The Lake of Unclear Benefits

lake of unclear benefits

Source: harrypotter.wikia.com

So the decision comes down, your company is moving forward with new ERP. Congratulations on your decision; just remember, a year or so from now, that ERP implementations are potentially the next great, bloody spectator sport. They are not for the weak or those lacking determination. Decision made, presumably based upon a business case that documented the expected benefits and how you are going to get there. If so, continue. If not, then you’d probably better back up a bit and get all of your bunnies in a row because, in either case, now you have to communicate why you are doing this project.

So whom do you have to communicate with? How about: anyone who will be impacted by this project. Certainly that includes directly impacted end-users and their supervision and management. It also includes people in other organizations that may not be included in the initial project, this might be HR or some other organizaton. Why communicate with them? Because they will hear about the project and will naturally have questions about it, including why they are being included in the scope of the change, especially if they are unhappy with current systems and processes.

What needs to be communicated at this early stage? Frankly, it does not have to be complicated. It almost always begins with “We are moving to new ERP because…” and then you simply fill in the blank. This is also a good time to develop a good 15-20 second answer. Why? To get the key points across quickly. That said, you absolutely MUST be ready to provide details regarding what specific goals exist, by area/location, and how you expect to get there. Elevator speeches can only go so far – it takes details to calm people who are fearful of change.

We actually get asked frequently, “why do we have to communicate so early about the reasons for our new ERP project?” Our answer is pretty simple: because if you don’t, people will fill in the blank themselves. And you won’t believe what they will come up with, most of it from the depths of fear, distrust, or native suspicion. Here’s what we’ve heard people come up with:

So, why are they doing this to us (again)?

To get the company ready to sell (and all of us are going to lose our jobs)

To increase automation and efficiency (and all of us are going to lose our jobs)

Here we go again, more churn, churn, churn and someone else gets the butter (and we are all going to lose our jobs)

Get the point? If you don’t provide a good answer in advance, people will answer their own questions in the most negative possible way.

Your communication of the reasons or rationale for moving to new ERP is merely the start of a good communication strategy and plan – not the end of it. Oh, yeah, if you don’t have a comprehensive communication strategy and plan, it is most definitely time to get one. And for pity’s sake, if you don’t know how to do this, call someone who does. Everyone who depends on the future ERP system will eventually be grateful.

Lack of concerted communication to end-users about the reasons behind the implementation, the anticipated benefits stemming from successful adoption and the ways in which each individual end-user and executive are impacted will affect project success or failure.

Mitigation Step: Create and follow a comprehensive organizational change management plan – at the very least, get an expert involved to do an assessment of readiness and challenges.

Landscape of ERP Pitfalls – New Map Discovered!

ERP MapOne of our young, and deeply curious, co-workers discovered an artifact – a map – while browsing a dusty, old book store in Boston. She bought it for a pittance and took it home where she discovered the key to cracking its codes. No, she will not share those with us – something about job protection…

The map contains the key to how so many ERP implementations stumble and – this is most exciting – confirms that the Valley of Despair truly exists! Upon further translation, she has identified the title on the map as “The Land of ERP Pitfalls”. While translation continues, we have already identified several locations on the map that are both illuminating and thought provoking.

We are moving forward with a set of blog topics involving these pitfalls and key success factors for successful ERP implementations as they are uncovered from the difficult text of the map. h/t to the curious and talented young who illuminate the days of the middle aged, if we are wise enough to listen.

Product Innovation vs Product Complication: The “one minute strategy” syndrome

When is product innovation a hindrance?

jackalopeWhen it is innovation for innovation sake?

Let’s look at a company known for innovation and great products –Google; they have it right – or do they? It seems to me that product companies have teams that create wonderful new products, (Gmail, Google Maps) and you eagerly await the next one…what is the issue with that you say? The issue is these teams seem to stay with a product and tweak it and tweak it and feature enrich it until it ends up worse with each release. The age old maintainability and reliability over complication leads to poor usability.

These days, more often than not your hear the street complaining about the latest version-“Why did they remove select all?”; ”The search on the new version is awful, where is my old search?”; “Why are they auto filtering my email? If I wanted it in that folder I would have set a rule up…” – all complaints due to playing with the old rather than innovating the new.

