• Moss Francis posted an update 7 months, 1 week ago

    Traditional ERP Implementations

    Traditional ERP implementations are incredibly risky, for both the partner deploying them as well as the customer. For this reason no one offers the elusive fixed fee. The hazards are simply too much.

    The old Dynamics NAV project costs were high because legacy methods are very pricey. The conventional implementation follows several phases originally put down by Microsoft in a waterfall project framework. Waterfall project management has been proven to get higher priced compared to modern “agile” approach, that is based on LEAN techniques.

    The approach that is utilized by virtually everyone since ERP has existed is always to bill “Time and Material.” Which means customers spend on some time spent by consultants, nomatter just how or bad these are. This moves the chance from the implentor for the customer almost entirely.

    In fact it is possible to massive risks to the partner with these waterfall projects. I have seen Most cases where partners were sued or threatened when these projects go very badly.

    I began considering the way you had to change this reading a LinkedIn post that shared a write-up on why “Time and Material Billing is Unethical.” I used to be really struck by the arguments. Mcdougal asked an issue that I think summed up fantastically well:

    If a restaurant charged you to the some time to material which it popularized cook your steak, how do you feel?

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

    ERP Costs are 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 recent years since figuring out solutions to remove that inaccuracy.

    Obviously the best way to give accurate estimates would have been to be fixed fee. The thing is that traditional approach is really high-risk for the partner. Celebrate it scary to offer a fixed fee. if you do not do it right, you’re in a lots of trouble. We have worked very hard to develop an approach that we think is exclusive.

    Applying LEAN Thinking to ERP Implementations

    There exists a movement to utilize LEAN thinking to service activities. Generally speaking, LEAN is all about removing waste coming from a physical product, nonetheless it does apply to projects too.

    I created my own, personal variations of waste in ERP projects.

    First – there is time spent through the wrong resource.

    This can be typically when someone who is too expensive does something someone who pays a smaller amount can perform, or are capable of doing it faster.

    Second – you can find unnecessary steps

    I’ve found such things happen when folks perform steps to “cover their butts.” Plenty of project management software falls into this. Additionally, it happens when consultants (compensated on hours billed) push unnecessary work.

    Third – you can find wasted tasks

    Sometimes customers might like to do things that we, as ERP consultants, know will not work. In the traditional implementation we have no economic motivation to halt it.

    Lastly – there’s a “bleed” of info

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

    Why ERP Implementations Need to Change!

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

    As soon as you enter the world of the cloud, where Microsoft Business Central is $100 monthly per user, things change. It’s hart to tell a customer they’re going to spend $2000 a month for software but still pay $200,000 for implementation.

    And we all did what our customers do. We set a cost we thought the market industry would support, so we worked backwards to manipulate our internal costs and make money doing that. Our customers are manufacturing companies. They must estimate a cost, then stay with it. They can’t check out their customer and say “we have to bill you more because we had been inefficient inside our production process.” They’d close shop instantly.

    The new method of ERP implentations.

    I’m much more of a producing expert than a technology expert. Few companies think in terms of projects with project managers (Engineer to Order may be the exception). They usually think in terms of operations managers and standard work instructions.

    I applied this thinking to ERP projects. It may help that all we do is implement ERP for companies.

    Here’s will be the main steps that helped us dramatically reduce the risk (and expenses) of ERP projects.

    We merely do one sort of projectFocusing exclusively on manufacturing, as well as in small facilities, meant we will refine and get better each and every project. We glance with the process being a repetitive, repetable process. This kind of gets reduce the at the start form of the project plan etc. The job management goes away completely, and that we reduce that waste enormously.

    We offset easy but tedious try to the customerWhen a $200 each hour consultant does what comes from a clerical task, that is waste. We train the shoppers to do many of the tedious tasks. Apparently , forms of greater done by the customer. Business Central produces a large amount of this easier because it has great tools for end users to perform tasks that had been hard. There are two of these especially which are key: Reports information Loading

    We train people to edit formsCustomers determine what they need their invoice to appear like. They know where they desire the deadline on the PO. It can be way easier when we teach them to improve these items compared to it for the kids.

    We train customers to load data in to the systemData loading is often a task we assign into a co-op student soon after hours training. The reality is, when customers “get” how this is achieved – they do a much better job cleaning their data and things go much smoother!

    We keep training sessions shorter and VideoPeople forget what they are taught. It goes without saying of life. You’ve got a lot on your plate. Also, the more a person spends in training – the harder they “zone out” and commence to get rid of focus. We keep exercise sessions short, and record all of them as videos. People absorb increasingly can readily review what they’ve forgotten. This means we absolutely must train remotely. Travel time can be a killer (and totally waste)- so we can’t travel.

    We keep your project tight, and discourage changeTraditional ERP partners encourage extra work. Remodeling means extra profit. Not for people. When we perform Business Central project, we discourage any changes from your original project. Our projects aren’t super restrictive – however they do limit the functions we’re going to implement in “Phase 1.” By keeping the master plan tight, there is a lot less “creep” as well as the boss is usually much happier.

    We still bill for customizations, but discourage them as well Customizations include the one thing we can’t predict – and we all also discourage them. Given this new model, we find customers require a lot fewer also. They trust us more to be aware what we are doing. Occasionally a customization is just a no-brainer, along with those cases we support and in many cases encourage them. Nevertheless – we’ve fewer than half the customization we utilized to.

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