Traditional ERP Implementations

Traditional ERP implementations are incredibly risky, for both the partner deploying them and also for the customer. That is why no one provides elusive fixed fee. The risks are only an excessive amount of.

The existing Dynamics NAV project costs were high because legacy methods are expensive. The typical implementation follows a number of phases originally lay out by Microsoft within a waterfall project framework. Waterfall project management has been confirmed to be costlier compared to modern “agile” approach, that’s depending on LEAN techniques.

The approach that has been utilised by virtually everyone since ERP has existed is usually to bill “Time and Material.” Which means customers spend on enough time spent by consultants, nomatter just how or bad they’re. This moves danger from your implentor to the customer almost entirely.

In fact you may still find massive risks for the partner using these waterfall projects. I’ve seen MANY cases where partners were sued or threatened when these projects go very badly.

I started contemplating the way we needed to change this reading a LinkedIn post that shared a write-up on why “Time and Material Billing is Unethical.” I had been really struck from the arguments. The article author asked a question that I think summed it down fantastically well:

If a restaurant charged you for the some time to material it latched onto cook your steak, would you feel?

This probably sparked my first real opinion of how to stop as being a some time and material business.

ERP Pricing is incredibly unpredictable

Among the first videos that I uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I’ve spent the years since determining approaches to remove that inaccuracy.

Obviously the best way to give accurate estimates ended up being to be fixed fee. The thing is that traditional approach is really high risk for your partner. Celebrate it genuinely scary use a fixed fee. unless you do it properly, you are in a large amount of trouble. We have worked very hard to develop a method i think is exclusive.

Applying LEAN Thinking to ERP Implementations

You will find there’s movement to use LEAN thinking to service activities. Generally speaking, LEAN is about removing waste from a physical product, but it can be applied to projects too.

I developed my own variations of waste in ERP projects.

First – there exists time spent with the wrong resource.

That is typically if somebody who is too expensive does a thing that someone who will be paid a smaller amount are capable of doing, or can perform it faster.

Second – you’ll find unnecessary steps

I have found such a thing happens when people perform steps to “cover their butts.” A lot of project management falls into this. Additionally, it comes about when consultants (compensated on hours billed) push unnecessary work.

Third – there are wasted tasks

Sometimes customers might like to do stuff that we, as ERP consultants, know won’t work. Within a traditional implementation we’ve got no economic motivation to prevent it.

Lastly – there is a “bleed” of info

It’s usually on the customer. Typically it’s in the event the customer doesn’t remember their training because they do not spend some time doing work in the machine enough.

Why ERP Implementations Must Change!

Whenever we started doing cloud based ERP implementations with Microsoft Dynamics NAV it absolutely was common for clients to cover $100,000 for the software and pay $200,000 for implementation.

As soon as you type in the whole world of the cloud, where Microsoft Business Central is $100 a month per user, things change. It’s hart to see a client they are going to spend $2000 30 days for software whilst still being pay $200,000 for implementation.

And then we did what our customers do. We set an amount we thought the marketplace would support, and that we worked backwards to manipulate our internal costs making money doing that. Our company is manufacturing companies. They need to estimate an expense, then adhere to it. They are unable to check out their customer and say “we have to~require to bill you more because i was inefficient within our production process.” They will go out of business instantly.

The newest procedure for ERP implentations.

I’m more of a producing expert when compared to a technology expert. Few manufacturing companies think with regards to projects with project managers (Engineer to Order will be the exception). They often think in terms of operations managers and standard work instructions.

I applied this thinking to ERP projects. It helps that every we all do is implement ERP for suppliers.

Here’s are the main steps that helped us dramatically slow up the risk (and expenses) of ERP projects.

We only do one kind of projectFocusing exclusively on manufacturing, and in small facilities, resulted in we’re able to refine and have better each and every project. We glance at the process as a repetitive, repetable process. This process gets rid of the up front design of the project plan etc. The project management goes away, so we reduce that waste enormously.

We offset easy but tedious work to the customerWhen a $200 each hour consultant does what depends upon a clerical task, which is waste. We train the customers can use to perform many of the tedious tasks. Evidently these are also much better done by the customer. Business Central produces a lot of this easier since it has great tools for customers to complete tasks that was once hard. There are two of these in particular that are key: Reports files Loading

We train people to edit formsCustomers understand what they need their invoice to appear like. They know where they really want the deadline on his or her PO. It’s way easier if we help them learn to alter these items than do it for the kids.

We train visitors to load data in to the systemData loading is really a task we assign to some co-op student soon after hours training. The reality is, when customers “get” how this can be done – they are doing a far better job cleaning their data and things go much smoother!

We keep training sessions shorter and VideoPeople forget what they are taught. It’s without a doubt of life. There is a lot on the plate. Also, the more time someone spends in training – the more they “zone out” and begin to shed focus. We keep services short, and record all of them as videos. People absorb increasingly can simply review what they’ve forgotten. This implies we absolutely must train remotely. Travel time is really a killer (and totally waste)- and then we can’t travel.

We keep your project tight, and discourage changeTraditional ERP partners encourage remodeling. Remodeling means extra profit. Not for people. Once we perform a Business Central project, we discourage any changes from your original project. Our projects aren’t super restrictive – nevertheless they do limit the characteristics we will implement in “Phase 1.” By keeping the master plan tight, there is lots less “creep” and the boss is normally much happier.

We still bill for customizations, but discourage them also Customizations will be the something we can not predict – so we also discourage them. With all this new model, look for customers require a lot fewer also. They trust us more to understand were doing. Occasionally a customization is only a no-brainer, plus those cases we support and even encourage them. Having said that – we now have less than 50 % the customization we accustomed to.

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