For most IT executives, the term ERP (Enterprise Resource Planning) is often a four-letter word, but it doesn’t have to be.
I’ve had the good fortune of leading several major system transformations in my 20+ years in the industry, most recently at EMC. And while replacing EMC’s legacy systems with a standardized SAP-based one was challenging, there are strategies I’d like to share that can help the process go smoothly.
At EMC, we were faced with an aging ERP infrastructure that was limiting our ability to scale and support a dynamic business model. More than 10 years old and customized so extensively, it could no longer be upgraded. This resulted in a significant increase in total cost of ownership and a high level of risk to our growing business.
We were determined to take a radically different approach with our new ERP program, code named PROPEL. As such, we worked with EMC senior management and a number of key business leaders to define critical guiding principles at the outset. They included:
- No customizations
- Use an agile and “go fast” approach
- Adopt industry standard practices and adapt business processes
- Build a foundation for future growth and scalability
- Make it a business-led program with strong governance
As a business-led project, PROPEL had to be staffed by talented, senior business people from the major process function areas—Manufacturing, Finance, Engineering, Procurement and Supply Chain. These people, combined with the IT team, formed the core PROPEL team.
From a technology perspective, we chose the industry-leading SAP ERP package, and leveraged EMC technology to ensure a high-performing, scalable and efficient system. As a result, we are now the largest SAP instance that is 100 percent virtualized on VCE Vblock technology.
A critical success factor for ensuring we adhered to our guiding principles was establishing a strong program governance model. This model served as a review board for all enhancement or customization requests and also was key to our change management and communications efforts.
In addition, we had more than 500 “super users” from the PROPEL team’s respective business units who acted as extended project team members and helped drive implementation of the system and new business processes.
We had all the pieces in place—the right people, the right governance, the right processes, the right approach and the right technology. The communication, governance and the level of rigor were critical.
This winning combination allowed us to meet our go-live target and budget. We have successfully closed multiple quarters, handling record volumes on the new system with minimal issues.
In addition, by leveraging EMC and VCE technology, we have a high performing, scalable and highly available infrastructure, all while saving more than $10 million.
Some of the lessons we learned along the way that are important for those who wish to embark on their own ERP implementation include:
- Executive support is critical to success.
- Identify and assign the right resources from the business. These projects need to be business–led to be effective.
- Spend time cleaning up your critical data such as customer, product and material records. Clean it as early as possible—before and during the project. And then put a master data management governance process in place to make sure it stays clean.
- Don’t underestimate the level of business change required to implement a new ERP system, especially if you want to minimize enhancements and customizations.
- As you make changes and transform processes, know when what you’ve achieved is good enough. In some cases, perfect is the enemy of good, which is sometimes a tough realization for people.
- Establish key metrics up front and ensure they are tracked post implementation.
Although ERP projects, like any large transformational program, are often incredibly challenging, we’ve proven that with the right principles, technology and approach you can truly be successful. And ERP no longer has to be a four-letter word.