Traditional ERP Implementations

Traditional ERP implementations can be extremely high-risk, for both the partner deploying them and also for the customer. That is why almost nobody supplies the elusive fixed fee. The hazards are only excessive.
That old Dynamics NAV project costs were high because legacy methods can be very expensive. The conventional implementation follows numerous phases originally determined by Microsoft in the waterfall project framework. Waterfall project management has been confirmed to get more costly compared to modern "agile" approach, that's based on LEAN techniques.
The approach that has been used by virtually everyone since ERP has existed is to bill "Time and Material." This means that customers spend on some time spent by consultants, nomatter just how or bad they are. This moves danger from your implentor to the customer almost entirely.
In fact there are still massive risks for that 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 you had to change this seeing a LinkedIn post that shared a write-up on why "Time and Material Billing is Unethical." I had been really struck through the arguments. The article author asked a matter i think summed it up fantastically well:
If a restaurant charged you for the time and material that it took to cook your steak, would you feel?
This probably sparked my first real opinion of easy methods to stop as a some time to material business.
ERP Pricing is incredibly unpredictable
The primary 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 determining methods to remove that inaccuracy.
Obviously the ultimate way to give accurate estimates would have been to be fixed fee. The thing is that traditional approach can be so risky for the partner. Commemorate it genuinely scary use a fixed fee. if you do not do it right, you are in a lots of trouble. We have worked very difficult to develop a strategy that I think is unique.
Applying LEAN Thinking to ERP Implementations
You will find there's movement to use LEAN thinking to service activities. Normally, LEAN is around removing waste coming from a physical product, nevertheless it is true to projects too.
I invented my very own variations of waste in ERP projects.
First - there is certainly time spent through the wrong resource.
This can be typically if somebody who is too expensive does something which someone that pays much less are capable of doing, or are able to do it faster.
Second - you can find unnecessary steps
I have discovered this occurs when individuals perform steps to "cover their butts." Lots of project management software falls into this. In addition, it happens when consultants (compensated on hours billed) push unnecessary work.
Third - you can find wasted tasks
Sometimes customers need to do stuff that we, as ERP consultants, know won't work. Within a traditional implementation we have no economic motivation to stop it.
Lastly - you will find there's "bleed" of data
This is usually about the customer. Typically it's once the customer doesn't remember their training they do not invest some time in the machine enough.

Why ERP Implementations Have to Change!
Once we started doing cloud based ERP implementations with Microsoft Dynamics NAV it had been common for customers to spend $100,000 for the software and pay $200,000 for their implementation.
After you go into the realm of the cloud, where Microsoft Business Central is $100 a month per user, things change. It's hart to tell a client they're going to spend $2000 30 days for software whilst still being pay $200,000 for implementation.
And we all did what our customers do. We set a cost we thought the marketplace would support, and we worked backwards to manipulate our internal costs and earn money doing that. Our clients are suppliers. They should estimate an expense, after which stay with it. They can't check out their customer and say "we need to bill you more because we were inefficient in our production process." They will go out of business instantly.
The brand new approach to ERP implentations.
I'm really a producing expert than the usual technology expert. Few manufacturers think when it comes to projects with project managers (Engineer to acquire is the exception). They generally think regarding operations managers and standard work instructions.
I applied this thinking to ERP projects. It will help that most perform is implement ERP for manufacturing companies.
Here's are the main steps that helped us dramatically lessen the risk (and costs) of ERP projects.
We merely do one type of projectFocusing exclusively on manufacturing, and in small facilities, resulted in we're able to refine and obtain better with each and every project. We glance on the process like a repetitive, repetable process. This process gets reduce the up front form of the work plan etc. The work management disappears, and that we reduce that waste enormously.
We offset easy but tedious make an effort to the customerWhen a $200 hourly consultant does what depends upon a clerical task, that is waste. We train the shoppers to accomplish many of the tedious tasks. It turns out that sorts much better produced by the client. Business Central is really a lots of this easier given it has great tools for users to complete tasks that had been hard. There are 2 of the specifically that are key: Reports and knowledge Loading
We train people to edit formsCustomers know what they want their invoice to appear like. They know where they need the due date on their PO. It is way easier when we help them learn to alter these products than do it on their behalf.
We train visitors to load data in to the systemData loading can be a task we assign to some co-op student right after hours training. The reality is, when customers "get" how this is done - they are doing a far better job cleaning their data and things go much smoother!
We keep workout sessions shorter and VideoPeople forget what they are taught. It goes without saying of life. You've got a lot in your plate. Also, the more an individual spends in training - the more they "zone out" and commence to get rid of focus. We keep workout sessions short, and record all of them as videos. People absorb many can certainly review what they've got forgotten. This implies we absolutely must train remotely. Travel time can be a killer (and totally waste)- so we can't travel.
We maintain the project tight, and discourage changeTraditional ERP partners encourage extra work. Work means extra profit. Not for people. If we perform Business Central project, we discourage any changes through the original project. Our projects aren't super restrictive - but they do limit the functions we'll implement in "Phase 1." By keeping the program tight, it is a lot less "creep" and also the boss is normally much happier.
We still bill for customizations, but discourage them also Customizations include the one thing we can't predict - and then we also discourage them. With all this new model, look for customers require a lot fewer also. They trust us more to be aware what we have been doing. Occasionally a customization is only a no-brainer, plus those cases we support as well as encourage them. However - we have less than half the customization we utilized to.
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