Let’s look for a moment to the Insurance market – remember years ago when “time to market” was big? What did they do? Tweak the PAS systems to the point you can set up a new product in three days – to what gain? You cannot create and file a product in that time so why be able to get the PAS updated so fast? And why do they continue to invest in that feature?

Tweaking an old PAS leads to less reliability and increased maintenance; shortening the lifespan and forcing large injections of capital to replace – Why? Why not invest the short term dollars in enabling your enterprise to grow, facilitate change. The new breed of PAS systems are built on real components, with disconnected services and messaging – the Component Architecture.

More and more vendors are building tools based on such an architecture, removing the heavy integration and allowing the evolution of an enterprise component by component. No more breaking the old by adding the new, instead a simpler, proven method of extending or replacing the old without the integration and conversion nightmares of the past.

Why do I say product extension and feature tweaking is a “one minute strategy”? Because just like most Enterprise Roadmaps we see today, this development and innovation model lack thought and lacks a strategic vision. Instead of taking a moment to right the ship and steer a course into calmer water, these strategies propagate tactical solutions that never reach to the nub of the issue. We do not all have $50M to spend to keep replacing so we need an alternative, a different mode and that mode is to embrace the new architecture, get ready for it and then be able to accelerate change.

So next time you look at your product or your enterprise, try to think out of the box and stop trying to make a steering wheel better – it is round and it works…..look for ways to integrate it better….allowing future growth and expansion without the growing pains.

Redefining Success in People Terms

Success in people termsI suggested in my previous post that unmet business benefits, make ERP initiatives fail even when they are on-time, on-budget, and on-scope. If we spoke previously about failure, then let’s start here talking about success.

According to my dictionary, success is a noun with multiple meanings, yet the primary one is “the favorable or prosperous termination of attempts or endeavors; the accomplishment of one’s goals.” It’s not about the scope, timeline or budget, it’s all about the business GOALS.

So when we talk about redefining success – hitting your goals – in people terms, what does that mean? Defining where you intend to end is important, but so is defining how you expect to get there. Defining success in people terms means we also have to define how something will be made successful and who will do it.

Here are some of the “goals” customers have given us for implementing ERP:

  • To improve business performance and automation
  • To replace an old or legacy system
  • To better support the business across multiple locations
  • To better serve customers
  • To position the company for growth

Admirable reasons; terrible goals.

Why?

They can’t be measured and they give no clue how they could be achieved. They look good, but are sort of neutral and unobjectionable, actually saying very little.

When a client tells us they want to move to new ERP to improve business performance, it is the beginning of what becomes a very long – and critically important – discussion that looks like this:

What areas need improvement? Why? What would the improvements, by area, look like? What changes (people/org, role, process, system, or data) are required to achieve it? How will ERP enable this? How can we state this in measurable terms? What about timeframes for realization?

Starting with “improve business performance,” we can end with goals like this:

Through updated standards for purchase orders enforced in the Purchasing module at the field level, and through improved training of Buyers and weekly monitoring of conformance with these standards, we will eliminate 90% of incomplete purchase orders from flowing through the supply chain within three months of go-live.

By eliminating non-conforming purchase orders, we will reduce the effort of Accounts Payable clerks matching POs to vendor invoices which will be sufficient to eliminate three temporary clerk positions.

post-it-1Granted, this would be but one of many, many goals that would be documented to achieve “improved business performance.” But that is what it means to truly document goals within a business case and to define success in people terms.

Arriving on-time, on-budget, and on-scope are valid goals on any ERP implementation project. Anyone working in this business knows those goals are themselves hard enough to achieve. While they may be necessary when viewing ERP through the lens of an enterprise software implementation project, they are woefully inadequate when viewing ERP as a business transformation initiative.

If you want to really get your hands around how to make ERP successful, you have to spend the time, energy, and effort defining your goals more completely and concretely. They should enable and guide your implementation. If they don’t, head back to the whiteboard and lock the right people in the room until you get what you need. And if you don’t know what you need, get help defining it.

