ERP Enjoy The Party, ut With Care

IDC predicts that the ERP market will be Rs 800 crore by 2006. While this is
reason enough to rejoice, get your skillsets for ERP deployment in order.
Because just one failed implementation can lose your several customers,
especially if your targets are small and medium customers.

ERP vendors are once again full of action with a lot of sales leads in their
bags. The focus is more on the Small and Medium Enterprises (SMEs). If you
happen to be a small and medium solutions provider, you have double the
responsibility of avoiding a faulty implementation. A failed implementation is
the worst thing one can afford to have as a solutions provider in the ERP
business. Avoid it at any cost.

Large enterprises have better budgets and are capable of absorbing cost
escalations. Not so with the SMEs. Then again, there may be a lack of tech-savvy
culture at many SMEs.

THE BLAME GAME

As a solutions provider, one must be technically and functionally capable of
hand-holding the customer through all the ups and downs during the entire period
of an ERP implementation. There is no point getting into the blame-game after a
failed implementation, because a prospective customer is more likely to believe
the other customer's side of the story than what you may have to say about it.

A case in point here is that of a solutions provider who failed to realize
this and has a lot of negative publicity generated through a faulty
implementation. Let´s call the vendor ERP-Ex and the customer Y-Store, both
falling under the SME category. The customer had a growing need for an ERP
solution as its business grew into an all-India chain of stores and even
multiple locations in each city. The ERP would immensely improve the national
operations and boost the customer loyalty program by providing instant access to
the central database from any location.

More than a year after the ERP went live, things are in a sorry state and the
customer is seriously thinking of switching over to another ERP solution, which
has been successfully implemented by another national chain of stores. The
customer is obviously overlooking the fact that a faulty implementation of one
ERP solution can be as bad as a faulty implementation of another ERP solution!

WHERE THE FAULT LIES

An important point to be remembered by the customer as well as the vendor is
that IT is a powerful tool for intelligent application, not an intelligent tool
that can work for you just because you have it. It will only be as powerful and
intelligent as you can make it.

Seeds of a faulty implementation can be mostly found in the system study. It
is the responsibility of both, the customer and the solution provider, to fully
understand the business processes involved.

Let us take a very simple process from the Y-Store case study to illustrate
the point. It is simplified here for better understanding; the real problem is
more complex. In the system study at the Y-Store chain, the possibility that a
customer can make a purchase at more than one location on the same day was
completely ignored, however rare that possibility may be.

Add to this the fact that the system is not 'Always-Online' (mainly due
to the cost cutting at the wrong place) and you have a messy operation. Further,
there were some loopholes in the way the central database was updated. The
billing details were stored in one table and the customer profile and his
loyalty points were stored in a different table. For reasons known only to the
functional consultants involved, the customer's loyalty points were calculated
and updated only at the local store level.

The data from locations was captured into the central database only once
everyday. So, if a customer makes two purchases on the same day at two different
locations, the billing details get captured and added up from two locations
because the bill numbers are all unique, but the loyalty points get overwritten
by only one location whichever is accessed later as the customer ID is same for
that customer at both the locations!

As a loyal customer, the only benefit I get from the Y-Store is the
redeemable loyalty points. If I make a purchase at two locations on the same
day, I lose my loyalty points from one of the locations. When I complain to the
store manager about this loss of points, he or she tells me that the current ERP
system ERP-Ex is really bad and that they are thinking of switching over to
another ERP system ERP-Zed. I am assured that I will not face such a problem
then!

USER TRAINING IMPERATIVE

Pre-sales customer education and after-sales user training is very important
for an ERP solutions provider. It's not a one-time product sale. Look at it as
a continuing relationship and responsibility.

If you are taking an AMC from your customer, don't look at it as easy
recurring income. Put in real hard work to earn your AMC fees. Your reputation
is at stake here.

A failed ERP implementation can ruin your reputation faster than a successful
one can get you new business. Sometimes it may even be a wiser decision to give
up on an order rather than getting involved in a sure failure. It can be a
nightmare that will haunt you for years to come. 

Ashok Dongre is an independent
consultant

DEVISING YOUR CLIENT'S ERP STRATEGY