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  • Oliver Golden posted an update 5 months, 3 weeks ago

    Traditional ERP Implementations

    Traditional ERP implementations can be extremely high-risk, for the partner deploying them but for the customer. This is the reason no one provides elusive fixed fee. The potential for loss are merely too much.

    The existing Dynamics NAV project costs were high because legacy methods are costly. The typical implementation follows many phases originally determined by Microsoft in a waterfall project framework. Waterfall project management software has been proven to get costlier than the modern “agile” approach, that’s determined by LEAN techniques.

    The approach that is employed by virtually everyone since ERP has been in existence is usually to bill “Time and Material.” Because of this customers spend on the time spent by consultants, nomatter just how or bad these are. This moves the risk from your implentor on the customer almost entirely.

    The reality is that there are still massive risks to the partner with your waterfall projects. I have come across Most cases where partners were sued or threatened when these projects go very badly.

    I started considering how you had to change this reading a LinkedIn post that shared a piece of writing on why “Time and Material Billing is Unethical.” I was really struck through the arguments. The article author asked a matter that I think summed it up fantastically well:

    If a restaurant charged you for your time and material who’s loved cook your steak, how does one feel?

    This probably sparked my first real thoughts about how to stop being a time and material business.

    ERP Prices are incredibly unpredictable

    Among the first videos which i uploaded to YouTube was my explanation of why traditional costing of ERP implementations was outrageously inaccurate. I’ve spent many years since figuring out solutions to remove that inaccuracy.

    Obviously the easiest method to give accurate estimates ended up being be fixed fee. The thing is that traditional approach is indeed high risk for your partner. It can make it truly scary use a fixed fee. if you don’t do it right, you are in a lots of trouble. We have worked very hard to develop a method which i think differs from the others.

    Applying LEAN Thinking to ERP Implementations

    You will find there’s movement to apply LEAN thinking to service activities. Generally speaking, LEAN is approximately removing waste from the physical product, however it is true to projects too.

    I created my very own variations of waste in ERP projects.

    First – there is certainly time spent with the wrong resource.

    This really is typically if somebody who is too expensive does something somebody that is paid a lot less can do, or are capable of doing it faster.

    Second – you can find unnecessary steps

    I find this occurs when we perform steps to “cover their butts.” A great deal of project management software falls into this. Additionally, it happens when consultants (compensated on hours billed) push unnecessary work.

    Third – you’ll find wasted tasks

    Sometimes customers want to do issues that we, as ERP consultants, know will not work. In the traditional implementation we’ve got no economic motivation to avoid it.

    Lastly – there’s a “bleed” of data

    This is usually around the customer. Typically it’s when the customer doesn’t remember their training they do not spend some time working in the system enough.

    Why ERP Implementations Ought to Change!

    When we started doing cloud based ERP implementations with Microsoft Dynamics NAV it was common for purchasers to pay $100,000 for the software and pay $200,000 for their implementation.

    As soon as you enter in the whole world of the cloud, where Microsoft Business Central is $100 per month per user, things change. It’s hart to see an individual they are going to spend $2000 per month for software and still pay $200,000 for implementation.

    Therefore we did what our customers do. We set an amount we thought the market would support, and now we worked backwards to control our internal costs and make money doing that. Our clients are manufacturing companies. They must estimate an amount, and then follow it. They can’t visit their customer and say “we have to bill you more because i was inefficient in our production process.” They will close shop over night.

    The new approach to ERP implentations.

    I’m more of a manufacturing expert than a technology expert. Few suppliers think with regards to projects with project managers (Engineer to acquire will be the exception). They usually think with regards to operations managers and standard work instructions.

    I applied this thinking to ERP projects. It helps that we do is implement ERP for manufacturing companies.

    Here’s are the main steps that helped us dramatically decrease the risk (and costs) of ERP projects.

    We only do one form of projectFocusing exclusively on manufacturing, along with small facilities, meant that we could refine and have better with each and every project. We glance at the process as being a repetitive, repetable process. This kind of gets reduce the at the start form of the project plan etc. The work management goes away completely, so we reduce that waste enormously.

    We offset easy but tedious attempt to the customerWhen a $200 hourly consultant does what amounts to a clerical task, which is waste. We train the shoppers to complete some of the tedious tasks. Apparently , sorts superior made by the client. Business Central produces a lots of this easier given it has great tools for customers to accomplish tasks that used to be hard. There’s 2 of these especially which can be key: Reports information Loading

    We train visitors to edit formsCustomers know very well what they really want their invoice to look like. They do know where they really want the due date on their own PO. It really is way easier when we teach them to improve these products compared to it for the children.

    We train people to load data into the systemData loading is often a task we assign to a co-op student right after hours training. Truth be told, when customers “get” how this is done – they are doing a much better job cleaning their data and things go much smoother!

    We keep services shorter and VideoPeople forget what they are taught. Without question of life. You’ve got a lot on your own plate. Also, the more time an individual spends in training – the more they “zone out” and initiate to lose focus. We keep services short, and record every one of them as videos. People absorb more and can simply review what they’ve got forgotten. This implies we absolutely must train remotely. Travel time is a killer (and totally waste)- and we all can’t travel.

    We keep your project tight, and discourage changeTraditional ERP partners encourage additional work. Work means extra profit. Not for all of us. If we execute a Business Central project, we discourage any changes through the original project. Our projects aren’t super restrictive – nonetheless they do limit the features we will implement in “Phase 1.” By maintaining the master plan tight, there is a lot less “creep” and the boss is often much happier.

    We still bill for customizations, but discourage them as well Customizations include the a very important factor we simply cannot predict – so we also discourage them. With all this new model, find customers demand a lot fewer also. They trust us more to be aware what were doing. Occasionally a customization is simply a no-brainer, as well as in those cases we support and even encourage them. Even so – we have fewer than half the customization we accustomed to.

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