The following is a guest blog post by Sallie Parkhurst, Carol Mortimer, Michelle Sanders, and Heather Haugen PhD from Atos Digital Health Solutions.
According to Gartner, approximately 75% of Enterprise Resource Planning (ERP) implementations fail despite the significant opportunity for process management improvement in key business areas including human resources, payroll, supply chain management, and finance. We gathered critical feedback from experts who have lived through hundreds of implementations across a broad spectrum of industries. Their advice was insightful!
Our discussion focused on three distinct areas where leaders should focus in order to avoid some of the common missteps of large complex implementations. That is, leaders must clearly define their strategic approach to these key business functions beyond the selection of ERP tools. This work spans the system selection and implementation phases of an ERP project. Engaging the appropriate internal experts early in the process ensures effective governance, reality in the “current state” and data accuracy. This effort is required for the entire life cycle of an ERP. Finally, leaders need to consider the resources, time and leadership required to continue successful adoption after implementation; this is often left until after implementation and creates significant financial surprises and resource constraints.
Clearly Defined Strategy:
- Leadership and Communication: Most ERP systems have an impressive array of functions and options to make processes more efficient and effective. How those systems are used in your organization must be defined, communicated, and governed throughout the entire process. The leadership team is ultimately responsible for this effort, but must consider how to best communicate and engage the entire organization to achieve the goals. The change management effort is quite extensive and is a key predictor of success!
- Functionality: The functionality you need should be driven based on your business needs. While this seems obvious, many organizations buy a suite of products that includes more advanced functionality than they need, functionality they can’t take advantage of because of other system constraints, or functionality that requires data from other systems they don’t have. Set the parameters for demos and consider defining the scenarios to get an accurate picture of system capabilities for your specific needs.
- Interfaces: ERP systems can interface with many different systems ranging from clinical systems to warehouse applications. This is a great opportunity to ensure better overall integration of business processes, but don’t underestimate the work required. Ask about the cost of interfaces, maintenance required, potential impact from upgrades, and any limitations of your current systems and data specifications for accurate and efficient electronic transmission. Also, be sure to ask about any third party vendor software required during discussions involving interfaces.
Engagement of Experts:
- Knowledge Experts: Most organizations don’t engage their internal experts early enough in the project. Involving your subject matter experts during system selection can be tricky, but it pays big dividends in the end. These experts know the current systems or manual processes, but they also know the workarounds and issues that need to be addressed. Ensure that these people are also involved in defining data tables and other “area specific” customization.
- Document Current State: This is cumbersome work, but organizations that take the time to define their current workflows gain more efficiency and cost savings from their new ERP systems. When this step is skipped, implementations stressors (time and resources) force the new system to mimic old system processes or manual processes that degrade the overall value of the new system.
- Competencies and Development: Your new ERP system will probably stretch your team’s competencies, and will often require additional team training. This is a great opportunity to offer growth opportunities in your organization. It may also require hiring for specific skill sets.
- Priorities: The toughest question a leader faces when implementing a new system is “What are we going to stop doing to ensure the success of this effort?” Give your team time to focus on and perform high quality work.
- Resource commitments: Any large system capable of making dramatic improvements in efficiency and accuracy of business processes will always require an investment of time and resources after implementation. Organizations almost always underestimate the long-term investment associated with maintenance, upgrades, training, and optimization. However, organizations that commit even a few hours per week in a disciplined manner find it easy to maintain and even improve on the value they expect from their ERP.
- Beyond implementation – achieving adoption: The difference between simply installing a system and achieving business value lies in the long-term commitment by an organization’s leaders to optimize the use of the system.
ERP tools offer a significant opportunity to better manage critical business functions, but adoption of those systems requires:
- A clearly defined strategy for the key ERP business functions you plan to implement;
- Engagement of your internal experts early and often; and
- Commitment of resources and funds to realize the value of your investment.
About the Authors:
- Sallie Parkhurst is Senior Project Manager and an expert in Finance for ERP implementations for Digital Health Solutions Consulting, Atos.
- Carol Mortimer is Senior Consultant and an expert in Supply Chain Management for ERP implementations for Digital Health Solutions Consulting, Atos.
- Michelle Sanders is Senior Project Manager and an expert in HR and Payroll for ERP implementations for Digital Health Solutions Consulting, Atos.
- Heather Haugen is the Chief Science Officer for Atos Digital Health Solutions.
- Inbal Vuletich serves as the editor for Atos Digital Health Solution publications.
What Clients Value about Atos’ ERP Solutions and Services:
- Expertise across all ERP business functions
- Depth of knowledge of the ERP systems and how they function in various environments
- The combination of industry expertise and system expertise
- Ability to solve problems and understand clients’ challenges
- How our team cares about their problems and challenges like they are our own
About Atos Digital Health Solutions
Atos Digital Health Solutions helps healthcare organizations clarify business objectives while pursuing safer, more effective healthcare that manages costs and engagement across the care continuum. Our leadership team, consultants, and certified project and program managers bring years of practical and operational hospital experience to each engagement. Together, we’ll work closely with you to deliver meaningful outcomes that support your organization’s goals. Our team works shoulder-to-shoulder with your staff, sharing what we know openly. The knowledge transfer throughout the process improves skills and expertise among your team as well as ours. We support a full spectrum of products and services across the healthcare enterprise including Population Health, Value-Based Care, Security and Enterprise Business Strategy Advisory Services, Revenue Cycle Expertise, Adoption and Simulation Programs, ERP and Workforce Management, Go-Live Solutions, EHR Application Expertise, as well as Legacy and Technical Expertise. Atos is a proud sponsor of Healthcare Scene.