Three Solution Design pillars of ERP success

What is a succesful project? How do you define that? Is it when a project is closed and you have not exceeded the initial budget, or maybe even the time schedule? Or perhaps that only two Project Managers was replaced during the project? :D

This is, in fact, a philosophical question. And if you know something about theoretical philosophy, you also know that there are no right (or wrong) answers to these types of questions. But, if you ask me I would say that in order to define a project as succesful you need something to measure this with. I.e. you should setup some KPI:s or OKR:s that you can measure when the project is closed or even 6 months after. I will not give you any correct answers, since they don´t exist, but with 12+ years of experience in the field I can say with confidence that there are mainly three factors that decides the outcome of the implementation project:

1. Process: Does the system support the business processes?

2. Data: Is the data in good shape and with high quality?

3. People: Are the users able to use the system to carry out their day-to-day work?

Three solution design pillars

Process

Process architecture is an organizational blueprint that outlines all the business processes required to deliver products or services. It delineates the operational flow of the organization in an orderly fashion. A frequent error occurs when there’s an attempt to replicate the functionalities of the old system during the deployment of a new solution. Specifically, this involves transferring existing on-premise application functionalities directly to a cloud environment. Such an approach confines the transformation to merely the operational aspects of the application, rather than its full potential. Trying to reproduce on-premise applications within a SaaS framework often results in over-customization, which hinders the full utilization of the platform’s capabilities and restricts access to ongoing innovations offered by the standard service.

To truly derive business value, it’s advisable to embrace a business process-centric methodology. This strategy concentrates on enhancing business processes rather than merely replicating specific technological features. It’s crucial to ensure that business requirements are clear and not entangled with the specifics of implementation or prescriptive methods, but rather are aligned with desired business outcomes. The ultimate goal is to transform processes by capitalizing on the platform’s inherent features, not by duplicating the old system. This approach emphasizes the fundamental process, offering a solution that is sustainable, cost-effective, and simpler to manage compared to a direct transfer of existing systems to the cloud. Moreover, it circumvents the accumulation of technical debt due to unnecessary customizations. In other words: Any transformation starts with defining your processes, which is also a

good time to revisit and improve them.

Example of a process map

Data

An implementation is doomed to fail if it’s based on incomplete, incorrect, or deceptive data. Therefore, it’s essential to have a thorough comprehension of your data and its role within the broader solution framework. The correct data enables the identification of actionable insights and analytical intelligence, enhancing Business Intelligence. Consider the following types of data:

• Master data: This encompasses the unchanging data, like customer and product details, which are utilized and circulated during your business operations. This is usually the main factor for bad data.

• Transactional records: These are the logs of business transactions, including sales orders, customer payments and expense reports, which are generated, maintained, and documented throughout your business processes.

• Documents: This category includes business-generated documents, such as sales orders and customer invoices, as part of your operational processes.

• Reports: These are structured or sifted pieces of information, like trial balances or accounts of aged debts, that act as inputs or outputs in your business dealings.

At the very least, you should begin with an insight into the current application of your data and how it will bolster your long-term objectives. Early planning of your data strategy also paves the way for enhanced scalability. Start early to map all relevant data entities between the systems, since this is often a very time consuming task. If you follow the iterative Data Migration lifecycle process, you will come a lot closer to good data quality than if you don´t.

Data migration lifecycle

People

ERP-systems are pretty much the business backbone and often used as backend to keep all transactions integrated between the sales transactions and General Ledger and so on. However, there are always some kind of human interaction with the system, and to be able to add value in the solution, the People needs to be considered when designing it.

It´s quite often we come across solutions that really feels like it´s "engineered". I.e. the solution works technically but the user experience is really bad. In those cases, the system will not be used as intended and the value is thrown out the window. It´s also important to communicate the changes in processes with a new solution in a way that engage the users rather than frightens or confuses them.

Sources

Implementation Guide Success By Design, 2024. Microsoft Corp