Civ 004 ERP implementation is fundamentally an engineering endeavour Created by James on 6/18/2013 8:38:19 AM
In this article I will discuss why the implementation and operation of Integrated Business Information Systems (ERP plus) is fundamentally an engineering endeavour.
What IS ERP?
“Enterprise Resource Planning System” (ERP) – sounds impressive, doesn’t it?
What is an ERP REALLY?
Fact is that many organizations only use their ERP as a glorified accounting package and then use diverse third party or home grown products for the specialized operational side of their business.
So, if you have an accounting package you need to be careful when somebody tells you to replace it with an ERP, you could spend a lot of money to recreate what you already have.
ERP is NOT magic, bottom line, it is just a collection of software that you use to run your business which you MAY buy from one of the mainstream vendors or from a niche specialist, like ProMan in the practice management space, or something your business developed years ago.
Some time ago I coined a new acronym, “IBIS”, which stands for “Integrated Business Information System” – which is the mishmash of computer software that the average business uses to run its business.
This may comprise a big brand ERP, let’s call yours “FRED” which stands for “Frightfully Rediculous Electronic Device” or one of the other options mentioned above, plus whatever else you have.
I recently undertook a Pulse Measurement (diagnostic investigation) into the operations of a large listed company running a big brand FRED only to discover that they were using it really badly, are using perhaps 10% of its functionality and have a plethora of engineering and other systems around it some of which are there purely because FRED is so badly implemented.
Then there are all sorts of add-on bits and pieces including a plethora of spreadsheets – please DO keep in mind that spreadsheets ALSO count as custom development and accountants are extremely good at moving most of what is done out of the ERP into spreadsheets and then kidding themselves that they are NOT customizing the ERP – which really is nonsence!
Some years ago I undertook a Pulse Measurement into a big brand FRED installation which had cost R27 million to implement so badly it was useless. When I mentioned that the installation would have to be re-done the Financial Director was unfazed -- he was running the whole business on Excel anyway – at least the financials!
What is required to configure an IBIS or ERP?
One of these systems – whether you call it IBIS, or ERP, or FRED, or accounting system or @#$%&*^% is a machine.
Because the fundamental building blocks of business are remarkably similar, the building blocks of FRED are also remarkably similar, no matter which system you buy – which is why it is a pretty pointless exercise to trash FREDX and replace it with FREDY because the reason it is not working is because YOU are not using it right and it has nothing to do with the machine.
After all, Debtors and Creditors and General Ledger and Cashbook, or whatever labels you apply to them, are largely the same – a Debtor has an address, you send them invoices and they pay you – how much different can twenty different Debtors packages be?
How you classify your Debtor accounts, and your Chart of Accounts and how you classify your products, and how you classify your accounting transactions …
THAT IS DIFFERENT
There are as many different ways of doing that as there are people on the planet.
No two people will configure the same module in the same company the same way and the same person (consultant) is unlikely to even configure the same module of the same software in two different companies the same way.
So, you can put in neatly ordered, logically structured data or you can put in scrambled nonsense – what I call spaghetti.
Fact is that nearly all ERP implementers on the planet make spaghetti the same way, they throw some text in a list, with no attempt to put structure or logic to it and they sit back and bill the client in perpetuity to try and make sense of the spaghetti while the client struggles to get answers to their most basic questions.
Problem is that an ERP should NOT be populated with spaghetti, it should be populated with neatly structured hierarchical descriptions and associated codes that accurately model and describe the business and make perfect sense to business executives, managers, in fact anyone who understands the REAL WORLD ENTERPRISE.
The reason most executives say to me “Dr Robertson I do not understand ERP” is because there is such rubbish in the system that NOBODY understands it, the IT “professionals” pretend that they do because they make mountains of money out of re-organizing junk data.
And, what is even more alarming they think that is the ONLY way to do it!
If engineers designed and built bridges the way IT “professionals” configure and implement most FRED’s the bridge would comprise of dumping truck loads of reinforcing steel, concrete and whatever other junk the “engineers” could find until the valley was full and they could then level some sort of deck on the top that would allow vehicles to wind their way over in first gear constantly checking to make sure they did not fall off the edge.
Reason being that ERP implementation is FUNDAMENTALLY an ENGINEERING endeavour and the industry is dominated by accountants and IT trained people who do NOT understand engineering.
The accounting approach to bridge design involves putting a team of young graduates on-site eight hours a day five days a week month in and month out with minimal supervision, other than by the client, and billing like stink and blaming the client when the bridge does not work.
But then there are “soft issues” which are actually harder than concrete, which virtually no-one understands – so putting an engineer on to run an ERP project is also fraught with danger.
What is the Engineering Approach to IBIS and ERP?
I have spent 22 years seeking to bring “the disciplines of engineering to the IT and ERP industry” – so far I have failed dismally – I have pretty much sorted out myself how to do this engineered ERP thing but I still have to figure out how to scale it because it is so different to what the people in the industry are currently doing that almost none of them understand me.
On the other hand, there is so much other stuff that the engineers do not understand that I cannot just hand it over to them either.
I AM getting closer.
What IS the engineering approach:
n Start with a problem statement – no problem, no project
n Analyse, analyse and analyse some more
n Precision and attention to detail
n Multi-disciplinary teams
n Check and double check
n Meticulous documentation
n Design against failure
n Fundamental first principles
n Top down bottom up construction
n Model the REAL world
n Critical analysis and dissection of each and every failure
n Talk about failure in order to understand and prevent failure
YOU do it all the time, you take it for granted, it was imbibed in your years at University or College, your time as an Engineer in training, it is so much part of who you are and what you do that you would have to really scratch your head to figure out what you do and yet, guess what, the IT industry does virtually NONE of those things!
I could go on for hours about this thing I call “the engineering approach”.
IT and ERP and IBIS and FRED projects fail constantly and the failures are getting BIGGER and more frequent and damaging or trashing businesses and we are even starting to see public reporting of these failures, such as 26 BILLION British Pounds wasted in the UK in the last few years on failed and sub-optimal IT projects!
So we need to bring “the engineering approach” which is the same for bridges, buildings, subways, … AND ERP’s to the ERP space.
Why are engineers NOT the leaders with regard to IBIS and ERP?
Engineers are NOT the leaders because most engineers think that ERP is the domain of the accountants – which is roughly the same as engineers deciding not to build a bridge because they never use that road and then leaving it to the road users to build the bridge since, after all, they are the ones who will use the road they are best equipped to design and build the bridge.
Accountants NEED engineers to help them design, configure, commission and operate ERP and IBIS systems, just like they need a plethora of other technicians and technical professionals.
I hold that it is time for engineers as a profession to start investigating how to get involved in this field, you DO know a lot about what is required, you just need to assemble a multi-disciplinary team like you do for other projects!
What should SAICE and ECSA do about it?
At one level, difficult to call.
We need to start talking about the failures AND we need to start talking about “hey guys, this ERP implementation thing you do is an engineering endeavour don’t you think you should involve us” and, if you are willing to be bold – “hey guys we do NOT have failures like you do, maybe you should drop by for coffee and a chat”.
And, ECSA needs to start making noises about “we think that the art and practice of business information systems implementation is an engineering endeavour and we think it should be brought under our umbrella” and “we consider the failure rate of ERP implementations to be a national disgrace that needs intervention”.
It might take a few years, it might take twenty years but I passionately believe that ONE DAY ERP implementation will be a proud engineering discipline with a track record of close to 100% project outcome success.
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