Want a smooth ERP implementation? Look to the process

ERP implementations have a terrible reputation.

Search ‘ERP Disasters’ and you’ll see competing lists of nightmares—lengthy projects that cost millions and trailed litigation in their wake. Nike and Hershey’s appear on the lists. But so do nonprofit organizations like the Sisters of Charity and the University of Massachusetts.

Of course, these halls of shame usually lack perspective. More software projects have succeeded than failed, even in the heyday of on-premises ERP. And despite the massive costs involved, traditional ERP systems frequently did streamline corporate processes.

Nevertheless, ERP rollouts often failed. They still do, according to recent research. Panorama Consulting Group keeps tabs on rollout success with its annual ERP surveys. In 2015, 21% of organizations described their implementations as failures. In 2016, 7% called their projects failed. The drop proved brief, and in 2017, 26% of implementing organizations reported “failures.”

An organization’s likelihood of implementation success depends on their ERP platform. Fewer cost drivers make for lower implementation spending, which results in a greater chance of success for cloud products. Complexity, hardware requirements, ease of use and support—all factor into the end result.

However, there’s more to an implementation process than the software platform. Nearly as many points separate cloud vendors from each other as distinguish ‘the cloud’ from ‘on-premises’ or ‘hybrid.’

These differences within platforms have special relevance nonprofits, who often stand to gain or lose the most from a software project. Nonprofits have tighter budgets, higher turnover, and sharper consequences than their for-profit cousins. When your dollars come from donors who expect you to direct them toward causes, the margin for error is decidedly slim.

That’s why every nonprofit should ask questions like the following before moving ahead with an ERP implementation.

Who will own your organization’s data? Who will clean it? Who will organize it?

Do you trust the vendor? Do you and the vendor have even remotely similar values?

More importantly, does the vendor respect your nonprofit as a partner, or do consultants treat you with condescension?

Know what makes for a successful implementation before you buy. I would even suggest making it a must-have.

Implementations involve three factors: the process, the product, and the partner. A smooth, satisfying implementation will bring all three into alignment.

1. The Process Should Be:

Proven. Look for a vendor whose roll-out process has worked for at least 1000 organizations.

Collaborative. In my experience, the most successful processes are those with the widest buy-in from client employees. Training should be a central priority for all parties involved.

Realistic. Every large-scale tech implementation will involve a valley of despair, a time of reduced productivity and team performance while the organization adapts to new processes. You can reduce the duration and depth of this trough through training, proper configuration, realization of system benefits, and strategic change management.

Structured yet dynamic. The right process will combine enlightened structure with wide flexibility. It will work alongside your organization to define and pursue your goals. The vendor should take time to learn your processes and should change them only in light of best practices.

Goal-oriented. The vendor should listen to your input and design the process to reach your goals. For example, if you want to emphasize automated workflow, your process will include both internal changes (labor-intensive manual processes will have to go) and system configurations.

Responsible. The process should not transfer data ownership. The vendor should assume both custodial control over your data and responsibility for it. This means that you should be able to specify the extent of backdated records—whether three months or a decade—to include in the data transfer.

Figure 1: Client Trajectory in Tech Implementation

2. The Product Should:

Configure. Whereas customization breaks code to fit clients, configuration uses built-in levers to fold around your nonprofit—no broken code, no costly upkeep. Customization might set fewer limits. But configuration allows vendors offer free updates, thereby eliminating your need to buy a new system every five or ten years.

Streamline implementation, even in distributed organizations. The system should support exchange rates, foreign transactions, multiple currencies, and several dozen languages. It should make implementation processes smooth and predictable.

Scale quickly and easily. The product should let you grow without imposing in-system penalties. In Xledger, once you define a base configuration at the highest level, your settings automatically inherit downward to smaller entities. If one subsidiary needs something the others don’t—say, if your Malaysia location needs a particular cost center—then you can add it for that entity without adding it for all. This means that Xledger clients never run out of system, no matter how much they grow.

3. The Partner Should:

Have similar values. There should be at least some degree of ideological resonance between you and your vendor. The vendor should appreciate nonprofit organizations and treat their leadership with respect. In considering values, consider also the structures that sustain them. A vendor pricing by subscribers has more reason to be customer-focused than one pricing by license.

Focus on stewardship. The vendor should emphasize sustained partnership rather than quick profit. Vendors that aim to dispense a product and get a check make poor partners for nonprofits.

Communicate clearly. ERP implementation doesn’t just change processes. It changes paradigms. It requires trust. Vendors should be up-front from the first demo to the final meeting. They should give accurate estimates of time and difficulties.

Train Trainers. Training should empower trainees to train others. Xledger aims to leave behind employees so well versed in the system that they can set up new entities. Nonprofit hospital network CURE International provides an excellent example: well after the initial go-live date, CURE implementation manager Dave Helman was able to set up additional entities in multiple countries.

An ERP implementation is a massive investment—not just of money, but of time and stress, both on your part and on the part of everyone else in your organization. Cloud platforms minimize this cost, but they don’t eliminate it completely. Don’t feel hesitant to ask details—the right vendor will gladly discuss them.

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Xledger has successfully implemented 9300 clients in 60 nations, with an average implementation timeline of three to six months. Designed for trust and grounded in transparency, the Xledger Implementation Methodology (XIM) has helped secure a 98% customer retention rate. If you’d like to learn more about XIM or Xledger in general, please contact us. We look forward to hearing from you.