Spend smart on Oracle ERP implementations

Mark Fontecchio

Here are a couple of words that can speed up an IT manager’s heartbeat: ERP upgrade.

Mark FontecchioMark Fontecchio

Two truisms about most enterprise resource planning (ERP) projects exist: They cost a lot, usually more than expected; and they take a long time, usually longer than expected. In addition, IT managers that set forth a plan to implement new ERP software or upgrade old versions often feel sandwiched -- squished from the top by company executives and boards of directors who question the purpose of the project and its bottom line, as well as from the bottom by end users who complain about the outdated software but equally worry about change.

It doesn't have to be this way.

ERP implementations take about a year and a half on average, according to Panorama Consulting Solutions, but lately there have been stories of ERP projects that lasted a fraction of the time. Amonix, for example, wrestled Oracle E-Business Suite R12 into production in a mere 10 weeks.

So is there an easier way?

It depends largely on how an ERP implementation starts. In Amonix's case, the project was championed by its chief financial officer, who is now its CEO. The company worked from the top-down, secured executive buy-in from the start, and banned software customization requests for the first six months.

"We had a million requests internally to take on different configurations," said CEO Pat McCullough. "We said 'no' to all of them."

Built-in business processes speed deployment

Last week I talked to the chief information officer of Radio Flyer, who told me about his company's 11-month deployment of Oracle J.D. Edwards EnterpriseOne. Similar to Amonix, it placed a limit on customizations. But Radio Flyer CIO Tom Cesario said the restriction had less to do with a demand from on-high and more to do with the features that ERP software now brings to the table. Cesario said that such features are the kinds of things IT departments would have to customize into the application 15 years ago.

"It used to take years to implement," he said. "A lot of it was that you were building business processes into the software. Now a lot of those business processes are already built in."

In a recent survey, Panorama found that 89% of respondents had customizations in their ERP software. So while the Amonix and Radio Flyer stories are unusual, they may still be worth taking a close look at if you're aiming for an ERP implementation that can be measured in weeks rather than months or years.

Panorama also found that only 60% of respondents said their ERP project was a success. One reason why that number seems low is the lack of a clear business case for deployment. At Amonix, the company was planning to go public and wanted a new ERP system in place before the transition. As it turned out, the company didn't go public. But the project still got done quickly, thanks in large part to the business case.

More on ERP implementations

Read some best practices for implementing J.D. Edwards in the cloud

Learn how implementation is just the first step of ERP

Discover how to buy a midsize ERP platform

"Companies that do not use a business case -- and thus do not measure actual project results against any expected benefits -- likely have a harder time defining success or failure for the company, various functional areas or even individuals," stated the Panorama report.

Just as important, according to Cesario, was limiting data migration. Radio Flyer moved its ERP from a legacy IBM AS/400 server to Windows servers, and only had to migrate two years of sales history because it already had a data warehouse that included all the information it needed.

And yet, despite these three keys to success -- executive buy-in, limiting customizations and smooth data migration -- ERP projects are actually taking longer. According to Panorama, the average implementation time two years ago was 14.3 months; now it's 17.8 months, almost 25% longer.

Panorama officials say the increase is due largely to companies tightening the purse strings. ERP implementations that should have happened years ago have been delayed, and so when they actually happen, they take longer. In addition, once the projects are underway, companies try to control costs and end up cutting corners when they shouldn't, leading to longer implementations when all is said and done.

But what's clear from the likes of Amonix and Radio Flyer is that successful ERP implementations don't necessarily mean throwing money at the problem. Spending more doesn't mean saving more; spending smart does.

Mark Fontecchio is the editor of SearchOracle.com and SearchSQLServer.com. You can reach him at mfontecchio@techtarget.com.

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