Why is ERP very inefficient?

"Looking for death may not necessarily lead to death, but there is still a chance of not dying !" In a burst of laughter, the Chinese ERP expert was not able to smile. Wan Ke's black plain-style "joke" is aimed at the "classic confusion" of Liu Chuanzhi's "not waiting for ERP, but waiting for ERP. On April 9, January 10 this year, at the Second Meeting on Enterprise Informatization Supply and Demand sponsored by ERP World Network, some enterprises raised this "classic confusion.

Wan ke believes that the so-called "waiting for death" means that many enterprises realize that if they do not carry out Informatization Construction in the competition, they will lag behind their competitors and be ruthlessly eliminated by the market; however, "looking for death" only indicates that the current failure rate of domestic enterprise ERP projects is very high." In an interview with a reporter from this magazine, he swallowed up the humorous tone and looked very serious. He was deeply worried about the current situation of "extremely high failure rate" in the informatization construction of domestic enterprises.

ERP is definitely not a product, but a process

"The implementation of ERP is a very painful process," Wan Ke said. "If we only use the implementation of ERP as a system installation, therefore, it is certainly difficult for enterprises to cope with the impact of ERP implementation."

Generally, the implementation of ERP takes two to three years to see the results. It not only involves the company's capital investment, but also requires all employees to make great adjustments in their duties and work habits. It is the redistribution of the company's rights, responsibilities, and profits. Therefore, enterprises must make full preparations for implementing ERP in terms of financial resources, manpower, energy, and psychology. Otherwise, when some personnel lose their original rights and interests due to institutional adjustment, the implementation expenditure is far greater than the budget expenditure, and the ERP system cannot achieve the expected benefits for a long time, internal enterprises may have a great rebound in the implementation of the system, so that the implementation of the project is abandoned halfway.

"When signing contracts with international giant enterprises with powerful ERP providers such as IBM, sap, and Oracle, we often sign the ERP implementation contract in year 35, which is implemented progressively within a few years, "Professor Wanke said with a profound sense," While many ERP providers in China are just like selling 'brain platinum, during the promotion of ERP projects, traditional product sales methods such as 'sweeping the market 'and 'distributing the goods' are still adopted. In order to sign in to the ERP projects of enterprises, the business personnel start competition at low prices and disorder, it is impossible to meet any requirements of users simply by selling the product without long-term consideration. The result is that the implementation quality is low and the ERP project effect is generally unsatisfactory."

As a process, the importance of ERP implementation sequence is often ignored. Many enterprises implement ERP in the order of hardware and network, ERP software, and training. This sequence causes a great investment in ERP in the early stage, which puts a lot of psychological pressure on implementation. Due to the long implementation cycle of the software, the hardware product has been greatly devalued when the software is completed, resulting in unnecessary waste. In addition, the hardware requirements are unclear before the software is determined, which often results in over-standard hardware purchase and waste. "The correct sequence should be training first, software, and hardware ."

The selection of project managers determines the success or failure of Enterprise Informatization

When implementing ERP, enterprises should make three choices: software selection, implementer selection, and Project Manager Selection. "As long as the software provider has a good reputation and a certain degree of development strength, the difference between foreign countries and China is not great", Wan ke believes that, "The main measure of ERP is the implementation of functions, implementation methods, personalization, differences with enterprise business processes, and management level."

Implementers can select professional consulting companies or software vendors. The weakness of professional consulting companies is that the degree of understanding of the agent software may be insufficient, and the secondary development capability may be low. Software vendors may not know much about the industry's operation models. Enterprises should eliminate these vulnerabilities when selecting implementers.

"The selection of project managers is critical. The biggest factor for ERP Success is the project manager," Wan Ke said. "Chinese enterprises often ignore this point when implementing ERP ."

The project manager's job is to help the president make decisions, but the importance of this profession is not reflected in the selection of talents. When hiring Vice President, enterprises will carefully examine the abilities and character of candidates, but will not examine the project manager in implementing ERP projects. Some enterprises trust the Project Manager based on the implementer. They think that selecting a famous implementer is equivalent to selecting a good project manager. In fact, a company may have dozens of projects under implementation at the same time, and the capabilities of dozens of project managers are also uneven, so the overall implementation effect may be greatly reduced. Therefore, if an enterprise does not have a high-quality project manager, even if the ERP software used is expensive, the selected implementers are well-known and it is difficult to achieve the desired informationization effect.

