We all know India is unique in its cultural aspect. This uniqueness has its own advantages and disadvantages. While we should keep our uniqueness intact, it is also equally important to remove the huddles making it relevant for the times in order to achieve growth and progress. (My knowledge is only limited to the Indian market)
“Insanity is doing the same thing over and over and expecting different results.” – Albert Einstine
I always admire this parable. As Enistine said, If we do not change the way we do things, it is impossible to get different results.
These observations are from my personal experience with many ERP implementation projects.
Honestly, my idea is not to criticise or be sarcastic. But wish to be critical of the subtle patterns of organisational behavior during ERP selection, Implementation, and post-implementation stage. I am sure this article will help to avoid failures and overcome crippled implementations.
Why do we need expensive software?
The best Indian Mangos are available only in US and UK. Because they know the taste and are willing to pay the price for it. So the same for the best-of-the-breed software companies and brains work for US and UK.
I have seen many of the 2nd & 3rd generation entrepreneurs still not in a position to convince their 1st generation promoters for upgrading their IT systems, which are a combination of manual registers and offline entry into an IT system. These systems do not cover entire business functionality and hence have too much people dependency. This offline data entry makes the decision-making and customer response & support complex. As a result, the team struggles for growth and handles day-to-day firefighting.
One of the main reasons for the next generation not stepping into the family Manufacturing business is the lack of transparent systems for accessing real-time data.
Most companies while shopping for the ERP system does not have any budgets or timelines for finalisations. Even if they shortlist the system, they will start their negotiation, comparing the ERP system prices with Accounting software. So as a software vendor, we are careful about committing our pre-sales expenses with such companies.
Ill advised solution selections:
My father use to tell me a joke. There were 2 sons. The 2nd son had only 2 choices about his marriage. Either I marry the 1st brother’s wife or will take Sanyas and go to the Himalayas. So funny, right? 😊
The same happens here too. They either stay with:
- accounting software + multiple XL sheets / age-old software (or)
- Buy a popular CRM application and spend many months of effort in customising it as a manufacturing ERP system which will never happen (or)
- go for a Global brand, by spending a bomb for huge customisation, and large configuration.
Whereas, their internal teams are not even ready. So the ERP project suffers a lack of skill upgradation, change management, and cultural change for adoption. As a result of such a huge gap, the entire project fails big time. Now they will squarely blame the new IT system.
In case of 2 & 3, all investments will go down the drains for sure.
People are personal & emotional in the office and professional at home! (Data lovers)
This is very funny. In most companies we find that senior management people are more personal and emotional in the works and behave like Senior managers and vice presidents with their spouses and kids.
As a result, they develop a love for their data and won’t part with anyone even if their job is at stake. They won’t take holidays. It is mistaken as loyalty. In case of their absence, the company comes to a grinding halt.
Without the presence of full end-to-end integrated software in place, scalability is out of the question.
We have seen many public sector banks go on strike when the computerisation was introduced 30 – 40 years ago, saying they will lose their job without any vision that the banks can open 40,000 more branches instead of the present 35 branches.
In my personal experience of ERP implementation, unfortunately, the companies had to let go of their most trusted employees to bring the ERP in. Like the bank employees, they won’t protest openly. But they won’t cooperate and continue to delay the implementation with some pretext or other. Sadly, the top management will be silent struggling between digital growth and pseudo-loyalty.
Poor project management – Some chaos is okay.
The pleasing process does not yield pleasing results!
I have seen the presence of the right Project manager in a German compressor company ERP implementation, who made the difference.
But most Indian companies believe that the CEO or MD can just give instructions now & then and people will follow it. This never ever works. ERP and Digital transformation needs close followup of documenting the scope of work, responsibility of activities, who will do and by when it will be done, more importantly, the quality of data on a Weekly, Daily, and at some point in time, even hourly follow-ups and reviews. Many organisations will take this lightly and get into the troubled ERP implementation phase.
The only alternative is to have a well-experienced Project Manager. But if transformation must happen, then the full organisation has to change itself to align the technology. But if the project manager questions the people to fall in line, the top management team feels threatened that they never have pushed their team so far. I heard in one of Eric Kimberling’s events, a speaker was saying, some chaos is okay during the ERP project implementation.
Still expecting physical presence for ERP delivery & support
Manufacturing industries do everything physically. So they also expect IT systems also to be done the same way. Post COVID, many IT companies have discovered cost-effective, efficient, software delivery, implementation, and support methods for their customers globally.
So in this present Internet age, a software vendor close to your office has no practical relevance. Also the ERP systems have evolved so much and all of us have so much app usage experience in mobiles, that most of it are Do It Yourself (DIY). So when it comes to ERPs, it is very easy for the team to get the training and support online. Assuming the software vendor is in your city. Considering the local traffic conditions, online support will be much faster. This is also part of the upgradation and change in mindset.
Lack of Checks & balances and internal audit
Old habits die hard. Depending on the organisational culture, it may take 2 -4 years for the companies for the new ERP system to get into their DNA.
Information technology culture is not just investing in technology and people using the system here and there for operational reasons. It has to get into every critical corner of the business effectively.
Post the successful ERP implementation & go live, people, in general, will tend to think the game is over. It is not. Some companies even will throw a party to celebrate. But it is extremely important for companies to continue to monitor:
- Master Data management (MDM) is the most important
- Inventory balances (difference between physical and books). Internal audit is a must.
- Sales and Financial reports.
- Statutory reports
- Cost control reports
- Training and orienting new employees onto the ERP system
Most companies, even after successful ERP implementation, after 3 to 4 years goes back to their old system as the users (Data lovers) with wrong data, successfully create frustration across all levels and happily go back to their old software.
Conclusion:
Look at the massive GST, IT, and Digital currency rolled out by Govt. of India successfully. It was not easy. We have seen several problems and glitches. We also have seen many political clashes across states and center. But we cannot afford to go back. Unfortunately, Malaysia had rolled back its GST implementation, in spite of its size being much smaller with a much higher rate of literacy when compared to India.
In the same way, the Implementation of ERP is a huge part of Digital Transformation for the enterprise. If anyone thinks by just spending money the ERP will work, surely, they are daydreaming. It is very similar to a health program. We pay money as well as show up at the GYM at 6.30 AM daily. We can’t delegate.
Organisations need to develop a strong will and supportive team to enable this transformation. Other wise this will not happen even after selecting the right system.
Also, the management of the enterprises needs to develop a mechanism of checks and balances to ensure the IT system is properly implemented till it goes into the DNA of the enterprise.
