The majority of ERP projects require some level of outside consulting support from a vendor specializing in the software package. However, there are many critical junctures before and during an ERP project when using the services of an independent consulting firm is the only way to go.
Before we get too far into this topic, let us define the term independent consulting firm. “Independent” means the firm is not in any way part of, or associated with, any ERP software vendor or software-consulting company where there is a potential for a conflict of interest.
In many cases, not using independent consultants at the appropriate time can lead to slanted or biased recommendations, or just plain bad advice. This is the scenario when your consultants make suggestions that are in their own (or partners’) best interest, not yours. I am often amazed at how many organizations fall into the trap of hiring consultants or vendors that cannot be truly independent (no matter what they tell you).
While all companies are in business to make money, the hope is the consulting industry would hold itself to a higher standard because you are paying them big bucks for their expertise. As a client, you should expect nothing short of unbiased advice. Unfortunately, in many cases, independents are the only ones capable of providing a straight answer.
When the need arises, the following are seven major areas where independent consultants should always be utilized.
Business Needs Assessment
The first question is: Do You Really Need a New ERP System? Make no mistake; there are many reasons to do ERP, but within some organizations, the business issues to address are much more fundamental than software. In this case, the first goal should be to fix the business.
In order to set the right direction for business improvement, consider performing a Business Needs Assessment. This type of assessment is an analysis of business goals and objectives, and identifying the key issues associated with business strategies, organizational structures, current processes, systems, culture, or anything else that inhibits achieving the desired state.
When hiring consultants to assist in this endeavor, make sure they are an independent business-consulting firm capable of getting at the real problems. The firm should have a variety of consultants that understand various industries, processes, and technology, and the only thing they have to sell you is their expertise and advice. Alternatively, if you hire a technology firm or ERP software vendor you will get a “systems” recommendation, whether you need new systems or not.
Senior Management Education
When ERP is a go, one of the keys to success is an educated management team. This education should start before making a large financial commitment to the project. The topics include:
1) What is ERP? 2) What are the potential benefits? 3) What does it take to get there? 4) What are senior management’s responsibilities? 5) What are the lessons learned (success factors)?
This type of education has very little to do with software and nothing to do with a particular package. It should focus primarily on ERP concepts, and the project management and organizational challenges that should be anticipated during the implementation of any package.
Therefore, it is important to avoid so-called “educators” with a hidden agenda to sell software or consulting services associated with a package, or have any other reason to sugarcoat the real issues that sr. management must understand in order for the project to be successful.
ERP Readiness Assessment
Readiness assessments can come in different flavors depending on when they occur, such as before or during an ERP project. An ERP readiness assessment prior to the start of the project can help the organization prepare for the challenges that lie ahead.
While most ERP projects should not require a readiness assessment (when sr. management education is done correctly), I think of it as furthering the cause of sr. management education with specific recommendations relating to your business.
The reasons for using independent consultants in this area are similar to those mentioned previously for educating sr. management (it should have nothing to do with a particular software package).
However, in this area there is one additional word of caution when considering the services of a separate business unit from within a Big Five firm or large technology vendor. In this case, the readiness consultants may not really specialize in ERP readiness assessments, or may find it difficult to maintain independence.
For example, in a Big Five or large technology vendor the consultant performing the assessment will receive pressure from the software and consulting side of the firm to get their foot in the door.
ERP Software Selection
By now, the need for an independent perspective when evaluating and selecting software should be obvious. Nevertheless, many organizations continue to hire firms that provide implementation services for a particular package (or have partners that sell ERP software). Which package do you think they will recommend?
Project Management Once the ERP software is selected, your software-consultants will provide project management knowledge specific to the package. In addition, I always recommend that clients assign an internal manager as “the” project manager. In other words, the client should be responsible for overall project management, with the help of your software consultant PM.
At the same time, it is true that some organizations need help to fulfill their project management responsibilities, particularly in the initial project-planning phase. When help is necessary, hire a strong, independent PM to assist. It is a mistake to have your existing implementation service provider perform both the client and consulting PM roles. An independent project manager will act in the best interest of the organization, while the existing software consultants always have other loyalties.
Best Industry Practices As of last count, there are well over 70 ERP packages out there and all contain best practices (according to the vendor). However, do not count on it. As I always say, taking a blind leap of faith in this area may be the last leap you ever take.
In addition, many software consultants understand an industry practice only to the extent provided by a particular package. In many cases, this can lead to tunnel vision, forcing your current business processes into the software, and a failure to realize the full range of potential improvements
An independent business process expert that understands the more holistic aspects of an industry practice can provide additional help in educating management and redesigning business processes. Many of these best practices can be implemented with any software package.
An independent has no allegiance to the tools provided by a given package. He or she is inclined to evaluate all elements of the processes. These include changes in policies, procedures, workflows, performance measurements, responsibilities, and even software modifications (when necessary) to support the best way to run the business.
Many software-consulting firms simply do not have this level of operational knowledge or process re-engineering expertise. Even if they do have the skills somewhere in the firm, there is a good chance they have preconceived solutions of another way to force your current processes into the software the best they can.
Go-live Readiness Assessment
A go-live readiness assessment is a final validation of the project and system just prior to cutover. This analysis may include a review of the implementation steps, new process designs, documentation, system set-up, test results, conversions plans, and end-user training plans.
From a practical standpoint, if the project team and existing consultants did their jobs, there probably is no need for a formal go-live readiness assessment. But when in doubt, hire a separate software consulting firm (specializing in the package) to perform this type of readiness assessment. This is a second set of eyes to review the work previously completed.
For any type of readiness assessment, it adds little value to bring in different consultants from the same software-consulting firm already engaged with the project. No software consultant wants to make one of their follow employees look bad by uncovering all the things they failed to do or did incorrectly.
Courtesy:Steven Phillips, an ERP professional with over 27 years of implementation experience. He is the author of the book “Control Your ERP Destiny”, one of the best selling ERP titles.