goals.

Why?

They can’t be measured and they give no clue how they could be achieved. They look good, but are sort of neutral and unobjectionable, actually saying very little.

When a client tells us they want to move to new ERP to improve business performance, it is the beginning of what becomes a very long – and critically important – discussion that looks like this:

What areas need improvement? Why? What would the improvements, by area, look like? What changes (people/org, role, process, system, or data) are required to achieve it? How will ERP enable this? How can we state this in measurable terms? What about timeframes for realization?

Starting with “improve business performance,” we can end with goals like this:

Through updated standards for purchase orders enforced in the Purchasing module at the field level, and through improved training of Buyers and weekly monitoring of conformance with these standards, we will eliminate 90% of incomplete purchase orders from flowing through the supply chain within three months of go-live.

By eliminating non-conforming purchase orders, we will reduce the effort of Accounts Payable clerks matching POs to vendor invoices which will be sufficient to eliminate three temporary clerk positions.

post-it-1Granted, this would be but one of many, many goals that would be documented to achieve “improved business performance.” But that is what it means to truly document goals within a business case and to define success in people terms.

Arriving on-time, on-budget, and on-scope are valid goals on any ERP implementation project. Anyone working in this business knows those goals are themselves hard enough to achieve. While they may be necessary when viewing ERP through the lens of an enterprise software implementation project, they are woefully inadequate when viewing ERP as a business transformation initiative.

If you want to really get your hands around how to make ERP successful, you have to spend the time, energy, and effort defining your goals more completely and concretely. They should enable and guide your implementation. If they don’t, head back to the whiteboard and lock the right people in the room until you get what you need. And if you don’t know what you need, get help defining it.

Top 5 Warning Signs you are on the ERP Desert Highway

desert carThere are many wrong turns on the road to the Desert of ERP Disillusionment.  Some teams go wrong right out of the gate. Here are the top five warning signs that your real destination is not the pinnacle of ERP success, but the dry parched sands of the desert.

1. Your steering committee is texting while driving. If your key decision makers are multi-tasking through every steering committee session, its easy for them to miss critical information they need to actually steer.

2. The distraction of backseat squabbling causes the PM to miss a turn.  Political infighting and lack of alignment among key stakeholders can be as difficult to manage as any carful of kids on a family roadtrip AFTER you have taken away their favorite electronic toys.

3. The driver is looking in the rearview mirror instead of the road ahead.  While there are some lessons to be learned from your last ERP implementation (how long ago was that?) , modern state of the art systems require significant behavior changes in the way users interact with information in the system.   If they are used to greenbar reports laid on their desks every morning, the gap may be too big to jump. 

4. You read a guidebook about the wilderness once….  You can’t learn all your survival skills from a book.  In life threatening terrain, there is no substitute for having an experienced guide on the team.  If you haven’t put experienced change leadership into place before you bid your consultants goodbye, you will have neither the insight to recognize the warning signs, nor the skill to lead your people out of the desert.

5. You ran out of gas!  You didn’t fill up at the last station because the ATM was out of cash, your credit card is maxxed out,  and you used your last dollars on Slurpees and Twizzlers for the kids.  If you fritter away your project budget on non-value added-customizations like moving fields on forms and cosmetic report changes, you won’t have money left to address any business critical requirements that come up late in the game.

(Hat tip to Mark Farrell for #5!)