Bowling Svensson posted an update 9 months, 3 weeks ago
Traditional ERP Implementations
Traditional ERP implementations are incredibly dangerous, for the partner deploying them and also for the customer. For this reason almost nobody supplies the elusive fixed fee. The risks are simply a lot of.
The existing Dynamics NAV project costs were high because legacy methods are very pricey. The standard implementation follows many phases originally determined by Microsoft in a waterfall project framework. Waterfall project management has been proven to get higher priced compared to modern “agile” approach, that’s depending on LEAN techniques.
The approach that is used by virtually everyone since ERP ‘s been around is to bill “Time and Material.” This means that customers buy enough time spent by consultants, nomatter just how or bad they may be. This moves danger from the implentor on the customer almost entirely.
In fact you may still find massive risks for the partner with one of these waterfall projects. I’ve seen Most all cases where partners were sued or threatened when these projects go very badly.
I started thinking about the way we had to change this looking at a LinkedIn post that shared a write-up on why “Time and Material Billing is Unethical.” I was really struck with the arguments. Mcdougal asked an issue which i think summed up fantastically well:
If your restaurant charged you for the serious amounts of material that it took to cook your steak, how would you feel?
This probably sparked my first real thoughts about how to stop as being a serious amounts of material business.
ERP Costs are incredibly unpredictable
One of 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 working out methods to remove that inaccuracy.
Obviously the best way to give accurate estimates ended up being to be fixed fee. Unfortunately that traditional approach is indeed risky for the partner. Commemorate it really scary to offer a fixed fee. if you don’t still do it, you have a large amount of trouble. We’ve worked very hard to develop an approach which i think is unique.
Applying LEAN Thinking to ERP Implementations
There is a movement to make use of LEAN thinking to service activities. Normally, LEAN is around removing waste from your physical product, nonetheless it does apply to projects too.
I developed my personal variations of waste in ERP projects.
First – there is time spent from the wrong resource.
This is typically if someone else who costs too much does something somebody who pays significantly less are capable of doing, or can do it faster.
Second – you can find unnecessary steps
I’ve found such a thing happens when people perform steps to “cover their butts.” A great deal of project management falls into this. It also occurs consultants (compensated on hours billed) push unnecessary work.
Third – there are wasted tasks
Sometimes customers wish to accomplish items that we, as ERP consultants, know will not work. In a traditional implementation we have no economic motivation to stop it.
Lastly – there’s a “bleed” of knowledge
It’s usually on the customer. Typically it’s when the customer doesn’t remember their training because they don’t invest some time in the machine enough.
Why ERP Implementations Need to Change!
Once we started doing cloud based ERP implementations with Microsoft Dynamics NAV it had been common for patrons to cover $100,000 for your software and pay $200,000 because of their implementation.
When you enter in the whole world of the cloud, where Microsoft Business Central is $100 each month per user, things change. It’s hart to share with a person they’ll spend $2000 monthly for software but still pay $200,000 for implementation.
Therefore we did what our customers do. We set an amount we thought the market industry would support, so we worked backwards to manipulate our internal costs to make money doing that. Our industry is companies. They have to estimate a cost, and after that follow it. They cannot go to their customer and say “we need to bill you more because we had been inefficient in our production process.” They’d close shop overnight.
The brand new approach to ERP implentations.
I’m a greater portion of a manufacturing expert than the usual technology expert. Few manufacturing companies think when it comes to projects with project managers (Engineer to Order is the exception). They generally think regarding operations managers and standard work instructions.
I applied this thinking to ERP projects. It may help that all we all do is implement ERP for manufacturing companies.
Here’s will be the main steps that helped us dramatically reduce the risk (and charges) of ERP projects.
We just do one kind of projectFocusing exclusively on manufacturing, along with small facilities, meant we’re able to refine and have better with each and every project. We look with the process as being a repetitive, repetable process. This kind of gets reduce the at the start kind of the project plan etc. The job management disappears altogether, and we reduce that waste enormously.
We offset easy but tedious make an effort to the customerWhen a $200 hourly consultant does what comes from a clerical task, which is waste. We train the customers can use to perform some of the tedious tasks. Evidently forms of greater made by the consumer. Business Central makes a large amount of this easier as it has great tools for customers to accomplish tasks that had been hard. There are two of such particularly which are key: Reports and Data Loading
We train customers to edit formsCustomers know very well what they want their invoice to take a look like. They understand where they want the deadline day on the PO. It’s way easier if we make them learn to improve these things compared to it on their behalf.
We train people to load data to the systemData loading is often a task we assign to a co-op student right after hours training. The fact is, when customers “get” how this is done – they are doing 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’ve got a lot on the plate. Also, the more somebody spends in training – the harder they “zone out” and commence to get rid of focus. We keep exercise sessions short, and record every one of them as videos. People absorb increasingly can readily review what they’ve got forgotten. This implies we absolutely must train remotely. Travel time is really a killer (and totally waste)- and then we can’t travel.
We maintain the project tight, and discourage changeTraditional ERP partners encourage extra work. Additional work means extra profit. Not for people. Once we execute a Business Central project, we discourage any changes in the original project. Our projects aren’t super restrictive – however they do limit the options we are going to implement in “Phase 1.” By continuing to keep the blueprint tight, there is lots less “creep” and also the boss is often much happier.
We still bill for customizations, but discourage them as well Customizations are the another thing we simply cannot predict – and we all also discourage them. With all this new model, look for customers request a lot fewer also. They trust us more to know what we are doing. Occasionally a customization is simply a no-brainer, along with those cases we support as well as encourage them. Even so – we’ve not even half the customization we used to.
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