A change in an ERP management system seems, on paper, like a technical project: choosing a product, installing it, training staff. In practice, the real challenge for the project leader is people.
Three players, three different expectations
In an ERP project, there are at least three stakeholders whose objectives are not always clearly stated or coincidental.
The entrepreneur or CEO who has decided to make the investment, taking on board the Administrative Director's arguments, expects improved management, and when an unexpected event occurs, the instinctive reaction is, “How could you not have foreseen this?”
Users are the key people in the project, but their support must be won due to the natural aversion to change that affects established habits. The new system requires additional training and often involves consolidating tasks previously distributed across different departments—a workload that, for those affected, is perceived as a disadvantage to the benefit of others.
Finally, the supplier plays a strategic role because, in addition to installing the product, they must work with the project manager to find solutions that will deliver future results. Some manage this relationship collaboratively, while others prefer a more formal approach, with a detailed contract, drafts of project progress exchanged before the final version, and signed test reports. Neither approach is absolutely right or wrong, but formalism has a certain cost with few concrete benefits, while collaboration helps prevent unexpected events—and resolve them quickly when they do occur.
The unexpected is part of the project
A well-executed ERP project isn't one without surprises, but one in which the project manager knows how to transform the unexpected into opportunities. This is a skill beyond simply documenting tasks and deadlines: it's the willingness to manage the unpredictable.
A Practical Example: From an Emergency to an Integrated ERP
A concrete example. Years ago, IBM decided to abandon a solid and well-regarded product like ACG, which we had been using successfully for many years. This market decision by our longtime supplier prompted me to replace the management system with an ERP that would allow us to integrate the various applications in use, such as MRP, management control, and reporting, that were operating separately. The need to replace a single application became an opportunity to improve management efficiency and review all processes in an integrated manner, as well as update a procedure that had become obsolete over the years.
The Results: Qualitative Objectives and a Measurable ROI
The project had important but difficult-to-measure qualitative objectives, such as process simplification, improved workplace climate, and staff professional growth. There was also a specific quantitative objective, chosen from a significant cost item: distribution logistics.
The ERP's technical specifications allowed for more information thanks to the much richer product database (costs, weight, volume, warehouse location), which, when used appropriately, allowed for optimized transportation for deliveries to a customer category.
The expected savings were approximately €100,000 per year, which then grew along with revenue. Dividing this amount by the net project cost of €390,000, the payback period was reduced to just 3.7 years.
Having this quantitative objective allowed me to offset an unexpected aspect, such as the increased time required to modify the cost center structure, which still referred to the old production model that no longer adhered to reality. That ERP, updated over the years, is still in use: the best proof that the project worked.
This is one of the pieces of the Rubik's Cube dedicated to the Information System. Technology is important, but how you engage people makes the difference between a project that simply provides users with a new tool and one that gives everyone involved the opportunity to be an active part of the change.
In the next Rubik's Cube piece, we'll look at how to choose the right ERP product and supplier for an SME. In the meantime, tell us: in your latest IT project, what was the most difficult obstacle to manage—technical or human?
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