Traditional ERP Implementations
Traditional ERP implementations can be extremely high risk, for the partner deploying them and for the customer. This is the reason almost nobody offers the elusive fixed fee. The potential risks are simply an excessive amount of.
The previous Dynamics NAV project costs were high because legacy methods can be very expensive. The standard implementation follows a number of phases originally put down by Microsoft inside a waterfall project framework. Waterfall project management has been shown being costlier as opposed to modern “agile” approach, that’s depending on LEAN techniques.
The approach that has been utilized by virtually everyone since ERP has been in existence is to bill “Time and Material.” Because of this customers spend on some time spent by consultants, nomatter just how or bad they may be. This moves the danger through the implentor to the customer almost entirely.
The reality is that you can still find massive risks for that partner with one of these waterfall projects. I’ve seen Most cases where partners were sued or threatened when these projects go very badly.
I started thinking about the way we had to change this seeing a LinkedIn post that shared a piece of writing on why “Time and Material Billing is Unethical.” I became really struck through the arguments. The writer asked an issue i think summed it fantastically well:
If a restaurant charged you to the some time to material which it took to cook your steak, how does one feel?
This probably sparked my first real thoughts about how you can~the way to~tips on how to~the best way to~ways to stop as being a some time and material business.
ERP Prices are incredibly unpredictable
The primary videos that I uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I’ve spent recent years since figuring out approaches to remove that inaccuracy.
Obviously the ultimate way to give accurate estimates was to be fixed fee. The trouble is that traditional approach is really high-risk for that partner. It makes it scary to supply a fixed fee. unless you do it properly, you have a large amount of trouble. We have worked very hard to develop a method that I think is different.
Applying LEAN Thinking to ERP Implementations
There is a movement to utilize LEAN thinking to service activities. Generally speaking, LEAN is approximately removing waste from a physical product, but it can be applied to projects too.
I created my personal variations of waste in ERP projects.
First – there’s time spent with the wrong resource.
This is typically if somebody who costs too much does something that someone that is paid a lot less are able to do, or can perform it faster.
Second – you can find unnecessary steps
I have discovered this occurs when folks perform steps to “cover their butts.” Lots of project management falls into this. It also comes about when consultants (compensated on hours billed) push unnecessary work.
Third – you can find wasted tasks
Sometimes customers need to do stuff that we, as ERP consultants, know will not work. In the traditional implementation we now have no economic motivation to stop it.
Lastly – you will find there’s “bleed” of info
This is usually about the customer. Typically it’s when the customer doesn’t remember their training as they do not spending some time doing work in the device enough.
Why ERP Implementations Need to Change!
Whenever we started doing cloud based ERP implementations with Microsoft Dynamics NAV it was common for clients to spend $100,000 to the software and pay $200,000 because of their implementation.
After you enter in the whole world of the cloud, where Microsoft Business Central is $100 monthly per user, things change. It’s hart to see a person they are going to spend $2000 monthly for software yet still pay $200,000 for implementation.
Therefore we did what our customers do. We set an expense we thought the marketplace would support, and we worked backwards to manipulate our internal costs and make money doing that. Our company is manufacturing companies. They have to estimate an amount, and then stick to it. They can not go to their customer and say “we have to bill you more because we had been inefficient within our production process.” They might go out of business instantly.
The new approach to ERP implentations.
I’m more of a manufacturing expert than a technology expert. Few manufacturers think regarding projects with project managers (Engineer to acquire will be the exception). They generally think regarding operations managers and standard work instructions.
I applied this thinking to ERP projects. It can help that most carry out is implement ERP for manufacturers.
Here’s would be the main steps that helped us dramatically slow up the risk (and costs) of ERP projects.
We just do one kind of projectFocusing exclusively on manufacturing, as well as in small facilities, meant that we will refine and obtain better with every project. We glance on the process as a repetitive, repetable process. This gets reduce the up front design of the job plan etc. The project management disappears altogether, so we reduce that waste enormously.
We offset easy but tedious work to the customerWhen a $200 each hour consultant does what amounts to a clerical task, that’s waste. We train absolutely free themes to perform many of the tedious tasks. Apparently sorts far better done by the customer. Business Central makes a lots of this easier because it has great tools for customers to complete tasks that was previously hard. There are two of the specifically which can be key: Reports and knowledge Loading
We train people to edit formsCustomers know what they really want their invoice to appear like. They do know where they desire the due date on his or her PO. It really is way easier when we guide them to improve these products compared to it for the children.
We train visitors to load data into the systemData loading can be a task we assign to some co-op student after a couple of hours training. The reality is, when customers “get” how this is accomplished – they do a far better job cleaning their data and things go much smoother!
We keep workout sessions shorter and VideoPeople forget what they’re taught. It goes without saying of life. You do have a lot on your plate. Also, the more time somebody spends in training – the more they “zone out” and begin to get rid of focus. We keep services short, and record them all as videos. People absorb many can simply review what they’ve forgotten. Therefore we absolutely must train remotely. Travel time is often a killer (and totally waste)- and we all can’t travel.
We maintain the project tight, and discourage changeTraditional ERP partners encourage extra work. Remodeling means extra profit. Not for individuals. Once we perform a Business Central project, we discourage any changes in the original project. Our projects aren’t super restrictive – nonetheless they do limit the features we are going to implement in “Phase 1.” By continuing to keep the program tight, it is a lot less “creep” and also the boss is normally much happier.
We still bill for customizations, but discourage them also Customizations would be the one thing we can’t predict – so we also discourage them. Given this new model, find customers require a lot fewer also. They trust us more to understand we are doing. Occasionally a customization is just a no-brainer, as well as in those cases we support and even encourage them. Even so – we’ve got fewer than half the customization we accustomed to.
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