Mason Joseph posted an update 4 months, 1 week ago
Traditional ERP Implementations
Traditional ERP implementations can be extremely dangerous, for the partner deploying them as well as the customer. This is why almost nobody provides elusive fixed fee. The potential for loss are just an excessive amount of.
The previous Dynamics NAV project costs were high because legacy methods are very pricey. The normal implementation follows a number of phases originally determined by Microsoft in a waterfall project framework. Waterfall project management has been proven to become more costly compared to the modern “agile” approach, that’s based on LEAN techniques.
The approach that is utilized by virtually everyone since ERP ‘s been around is usually to bill “Time and Material.” Because of this customers buy the time spent by consultants, nomatter just how or bad they’re. This moves danger in the implentor towards the customer almost entirely.
The reality is that it is possible to massive risks for the partner using these waterfall projects. I have come across Most all cases where partners were sued or threatened when these projects go very badly.
I began considering how you had to change this seeing a LinkedIn post that shared an article on why “Time and Material Billing is Unethical.” I had been really struck with the arguments. Mcdougal asked a matter which i think summed it down fantastically well:
If your restaurant charged you for that some time and material which it loved cook your steak, would you 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 serious amounts of material business.
ERP Cost is incredibly unpredictable
One of the first 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 working out approaches to remove that inaccuracy.
Obviously the simplest way to give accurate estimates would have been to be fixed fee. The thing is that traditional approach is so risky for that partner. It can make it truly scary to supply a fixed fee. unless you do it properly, you have a lots of trouble. I have worked very hard to develop an approach i think is unique.
Applying LEAN Thinking to ERP Implementations
You will find there’s movement to apply LEAN thinking to service activities. Generally speaking, LEAN is approximately removing waste from the physical product, but it can be applied to projects too.
I invented my own, personal variations of waste in ERP projects.
First – there exists time spent with the wrong resource.
This really is typically if somebody who costs too much does something which somebody that will be paid much less can do, or are capable of doing it faster.
Second – you will find unnecessary steps
I have discovered such a thing happens when we perform steps to “cover their butts.” Lots of project management software falls into this. It also occurs consultants (compensated on hours billed) push unnecessary work.
Third – there are wasted tasks
Sometimes customers might like to do items that we, as ERP consultants, know won’t work. Within a traditional implementation we now have no economic motivation to stop it.
Lastly – there is a “bleed” of info
Normally, this is on the customer. Typically it’s if the customer doesn’t remember their training as they do not spending some time doing work in the system enough.
Why ERP Implementations Must Change!
If we started doing cloud based ERP implementations with Microsoft Dynamics NAV it turned out common for purchasers to cover $100,000 for the software and pay $200,000 for implementation.
After you type in the arena of the cloud, where Microsoft Business Central is $100 monthly per user, things change. It’s hart to see a customer they’ll spend $2000 monthly for software but still pay $200,000 for implementation.
Therefore we did what our customers do. We set a price we thought the market industry would support, so we worked backwards to regulate our internal costs making money doing that. Our customers are suppliers. They need to estimate an amount, then stick to it. They are unable to check out their customer and say “we have to~require to bill you more because we had arrived inefficient inside our production process.” They might close shop over night.
The modern approach to ERP implentations.
I’m a greater portion of a manufacturing expert compared to a technology expert. Few manufacturers think with regards to projects with project managers (Engineer to buy will be the exception). Many of them think when it comes to operations managers and standard work instructions.
I applied this thinking to ERP projects. It may help that most we all do is implement ERP for companies.
Here’s will be the main steps that helped us dramatically decrease the risk (and costs) of ERP projects.
We only do one form of projectFocusing exclusively on manufacturing, as well as in small facilities, meant that we might refine and get better with each project. We look with the process as being a repetitive, repetable process. This kind of gets rid of the in advance form of the work plan etc. The work management disappears, so we reduce that waste enormously.
We offset easy but tedious attempt to the customerWhen a $200 each hour consultant does what comes from a clerical task, that is waste. We train the customers to accomplish some of the tedious tasks. Apparently , forms of far better made by the client. Business Central produces a lot of this easier since it has great tools for clients to accomplish tasks that used to be hard. There’s two of those in particular which can be key: Reports information Loading
We train people to edit formsCustomers know what they want their invoice to take a look like. They do know where they really want the deadline day on their own PO. It’s way easier as we guide them to switch these items compared to it on their behalf.
We train visitors to load data to the systemData loading is often a task we assign with a co-op student after a few hours training. The truth is, when customers “get” how this is done – 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. Without question of life. There is a lot on your own plate. Also, the more an individual spends in training – the greater they “zone out” and commence to reduce focus. We keep workout sessions short, and record every one of them as videos. People absorb many can easily review what they’ve forgotten. Therefore we absolutely must train remotely. Travel time is a killer (and totally waste)- so we can’t travel.
We keep your project tight, and discourage changeTraditional ERP partners encourage work. Work means extra profit. Not for people. Once we do a Business Central project, we discourage any changes through the original project. Our projects aren’t super restrictive – but they do limit the features we’re going to implement in “Phase 1.” Keeping the master plan tight, there is lots less “creep” as well as the boss is normally much happier.
We still bill for customizations, but discourage them as well Customizations will be the one thing we simply cannot predict – so we also discourage them. Considering this new model, we discover customers ask for a lot fewer also. They trust us more to know what we are doing. Occasionally a customization is only a no-brainer, and in those cases we support as well as encourage them. However – we’ve got fewer than half the customization we used to.
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