November 8, 1998
Some Tips on Avoiding the Pain
By CLAUDIA H. DEUTSCH
he pitfalls of installing enterprise resource planning programs -- software packages that coordinate a manufacturer's entire operation -- are legion. Technology and operations workers may find themselves working at cross-purposes, for example, or management may fail to set or enforce deadlines. Or maybe the company is biting off more sweeping changes than it can chew.
Vendors, consultants and rueful been-there, done-that customers say the companies that avoid the worst headaches have these characteristics in common.
The project has a high-level sponsor. "Middle management makes the system work, but middle management takes its clues heavily from senior management," said David Alschuler, a vice president of the Aberdeen Group, a market research firm in Boston that has studied ERP installations.
The goals are specific and manageable. For example, a program can be set up to allocate inventory efficiently -- to large customers first, to high-priority countries first, or to fill orders as they come in. But it can't do all three at once.
Business changes are made before the software is configured. If the company is about to start selling over the Internet, for example, the new sales system is put in place before locking in the way the E.R.P. software will handle sales and distribution.
End-users are on the project team. The system has to do what operations managers need, not what technologists think they need. "The I.T. department may be facilitating this, but it is the operations people who will really drive it," said D. Michael Travis, head of Arthur Andersen's ERP consulting practice.
The team is sequestered. Freed from regular duties, team members work in a separate project room where they can kick around ideas without distractions from regular bosses and colleagues.
The team can make final decisions, but on short deadlines. "A wrong decision is better than no decision, because at least something is getting done," said Werner Dilzer of SAP, the German software giant.
Implementation is gradual. Madness lies in trying to roll out a system simultaneously to every plant in 20 countries.Taken one country or business unit at a time, it becomes manageable.
Ample time is spent on training. An administrative assistant who enters a purchase order once a month might need only a day's lesson; a person responsible for the checking and recording of inventory probably needs at least a week.
Old security blankets are discarded. Companies may be tempted, for example, to force the system to keep generating paper reports just because the staff is used to them. Inevitably, though, people will make changes on paper and forget to enter the changed data in the system. Better to scrap the paper reports entirely.
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