Are ERP systems still relevant solution in a global market?

When ERP systems started to emerge, 20+ years ago, it was to address a market that had little understanding of a truly global marketplace. It was never intended to address a rapidly expanding dynamic environment. It was built for expansion in a local market not universal growth, as we understand it today.

As far as these early ERP systems were concerned the world was 'flat', or at least it was smaller and easily accessable over the local phone system provider's infrastructure.

Today's global marketplace is just that, a global market where you have to meet greater expectations, be more flexible in your systems and still manage to work within the localised environment applicable to each country. This is no easy task for an organisation and it needs effective tools to support it.

Far too often we come across ERP systems that are creeking and groaning, trying to stretch it's business model to somehow reach out into a real global market when it was developed for a more simpler local environment. One size does not fit all.

Given the major investments made in developing an ERP system you would not expect organisations to throw it out and start from scratch, even if that is what is required. The shareholders and marketplace would not tolerate it. So, instead, most providers either plugged in a 'global module' to the existing system or tried to patch in quasi-global architecture and thus added additional overhead to an already top-heavy system.

At the risk of stating the obvious, neither of these approaches embraces a true global data model, and thus blocks and frustrates any attempt at an accurate worldwide view of business transactions, reporting, forecasting, and all business-as-usual operations. It would appear that you and your organisation are living in a parallel universe, whereby your vision is not being matched by your ERP system.

Shoehorn approach
I am always surprised to discover the number of CEO's and stakeholders who still believe that you can impose an ERP system on an organisation and it will somehow circumnavigate all the internal problems that it faces; the local managers, the cultural difficulties, the silo mentality, the low morale, the lack of profit margins, etc.

The dream being sold to weary executives in the form of ERP systems, is that it will provide the organisation with good business practices overnight and will not only give you back executive control but it will pour calming oil on the somewhat chaotic and troubled waters of an undefined and struggling environment.

The scenario that you can control an un-manageable situation by turbo-charging it and making it operate faster, is more than a little flawed and is the stuff of nightmares. The obvious outcome of this is that you will either shake the operation so violently that it falls apart or you will crash headlong into a metaphorical wall.

The Gambler's Dilemma
The gambler's dilemma is whether to invest more into a loss making situation in the hope of recovering your losses or the more difficult option of cutting your losses and walk away. Unfortunately, too many organisations have experienced this dilemma at first hand and many are still trying hard to either a) dis-engage themselves from their ERP system provider and walk away with some of their honour in tact or c) to continue to justify the unjustifiable, the $Mns spent on a system that hangs like an albatross around your neck.

Conclusion
ERP systems are now seen as a legacy system for a less than global marketplace and should be retired gracefully. We are looking for the next new thing, based on where we are and where we want to go. We do not need parasitic systems that simply draw energ from the organisation simply to maintain the status quo, in the way that ERP systems do.

We are in a truly world-wide marketplace and have been for the last 10+ years. We need systems that will drive and support us in this boundless and boundary-less environment. System that can embrace the global and cultural differences that we encounter as an organisation. These may be multifaceted and will certainly need to be flexible and dynamic, but at the same time they need to be an informed aid to establishing tight control and strong management.

Play the Right Person in the Right Position; No strikers in goal!

Aye! Aye! Sir! The face of Experience but not the Voice.

One of the most common mistakes that I see in organisations is that they promote or recruit great technical experts to be poor project managers and excellent sales representatives to be ineffective commercial or business managers.

I am not a big fan of the highly commercialised football business, but the strategy mentioned here is the same as taking your best goal scorer off the field and puting him in as the club manager. The skills needed to perform one job function are rarely suitable to perform the other.

Someone who is a highly accomplished technical expert in the organisation is not the same person to lead, control and focus the efforts of others.

I am not saying that this person is not capable of being re-trained into a new role but has the appropriate assessments and interviews taken place to ascertain, not only elligibility but motivation and focused commitment.

You originally hired them or trained them to perform a very specific task or fullfil a series of objectives. They have consistently delivered high quality results and have bailed the organisation out of many problems. Everyone knows that they can rely on this person.

Suddenly and after due thought, the organisation decides to implement strict project management methodologies to support the company's forecasted growth. They decide to use this chosen technical expert to lead a major implementation.

It makes sense, doesn't it? This is the person that always delivers and therefore they must be the best candidate. Unfortunately, it is not necessarily the correct criteria and so often this person quickly falls into difficulties and ends up on their face. The real victim can be the organisation and it's new found belief that project management doesn’t work for them.

At the core of this issue is not the person chosen to be the project manager, it is the organisation that put them into an untenable position. Although the chosen person is very focussed and motivated by their technnical expertise, they were not truly suitable to organise the resources and coordinate the project.

The majority of technical gurus, would prefer to get their hands on the toys and start fixing the problems themselves. They are used to working in chaotic situation and they are happy to live in that environment. Therefore, they do not always see the true value of running a well controlled project in an organised and structured way.

A second issue that I have seen is with the governance controls inside organisations. These are intended to be established to support project management in an organisation. Often these organisations are stuffed to the roof tops, with theoretical and process people that have never successfully run a project themselves.

So often, processes and policies are developed for the rest of the organisation, that are far removed from the reality of everyday projects. What is developed is something theoretically sound, state-of-the-art approved and slick but, unfortunately, it does not meet the organisation's cultural requirements. "Looks great Bob! but we can't use it!"

At this point one of two things can occur.
1) Stakeholders and senior management sponsors will continue to insist that the PMs, running the projects, use these processes and policies, or else! The risk here is that the projects will all bog down and start to fail, despite the determination of all concerned.

2) In the absence of a strong directive from above, the more experienced PMs will simply ignore the processes and policies and fall back into their own tried and tested 'ways' to run the projects. This can also spell disaster for the organisation and by association, project management methodologies.

Another common issue I have seen, is that most organisation think they can perform project management cheaply, using more junior level people. They hire people that have less than five years experience and they call them Project Managers. They tell these people to take control and drive the projects towards implementation.

Without real, hard-won, experience about how to deal with and communicate positively with senior level functional and business managers, these poor people will very quickly lose their authority. They will be stripped of their implied status and will simply become the subordinates, and compliant 'yes-sirs', to the functional and business managers involved.

The functional and business managers have now gained control of your critical projects and the project managers becomes the note-takers, expeditors and coordinators. The project is now moving in another direction and with prioritised goals that were never required or intended. Again the organisation sees project management as the failure.

To have a successful project management environment you need to hire the right people. Just as you do not hire a goalscorer to manage a team, nor should you hire a technical expert to lead your project management effort. Find a seasoned, well weathered business management professional with the right experience and commitment to lead the organisation.

In conclusion, if you want to succeed, with the development and implementation of project management within your organisation, you must not skimp or stray from the path. You must hire a seasoned project manager with the correct skills and true experience to perform their duties and sometimes that means saying 'No sir!', with all due respect.