7 Ways To Save Erp Implementation Rates And Minimize Threats

Traditional ERP Implementations

Traditional ERP implementations are really high-risk, for both the partner deploying them as well as the customer. That is why no one provides the elusive fixed fee. The risks are only excessive.

The previous Dynamics NAV project costs were high because legacy methods are expensive. The conventional implementation follows many phases originally lay out by Microsoft inside a waterfall project framework. Waterfall project management software has been confirmed being higher priced as opposed to modern "agile" approach, which is depending on LEAN techniques.

The approach that is utilised by virtually everyone since ERP 's been around is always to bill "Time and Material." Which means that customers purchase time spent by consultants, nomatter how good or bad they may be. This moves the danger through the implentor towards the customer almost entirely.

The reality is that you can still find massive risks for your partner with your waterfall projects. I've come across Most all 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 piece of writing on why "Time and Material Billing is Unethical." I was really struck by the arguments. The writer asked a matter that we think summed it fantastically well:

If a restaurant charged you for that some time and material which it popularized cook your steak, how does one feel?

This probably sparked my first real opinion of the way to stop as a some time to material business.

ERP Pricing is incredibly unpredictable

The primary videos which i uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I've spent recent years since determining ways to remove that inaccuracy.

Obviously the best way to give accurate estimates was to be fixed fee. Unfortunately that traditional approach is so high-risk for the partner. Commemorate it genuinely scary use a fixed fee. if you do not do it properly, you're in a large amount of trouble. I have worked hard to develop a strategy that we think is different.

Applying LEAN Thinking to ERP Implementations

There is a movement to utilize LEAN thinking to service activities. In general, LEAN is approximately removing waste from a physical product, nonetheless it does apply to projects too.

I invented my very own variations of waste in ERP projects.

First - there exists time spent through the wrong resource.

That is typically when someone who costs too much does something somebody that pays much less can do, or are able to do it faster.

Second - you will find unnecessary steps

I have found such things happen when we perform steps to "cover their butts." A lot of project management software falls into this. It also comes about when consultants (compensated on hours billed) push unnecessary work.

Third - there are wasted tasks

Sometimes customers need to do stuff that we, as ERP consultants, know will not work. In a traditional implementation we now have no economic motivation to avoid it.

Lastly - you will find there's "bleed" of knowledge

Normally, this is on the customer. Typically it's if the customer doesn't remember their training as they do not invest some time employed in the system enough.

Why ERP Implementations Must Change!

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

As soon as you type in the world of the cloud, where Microsoft Business Central is $100 per month per user, things change. It's hart to inform a customer 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 a price we thought the market industry would support, and now we worked backwards to manage our internal costs to make money doing that. Our company is manufacturing companies. They must estimate an amount, after which stick to it. They are unable to go to their customer and say "we should bill you more because we had been inefficient within our production process." They'd close shop instantly.

The new method of ERP implentations.

I'm more of a manufacturing expert compared to a technology expert. Few companies think with regards to projects with project managers (Engineer to buy could be the exception). They usually think regarding operations managers and standard work instructions.

I applied this thinking to ERP projects. It can help that every carry out is implement ERP for manufacturing companies.

Here's are the main steps that helped us dramatically reduce the risk (and costs) of ERP projects.

We just do one sort of projectFocusing exclusively on manufacturing, and in small facilities, resulted in we will refine and obtain better with each and every project. We look in the process like a repetitive, repetable process. This gets rid of the at the start style of the work plan etc. The project management disappears altogether, and we reduce that waste enormously.

We offset easy but tedious make an effort to the customerWhen a $200 by the hour consultant does what comes down to a clerical task, which is waste. We train the shoppers to accomplish some of the tedious tasks. Evidently forms of much better done by the consumer. Business Central constitutes a large amount of this easier because it has great tools for customers to accomplish tasks that used to be hard. There's 2 of such specifically which are key: Reports and Data Loading

We train people to edit formsCustomers understand what they want their invoice to look like. They know where they desire the deadline day on their PO. It's way easier if we teach them to change these products compared to it for the kids.

We train visitors to load data into the systemData loading is a task we assign to a co-op student right after hours training. Truth be told, when customers "get" how this is achieved - they actually do a much better job cleaning their data and things go much smoother!

We keep exercise sessions shorter and VideoPeople forget what they are taught. It goes without saying of life. You do have a lot on your plate. Also, the more time someone spends in training - greater they "zone out" and start to shed focus. We keep training sessions short, and record them all as videos. People absorb more and can certainly review what they've forgotten. What this means is we absolutely must train remotely. Travel time can be a killer (and totally waste)- therefore we can't travel.

We maintain your project tight, and discourage changeTraditional ERP partners encourage work. Extra work means extra profit. Not for all of us. When we perform Business Central project, we discourage any changes from your original project. Our projects aren't super restrictive - but they do limit the features we'll implement in "Phase 1." By maintaining the program tight, there is lots less "creep" along with the boss is normally much happier.

We still bill for customizations, but discourage them also Customizations include the a very important factor we simply cannot predict - therefore we also discourage them. Given this new model, we find customers demand 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 in many cases encourage them. Having said that - we now have fewer than half the customization we used to.

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