As we discussed in our last blog “Enterprise Resource Planning Systems( What, Why and How of ERP) , the most important thing while implementing an ERP software solution is understanding its use for the company. Panorama Consulting experts stood by this pint all throughout the conference put on recently by the Colorado-based consultancy. January Paulk, Panorama’s senior manager for business process and organizational change management clearly stated “If you define requirements well, and you can have a solid set, everything else flows easily from that. Your vendor searches flow from that [and] when you get into implementation, your future state flows from that, your test scripts flow from that. It’s really the foundation of everything.”
ERP Requirement Gathering undenyingly forms the base of the whole implementation process. This infact decides the success or failure of the very important aspect associated with the growth of a company which is data analysis and performance. However for requirement gathering, it is very important that you find a vendor who understands it and can work it out. Find a vendor that is able to properly address your business needs. Many CIO’s have stated the need of requirement gathering for any ERP Implementation project, yet company’s ignore the importance it holds and jump in directly to the implementation phase. The statistics of ERP implementation success rate in the world and the fact that ERP is the most complex, difficult and mystifying and not to neglect the fact, the most expensive application in your organization makes it necessary for you to prepare big time for the implementation.
Workshop guides so people know what to expect from the ERP requirements sessions.
ERP pain points should be expressed by the experts so that requirements can be written accordingly.
It is advisable to document any issue that is addressed during these sessions, even seemingly small ones such as dollar limits that trigger manager sign-offs.
ERP requirement is an iterative process and so must include review sessions with people involved.
Requirements should be categorised into 3 groups:
Must Have, value-add and nice to have.
This would help phase the implementation. In the initial phase, the mandatory requirements are handled first and the system could be rolled out helping the company to work having what is most required. In the second phase the addons could be introduced to optimize the processes and n the final phase the nice have features could be introduced to ease the work and improve the productivity and efficiency of processes.
"If you try and do everything too fast -- if you try and put all the optimization in, people are still learning the system [and] they're not even going to get there," Paulk said. "And then you don't ever realize those benefits."
ERP software solution is one of the most expensive business-critical software aspect for your business. The time and money at stake, and the consequences associated leaves no place for mistakes and errors. You would not want a wrongly interpreted information to waste the million dollars invested and months of hard work put in. That means preventing all kinds of ERP pitfalls by engaging in detailed planning, reviewing high-level research, getting lots of critical analysis of each option, securing a healthy dose of trust and lining up solid expertise and opinions from your most trusted advisers.
The ERP Requirements directly affects Vendor Selection. ERP Requirements guides your evaluation of each ERP vendor. Once the requirements have been gathered and prioritized, the project team is ready to send out a request for information (RFI). RFI is generally sent to 8 to 10 vendors with the key required being the unique requirements of your business. Vendor Selection comes in picture here. It as well is a critical process and requires research and proper analysis. Read our article on “ERP Vendor Selection” for a better insight.
Now that we know of the importance of ERP Requirement Gathering, lets get to the very important question which is How?
How to gather requirements for implementing ERP software solution?
Lets put this in a simpler manner, Suppose you are the customer and I am the consultant working with you to develop some software changes for your packaged software.
You can prepare a requirement list addressing the Must Have, value-add and nice to have requirements as discussed earlier. This however means that you have to specify the problems and the solutions you would want to be implemented to solve those problems. This happens in the case where you require some changes done to the existing ERP software solutions or when you want a custom built ERP solution software. This would involve less of recommendations from the vendor , infact this approach does not necessarily require the vendor to understand your business. This approach can succeed only when your company has complete information of the requirements which means requirement gathering should be carried out extensively in your business through sessions to take input from all the departments and it should be conveyed properly to the vendor. You must know exactly what you need. I as the consultant would completely rely on the specifics provided by you and recommend addons and changes, which could give even better than you have analysed. Here the process itself is iterative where you tell what you want, see the result and improve on it.
We have formulated a 5 Steps guide to a successful ERP Requirement Gathering
Devise a strategic plan
The first step is to devise a strategic objective, taking in inputs from every functional group of your organization. This would make your that your organization has a set of targets that tackles all the problems of every department. You would have to consider the role of ERP solution softwares in solving those problems. That means make a list of problems and the possibility of ERP Solution solving the problem.
for example: If you determine “improper The factory throughput” as a problem and if ERP Software could provide the solution in form of “Faster factory throughput”, put that on the list.
Consider the external requirements.
ERP unlike other softwares are not to solve only the technical issue or for a particular process. ERP is is as a hole to take care of each and every every aspect of the company which includes workarounds and problems that the customer’s face because your current ERP System is not capable of providing the solution. all the business pain points should be considered in the process.This includes the considerations and complications of ERP as well, the ROI, efficiency and perforce of ERP and its impact on processes.
Recommendations from all the functions
ERP, the acronym Enterprise resource planning system, in itself is enough to clear that ERP is an enterprise level software. It is implemented not for some particular departments or processes but for the complete organization as a whole. It makes it necessary for the organization to have experts undermining problems from every department. You would not want any department to be undervalued or ignored while gathering requirement. At the same time, you would not want a particular process dominate the requirements. Every function has its own problems and value and each of it should be addressed and ERP should be implemented keeping all that in mind to make sure that all the functions run efficiently and contribute to the success of the ERP and growth of the company.
Requirements should be categorised into groups. When you have made your list you would come across certain things that are mandatory and just cannot be pushed to any further deadline. These generally are the must have or non negotiable requirements and must be fulfilled and implemented in the first stage. In the later stage the value add features come. These requirements are not necessarily needed at a priority level but would be required to run process efficiently. Any other requirement that does not come under these two categories are considered to be low priority or “good to have” ERP requirements. It is more like an icing on the cake, and can be implemented or considered at a later stage.
It is very important to keep personal conflict out of picture while gathering ERP requirements. Also it is very much required to list down the business ERP requirements in objective terms which includes the time frames, time limits, budgets and performance expectations.These values help you map out ROI from ERP.
The whole process sounds simple. Doesn’t it? However according to panorama, most of the company’s fail to gather ERP Requirements effectively and on time which is a major cause for ERP Implementation failure at the date. You should take some time, perform extensive research, monitor the requirement, company performance and then only get our feets in the processes.If you get the requirements right, the remaining steps in the process will fall into place as you continue the journey. It is only foolish to jump in straight into implementation without a through research.
Lay the groundwork with employees and seek their input frequently to ensure ERP requirements lead to long-term success.
Leave us your comments below.