ERP implementations are all unique. There are many factors which influence the way companies implement ERP platforms. Company culture is usually the single most influential factor. There is no ideal mix of company culture which will result in a flawless implementation. Even the most solid companies can struggle through an implementation. The real measure of success is how well a company adapts over time to the new software platform and whether the anticipated benefits of the software are ever achieved. Following are two examples of companies with very different cultures and how they dealt with ERP implementations.
Young and Flashy
Alpha was a young fast growing company in the fashion accessories business. It had hit on a very successful combination of brand names and hot new products. But, like all fashion driven businesses, the growth was meteoric; hot one season but cold the next. The trick was to keep enough new brands and products in development to replace the older ones as they fell out of fashion.
Because of its rapid growth, Alpha lagged in infrastructure development, a not uncommon situation for fast-growing companies. But, unlike more mature successful fashion companies, Alpha had a culture of disdain, from the top down, for doing the basics necessary to keep the business running smoothly. Many young inexperienced employees were hired straight out of college; given the bare minimum in training, and put into jobs with little supervision or guidance. Worse many new hires had joined the company in the hope of breaking into Marketing, so they had little interest in the infrastructure jobs they were given in customer service and operations.
Overlaying an ERP implementation on this culture created havoc and brought the company to its knees operationally on several occasions. Short-term fixes in the form of software customizations were taken as the easy way out, rather than implementing a ground up improvement in the infrastructure necessary to make business transactions routine instead of an ongoing crisis. Eventually Alpha worked its way out of the daily crisis mode but at great cost in terms of software customization, cancelled orders, customer charge backs and air freight of late product. In the long run Alpha did not achieve the benefits envisioned from the ERP implementation because its culture continued to hamper the effectiveness of the software.
Beta was a successful company in a cyclical slow growth business. Its strengths included a mature, low turnover workforce and flawless execution of existing business processes. It had a culture of dedication, hard work and belief in the “Beta” way of doing business. Adapting to change was not one of its strengths however.
Planning for the ERP implementation was textbook perfect. Key personnel were assigned to be “super” users, training was thorough, data was cleansed and the implementation steps were perfectly choreographed. Management agreed that some business processes would be changed to conform to the flow of transactions through the system; even though there was grumbling from users that that was not the “Beta” way of doing business.
The implementation went smoothly at first, but after a few weeks it was clear that something was wrong. The ERP system was generating information which was clearly wrong in several key areas. The immediate reaction of management was to blame the new software because it was difficult for them to accept that Beta might be part of the problem. After several weeks of checking and investigating it became clear that the source of the problems was users developing off-line solutions to allow them to preserve the “Beta” way of doing business rather than the new business processes that management had approved. Beta finally overcame the resistance to new business processes. The ERP platform began to function as planned. In the long run Beta achieved the benefits planned from implementing the new software platform.
The moral of these stories is that culture can cause any company to encounter difficulties in implementing an ERP platform. The real issue is whether company culture will continue to hamper the effective use of the new software, and result in return on investment in the ERP platform being less than projected.