"With high-quality project managers, the final criteria for successful ERP solutions are market tests," Wan Ke told reporters. "So, the implementation strategies of implementers (including software vendors and implementers) should be appropriate."

Apply the ERP implementation strategy of "Rural cities surrounded"

It is not uncommon for many well-known foreign enterprises to encounter "waterloo" cases in China. Therefore, far-sighted enterprises regard implementation capabilities as the most important indicator for examining software companies and consulting companies. However, the success or failure of implementation is closely related to whether there is an appropriate implementation strategy.

The implementation strategy is the overall planning for enterprises to implement ERP. The scale and complexity of the ERP system determine the difficulty of implementation and the huge impact of implementation failure on the Enterprise. Therefore, both the implementer and the user side are very cautious about the ERP implementation strategy. However, the two sides have different opinions on how to implement the solution based on their respective positions and interests.

The implementer believes that the ERP system is designed based on the scientific management concept. Enterprises should try to reform their own institutions, systems and culture to adapt to the requirements of the system when implementing ERP. In this way, enterprises can take a step in management after implementing ERP. The implementers generally do not agree to do too much work on software personalization, because the personalized workload increases the implementation difficulty and cost, and the implementation cycle is extended, it also brings difficulties for future upgrades and maintenance. The user side believes that the survival environment of the enterprise determines the particularity of the enterprise. The standardized management model is no longer advanced enough to solve the problem. It requires enterprises to make huge reforms within a short period of time, therefore, we hope that the implementers can meet the Personalized Requirements of enterprises as much as possible.

"When the two sides are deadlocked, we may wish to jump out of the box and adopt a completely different implementation strategy-the ERP implementation strategy of 'rural cities surrounded ", wan Ke said. "The ERP project is a very complex system project, and the core part of the ERP project is far-fetched, which is equivalent to a city with powerful enemy forces. In the face of such an implementation environment, in order to achieve implementation success, we must start from the relatively independent non-core part of the enterprise, that is, the rural part, while enhancing their informatization capabilities and strengthening their own strength; complete the rural occupation and prepare for the final occupation of the city."

For an enterprise, which links are regarded as "Cities" and "rural areas? An enterprise is nothing more than a business entity that provides products or services. From the perspective of the process, the business activities include raw material input, production and processing, human and material resources, technical capabilities and financial support, output and sales. Professor Wanke calls this core process of manufacturing "city", and the marginal link that provides input, output, and assurance for the process "Rural ". Because manufacturing relies on edge content to start. Edge links of input, output, and assurance serve the core production and manufacturing, and have little dependence on other links. Therefore, they can be started in ERP implementation without being influenced by other components, when most of the edge links are implemented, enterprises will be able to complete the transformation of the "core" part with confidence after accumulating the experience and capabilities of information transformation.

There are many success stories about the implementation strategy of "Rural cities surrounded" ERP. "Among them, the Dell Computer is the most typical ." In 1994, Dell spent $0.1 billion on sap r/3, transforming the company's "city" part, namely manufacturing. Two years later, Dell had to give up sap and declared a failure in the "city" strategy. In 1997, after paying $0.1 billion and two years of intense tuition fees, Dell adopted the "Rural cities" ERP implementation strategy. First, we chose the product of I2 technology company to transform its procurement (the "Rural" part operated by the company, then oracle was selected to transform Order Management (another "Rural" part operated by the company. One year later, Dell chose glovia to transform its manufacturing (the "city" part operated by the company. Finally, we completed Dell's ERP strategy. When introducing Dell's ERP implementation strategy, CIO Terry Kelly said: "We have a little bit of an answer to get a faster return than a one-time ERP ."

It would be too simple to write a program for ERP. A good ERP system definitely represents an advanced enterprise workflow, which sap calls best practices. Without in-depth understanding of various industries, the ERP system has no practical value. When deciding on the ERP system, enterprises should also prepare to transform their own generation processes so that the overall management of the enterprise production level can reach a new level. There are three key points in ERP. One is what the boss knows; the other is that an international ERP product, SAP, orcale, and so on must be selected; third, we must sort out and optimize the business process before this (the best way to restructure) If there is no first item, it is basically a dead thing; if there is no second item, it is a chronic poisoning, and at most it becomes a nondescribething thing, it is the computer of the existing process of the enterprise, not ERP at all; there is no third item, and it is likely that only a number of modules that do not cause conflicts between individuals and departments, such as the inventory finance module, cannot introduce key production, supply, and marketing modules.