CRM Will Become Consumer Relationship Management II

CuttlefishThis piece expands on the preceding cuttlefish analogy loosely taken from a PBS NOVA show “Kings of Camouflage”. Just as cuttlefish were driven to develop intelligence to deal with a challenging ocean environment, so will CRM need to evolve to managing the total consumer relationship to keep the corporation alive in a real-time social web environment. To oversimplify (and irritate all of the product vendors out there), CRM now essentially manages the sales pipeline (i.e. the food supply of the corporation). Of course there are second and third derivative benefits, such as managing sales force statistics and marketing effectiveness, but the prime directive is essentially feeding the primal corporate beast.

This matches the analogy to any cuttlefish, food first (skip reproduction, not something I want to envision for corporations). Second is defense within the ecosystem, as it is best not to be eaten it you want to be successful. Before we can dive into the evolutionary changes that will occur to CRM we need to look at the environmental drivers of natural selection. I will break the topic into three pieces; a loose description of the ecosystem, how typically corporations handle the external ecosystem, and why it matters.

The ecosystem has become much more complex with the advent of the Social Internet, with the resultant time compression of impression dissemination throughout the total consumer population. Combine the increasing number of competitors, regulators, and special interest groups (predators), with an increasingly informed consumer (food); life for a corporation looks as difficult and precarious as in any primeval cuttlefish sea. A plethora of content starved, advertising fed Web sites are an archival repository of free and unedited consumer opinion, comparison, recalls, pictures, demonstrations, and any combination(s) of products and services (real and imagined). Social media provide the neural synapses of communication for all of this (dis)information to consumers, special interest groups, media, and regulators. Time and thoughtful editing have been successfully disintermediated from the environment.

Like a cuttlefish, most corporations swimming in the Web, have a marketing group who may (or may not) perform market research, target customers, and report market direction. Legal, finance, and engineering/development groups usually track regulation and compliance. Public relations will handle corporate communications. Naturally, all of this will be done independently in the organization, essentially in a vacuum. Some efforts will not even have a persistent data repository or memory, and likely none of it will be correlated and indexed for learning and re-use. In fact, the supporting corporate “senses” are rudimentary and essentially manual (endangered species material to say the least).

Why does it matter now, if it has not to date? Because the Web ecosystem itself has changed with the integration of social media. A Twitter or Facebook reference on any SmartPhone can direct customers to a YouTube video of your company’s semi-transparent exercise pants, its signature product. Even better, an ambitious DA has decided to round-up your customers for indecent exposure after “Mothers for Decency” (an advocacy group) cite your product for contributing to the corruption of minors (cash contributions abound for the DA and “Mothers for Decency” from concerned citizens). Federal and State regulators contact your warehouse in LA regarding your violation of garment content labeling laws with respect to importation and distribution. Your successful corporation is now on full display in the Web ecosystem for predators and number one on the endangered species list (cuttlefish extinction event).

As ridiculously contrived as the example is, the potential is obvious and needs to be addressed. Natural selection in the market will force corporations to evolve and the most successful will prosper. I contend the current corporate IT system most apropos to evolve to act as a repository to consolidate and index is CRM. CRM systems are by their nature flexible to extension and for the most part the latest and most up-to-date addition to corporate IT. Ultimately, this environmental information pertains to all levels of customers; past, current, and potential, a true universe of consumers.

Next we will look at some natural extensions and architectures to evolve.

Social Media: Not Just for Sales and Marketing Anymore

chirrupIn the beginning there was social media. And companies scrambled to create  their presence on twitter, facebook, and in the blogosphere, not wanting to be left behind.  Now what? “We need to engage our customers!”   Corporate twitter accounts chirped cheery tweets by the hour, and then Spambots battled spambots.  The corporate social media team thought it was all about push and brand awareness and building loyalty.

Then twitter became the complaint line of  choice. Having a complaint go viral became a great way to feel empowered, boost self esteem and bully the big corporate types. Trolls lurk on corporate facebook pages, co-opting every cheerful post by the corporate social media team with endless repetition of their gripes and calls for boycotts.

NEWSFLASH: Your consumers are not as interested in interacting with your brand via social media as they are gaining more transparency into your business and the products you provide. When they don’t like what they see, taste, hear, smell  or find out about you, they will react brutally and swiftly, enlisting their evil tweeting minions to pile on to their cause–and overnight you will have a viral PR mess to deal with.

