ERP Case Study: Everything that could go wrong turns out right in the end
This ERP case study illustrates how a very problematic implementation can be turned into a success for the company. It just takes time.
The hardware platform chosen for the ERP software system at a 750 person consulting engineering company was undersized and underpowered. After the initial load of some 850 projects, there was already very little disk storage space available at go live!
As a result, projects were set up with the absolute minimum information possible to save disk space. If any of the data was incorrect, such as budgets or hourly rates, it was virtually impossible to make modifications to project data as the whole system was so slow.
Inaccurate Project Reports
Project managers took full advantage of the fact that project reports were not always up to date and accurate. If a department manager questioned costs on a project that was over budget, the project manager was quick to blame “the system”.
“The system” became the focal point for all project related issues and project managers were soon creating their own little sub systems to manage projects. This made the project reports even more unreliable as time and expenses did not always reach the accounting department to be processed in the ERP system.
There was also a very long wait at the end of each month for project billing summaries as it could take more than three days for the overworked CPU to generate billings for the company!
Finally, with a change to a more robust platform and increased storage capacity, the ERP software was able to function and all the projects were populated with more meaningful data.
However, a lot of the project managers did not like the new system generated invoices and they were convinced that the clients would not like them either.
Almost a year after the initial implementation, many invoices were still being prepared outside of the ERP software system. These invoices seldom matched the system generated billing amounts which led to a great deal of manual adjustment at the end of every month and delayed financial reports.
One of the original deliverables identified at the start of the implementation project was a turnaround time of four days (instead of three weeks under the old system) for client billings and to have financial statements available by the 6th of the following month. This was not possible unless accurate data was flowing directly from the project module through the billing system and into revenues. The manual manipulation of data by the project managers was labor and time intensive.
Success at last
The situation was finally resolved when the engineering company in Canada was merged with a group of U.S. companies by the parent organization. A directive came down from the CEO to project managers across the organization to work with the ERP system, not against it.
This ERP system was “my baby”. I had worked hard to sell it to the managers for over year against a wall of opposition but finally I could finish implementing all the modules properly.
Within two months I had the four day billing turnaround and financial statements generated by the 6th of the month.
In spite of the hardware issues and the long drawn out opposition, in the end the implementation was a success on a number of levels:
The ERP business process was written into the company’s project financial management manual.
The company finally had reliable, real-time data to use for project management and cash flow forecasting.
And, going forward, with a well defined, generally accepted business process it was much easier to implement the ERP software solution in other companies acquired by the parent organization.
Box 433 Enderby BC V0E 1V0 Canada
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