• camelflood9 posted an update 5 months, 2 weeks ago

    Traditional ERP Implementations

    Traditional ERP implementations can be extremely high-risk, for both the partner deploying them but for the customer. For this reason no one supplies the elusive fixed fee. The potential for loss are only an excessive amount of.

    The previous Dynamics NAV project costs were high because legacy methods are very pricey. The normal implementation follows a number of phases originally put down by Microsoft in a waterfall project framework. Waterfall project management has been confirmed to be costlier compared to modern “agile” approach, which can be according to LEAN techniques.

    The approach that has been used by virtually everyone since ERP ‘s been around is to bill “Time and Material.” Which means that customers purchase the time spent by consultants, nomatter just how or bad these are. This moves the chance from the implentor to the customer almost entirely.

    The reality is that you can still find massive risks for that partner with these waterfall projects. I have seen MANY cases where partners were sued or threatened when these projects go very badly.

    I began thinking of the way you had to change this after reading a LinkedIn post that shared an article on why “Time and Material Billing is Unethical.” I became really struck from the arguments. Mcdougal asked an issue i think summed it up fantastically well:

    If a restaurant charged you for the serious amounts of material it loved cook your steak, how does one feel?

    This probably sparked my first real opinion of the way to stop as being a time and material business.

    ERP Costs 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 finding out ways to remove that inaccuracy.

    Obviously the ultimate way to give accurate estimates would have been to be fixed fee. Unfortunately that traditional approach can be so dangerous for the partner. It makes it really scary to supply a fixed fee. unless you do it right, you are in a large amount of trouble. We have worked hard to develop a method that we think is exclusive.

    Applying LEAN Thinking to ERP Implementations

    There’s a movement to make use of LEAN thinking to service activities. In general, LEAN is about removing waste coming from a physical product, however it is true to projects too.

    I invented my own, personal variations of waste in ERP projects.

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

    That is typically if someone else who is too expensive does something someone that pays a smaller amount can do, or are able to do it faster.

    Second – you will find unnecessary steps

    I’ve found this happens when we perform steps to “cover their butts.” A lot of project management falls into this. Additionally, it happens when consultants (compensated on hours billed) push unnecessary work.

    Third – there are wasted tasks

    Sometimes customers need to do stuff that we, as ERP consultants, know will not work. Inside a traditional implementation we now have no economic motivation to prevent it.

    Lastly – you will find there’s “bleed” of info

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

    Why ERP Implementations Ought to Change!

    If we started doing cloud based ERP implementations with Microsoft Dynamics NAV it turned out common for customers to spend $100,000 for that software and pay $200,000 because of their implementation.

    Once you type in the world of the cloud, where Microsoft Business Central is $100 monthly per user, things change. It’s hart to tell a client they’ll spend $2000 30 days for software but still pay $200,000 for implementation.

    And then we did what our customers do. We set an amount we thought the market would support, and we worked backwards to manipulate our internal costs and make money doing that. Our customers are manufacturers. They should estimate a price, after which follow it. They can not visit their customer and say “we have to bill you more because we had arrived inefficient in our production process.” They will close shop overnight.

    The modern procedure for ERP implentations.

    I’m much more of a manufacturing expert compared to a technology expert. Few suppliers think when it comes to projects with project managers (Engineer to acquire may be the exception). Many of them think regarding operations managers and standard work instructions.

    I applied this thinking to ERP projects. It may help that most carry out is implement ERP for manufacturers.

    Here’s will be the main steps that helped us dramatically slow up the risk (and costs) of ERP projects.

    We just do one sort of projectFocusing exclusively on manufacturing, as well as in small facilities, resulted in we could refine and acquire better each and every project. We look at the process being a repetitive, repetable process. This process gets rid of the in advance kind of the work plan etc. The job management disappears altogether, and now we reduce that waste enormously.

    We offset easy but tedious try to the customerWhen a $200 by the hour consultant does what comes from a clerical task, that is waste. We train the customers can use to complete many of the tedious tasks. It turns out that kinds superior made by the consumer. Business Central produces a lots of this easier because it has great tools for end users to perform tasks that was once hard. There are 2 of the specifically which might be key: Reports and knowledge Loading

    We train people to edit formsCustomers know what they want their invoice to take a look like. They understand where they really want the due date on the PO. It can be way easier when we help them learn to improve these things than do it for the kids.

    We train visitors to load data in the systemData loading can be a task we assign to some co-op student after a few hours training. Truth be told, when customers “get” how this is done – they certainly a much better job cleaning their data and things go much smoother!

    We keep services shorter and VideoPeople forget what they are taught. It goes without saying 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 reduce focus. We keep training sessions short, and record all of them as videos. People absorb countless can certainly review what they’ve got forgotten. This means we absolutely must train remotely. Travel time is a killer (and totally waste)- and then we can’t travel.

    We keep your project tight, and discourage changeTraditional ERP partners encourage work. Extra work means extra profit. Not for people. If we do a Business Central project, we discourage any changes from your original project. Our projects aren’t super restrictive – however they do limit the options we’ll implement in “Phase 1.” By keeping the program tight, there is lots less “creep” along with the boss is normally much happier.

    We still bill for customizations, but discourage them as well Customizations include the another thing we’re not able to predict – therefore we also discourage them. With all this new model, we discover customers require a lot fewer also. They trust us more to be aware what we are doing. Occasionally a customization is simply no-brainer, as well as in those cases we support as well as encourage them. Having said that – we now have fewer than half the customization we employed to.

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