Here’s an example of the type of social media threats to your reputation that lie outside your control.  Are you tapped in to monitor this site and any others that might be popping up to negatively influence consumer decision-making?

  • Sourcemap makes supply chains transparent to customers and consumers.  This is good news if you want to differentiate your product because you are committed to ethical sourcing. It will become a headache if you are involved with things like sweatshop labor in the third world. You will need to respond quickly across ALL channels if the word gets out on twitter that your products have negative health or political considerations.

If you don’t believe me,  hop over to twitter and see what brands are under threat of boycott right now. While writing this I see AHAVA, Starbucks, Monsanto, Koch Brothers and of course, BP, and I haven’t even started scrolling yet.

OK, its important to stay on top of this, but not just to address complaints, promote new products, and defend your brand.  The difficulties highlighted above should not deter you from leveraging social media to the fullest.  The really exciting new applications of social media are happening elsewhere in the business:

  • Smart companies are leveraging social media to build more intimate supplier relationships, creating a more level playing field between large and small suppliers.
  • Demand planning teams can and should leverage social media to gain advance insight into changes in consumer demand.  This can radically transform the way clothing manufacturers do their seasonal line planning, for example. Imagine the culture change in an industry that historically hasn’t even been able to track against key KPIs.
  • Social media now drives innovation. The smartest companies are extending internal R&D by crowdsourcing new product ideas and product tweaks.
  • Internal continuous improvement teams are leveraging tools like Yammer to move improvement teams out of the creativity-sapping white board walled meeting rooms and into virtual asynchronous interactions that capture good ideas whenever they occur.

Parting thought:  act quickly but look before you leap!

The very fact that social media has so much to offer to so many functions within the business means that there is danger of creating social media in smokestacks within your business, with each department quickly implementing its own tools to gain insight within a comparatively narrow lens.  Social media tools need to fit within an overall application roadmap that takes into consideration where your ERP and CRM partners are heading, how existing tools integrate with your current applications, and how you can slide and dice the data appropriately to get the insights you need to respond rapidly.

CRM Will Become Consumer Relationship Management

CuttlefishI was watching a PBS NOVA show “Kings of Camouflage” about cuttlefish, a close relative of the octopus and squid (yes, everyone has strange ways to relax…), and was struck by the creature’s intelligence and how that intellect had evolved. Being at the top of a family that includes clams and other mollusks would not seem to indicate a source of intelligence (well, given some people I’ve spoken to…), but natural selection has driven the development of intelligence and cutting-edge camouflage to blend with its environment and evade predators. It seems cuttlefish are a great packet of pure protein and at the top of the list for just about every other sea creature from fish to dolphins. This has been the imperative for it to be smart and a chameleon.

At this point you are wondering what does all of this “Wild Kingdom” digression have to do with CRM? Actually, from an analogous point of view, a great deal. If we view the Web and all of its manifestations as the sea and a corporation as the cuttlefish, with CRM as part of its brain and nervous system, the evolutionary comparison is a compelling analogue. In early life, the organism looked inward to its development to organize its cellular organization; however, it quickly had to shift its view externally to survive the environment.

The issue is the same, CRM organizes a company’s sales, marketing, and customer efforts with respect to itself. The Web with search engines, social media, mobile devices, etc. is always on, like the sea. Predators abound in this sea; a consumer with a bad experience, an advocacy group with contributions and grants on the line, government regulators with promotions or political office in mind, competitors looking to take your share and territory, employees, prospective employees, vendors, the list is endless. All of this information needs to be linked and correlated in one place with all of the corporate communications, sales, and marketing resources to ensure a fast and consistent response with tracking and reporting. I believe the best place to evolve that functionality within corporate IT infrastructure is to extend CRM’s nervous system outward.

Unlike IT, natural section rarely evolves competing “smoke stack” organs, it cannot afford to or the organism will be lunch. The rate of change of technology, the Web, and societal change will not allow IT the luxury to create vertical smoke stacks and then consolidate them later. Evolution will have to occur now, in realtime, ready for mobile. CRM would seem to be the best candidate as a starting point.

I intend to add further installments extending both the analogy and the proposed architecture. So kick back, get an order of calamari, and watch the show (PBS NOVA show “Kings of Camouflage,” too).