The Science of Cloud ERP Utilization

There are not many public theories on how to maximize ERP utilization. There are approaches that do a commendable effort in identifying some of the factors that influence ERP utilization.  What is lacking are predictability, repeatability and harmony across the key components of a business solution.  In my 25 years of ERP consulting experience, I have never encountered a single customer that utilized over 60% of the ERP software.  Given the lack of utilization and the money needed for Cloud ERP implementations, I am convinced this is a problem that finally must be solved!   We are in the second generation of ERP software and the only advancement that we in the ERP implementation arena have made is to retract our initial recommendation of customizing ERP for greater customer value!

The purpose of this article is to provide an overview of my theory on ERP utilization.  The scope of this article will focus on the Cloud ERP deployment model.  I have yet to complete the rigors of the scientific method to verify my theory.  However, I would like to share my concepts with you and partner with you in growing the collective knowledge.

Before we jump into the model there is a fundamental assumption that must be addressed.  First and foremost, services trump software in an ERP cloud delivery model.  If the customer does not have any reliance or trust on the available ERP services, the window for greater ERP utilization is exponentially reduced.  Given the assumption that the ERP Cloud vendor provides a competent level of cloud ERP services (prerequisite), I will explain my theory on ERP utilization.

ERP Utilization Is More about Enablement and Less about Automation

First we need to revisit the concept of a business solution, the key components, their relationship, and influence on ERP utilization.ERP Business Solution

Business Solution DefinedJust as technology has the smallest part to play in ERP implementation success, ERP software has a smaller role to play in ERP utilization.   Business process maturity and the organization’s ability to change have a greater impact on ERP utilization.  To elaborate on this thesis I will make use of two models:

  1. Capability Maturity Model Integrated (CMMI).
  2. Organization Capacity for Change (OCC).

The reasons why I selected CMMI as the business process maturity model are (1) general adoption and acceptance, and (2) business process maturity characteristics can be observed.  I appreciate the fact that CMMI primarily focuses on software development activities and unfortunately ignores business process re-engineering.  However, I believe that the CMMI model as effective model to elaborate on my themes on ERP utilization.

I find that Organizational Change Management (OCM) is more of a project-based effort to enable an organization to meet a specific event.  This approach works very well with an On-Premise ERP solution where upgrades are measured in years.  However, in the more dynamic Cloud ERP solution model, change is more rapid.  ERP Cloud updates and upgrades happen in months, not years.  What I really like about OCC is the greater focus of providing the organization with the skills and flexibility to handle known and unknown changes.  Organizations change one person at a time and if every person has the capacity to be a change agent, then naturally the organization will adopt and manage change faster.  OCC is an emerging model, thus there is limited content regarding how to assess and measure OCC for an organization.

If an organization has to wait on an ERP Cloud vendor or a Systems Implementation (SI) consultant to provide guidance on ERP utilization strategies then there is a high probability that the organization will never reach their ultimate goal of effective ERP utilization.  The organization’s ERP experience will be more reactive than proactive.

With all that said, consider the following conceptual model:Model for ERP Utilization

Linear Regressive Model for ERP UtilizationI propose a multivariate linear regression relationship between business process maturity, organizational capacity model for change with potential ERP utilization. This simplified model is based on the following assumptions:

  1. A set of ERP features require a certain level of organizational and business process maturity for a successful experience.  For additional information, see my article on Business Leads and Technology Supports.
  2. Based upon the CMMI level and OCC for the customer, we can infer the ERP features required for maximum ERP effectiveness.
  3. OCC has a greater influence than CMMI on effective ERP utilization.
  4. Software changes will happen more rapidly in an ERP Cloud delivery model versus a tradition ERP On-Premise model.  Therefore, OCC must become an ongoing competency (versus a one-time effort) for long-term ERP success.
  5. “It is generally not fruitful to impose a very sophisticated process on an organization whose maturity is low.  The maturity of an organization not only depends on the skill sets of the individuals, but also on the chemistry of the team.” (Alexia Leon, 2012)

Based on the above model, I conclude that customer enablement must be an ongoing exercise that runs in parallel or even precedes ERP automation.

Model versus Reality

I consider myself more of a pragmatist than a theorist.  Models are great to elaborate upon concept(s) for discussion and argument.  However, conceptual models are limited in the value they provide to customers if there is no method to align reality (i.e., “as is”) with the optimal path.  Consider the following illustration:

Actual Versus Model

Actual Versus Model

Key Points and Observations:

  1. In a majority of cases, there is a difference between potential ERP utilization and actual ERP utilization experienced by customers.
  2. In order to promote repeatability, there should be a logical progression that enables customers to maximize ERP utilization (i.e., roadmap).
  3. To minimize ERP Total Cost of Ownership (TCO) and eliminate cost constraints, ERP Cloud vendors should provide customers with the ability to increase ERP utilization without heavily relying on consulting services.

As we continue with the model elaboration, we find that there are regions that are not practical for a given business process maturity and organizational capacity change values.  Consider the following:

ERP Utilization Model Value Set

Potential Values for CMMI & OCC for ERP Utilization prediction

Key Points and Observations:

  • Big areas in red represent a subset of possible values given that the scenario occurrence is highly improbable. For example, an organization with a CMMI level 1 maturity cannot expect to utilize 100% of the features available for a Cloud ERP service.
  • The permutations of CMMI and OCC levels indicate a linear relationship for targeted ERP utilization.

The goal is to define an ERP utilization approach that is repeatable and reliable.  Far too often, customers spend thousands of dollars on a “point in time” ERP strategy that requires additional funds to revise the strategy as the ERP technology changes.  The ERP utilization strategy must start with “where the customer is at” and provide a series of ERP features and prerequisite enablement activities in order to increase utilization.

 ERP Utilization Roadmap

I propose that long-term ERP utilization should be a series of incremental quick-wins (i.e., Business Process Management) and paradigm shifts (i.e., Business Process Re-engineering).  Consider the following illustration:

Linear Relationships with ERP Factors - revised

Key points and observations:

  • Any deployment of ERP features that require a significant organization change is not a quick win. People do not change overnight (i.e., Set X).
  • An incremental approach like Business Process Management (BPM) is required when deploying new ERP features at the same CMMI level for a given business process (i.e., Set Y).
  • Set Y includes the BPR enablement activities and ERP feature deployments required to align with the logical maturity path. Note that only incremental change is required to implement targeted ERP features (thus, a quick-win).
  • A radical approach like Business Process Re-engineering (BPR) is required when deploying new features across multiple CMMI levels for a given business process.
  • Set X includes the BPM enablement activities and ERP feature(s) deployment required to align with the logical maturity path.

The practical aspects of this model are (1) the roadmap must start where the customer is at in their business process maturity, (2) utilize an increment (agile) approach to build organization momentum, and (3) realize that organizational momentum will carry a customer through the radical changes required for maximizing ERP utilization.

Leveraging the CMMI model as an example of business process maturity, there are incremental organizational change required to process from one maturity level to the next level.  However, based upon my experience, there are two key paradigm shifts that must happen in the collective mind of the organization.  Consider the following illustration:Paradigm Shifts for ERP Utilization

Paradigm Shifts for ERP UtilizationKey Points and Observations:

  • Z represents the paradigm shift from a functional business function focus to a business process focus for organizational optimization.
  • Z’ represents the paradigm shift that competitive advantage only comes from revenue-generating business processes.  Organizations have a limited amount of resources and should prioritize business process maturity priorities accordingly.
  • By definition, organizational paradigm shifts required a Business Process Re-engineering (radical) effort.

Next, I will elaborate on why these paradigm shifts must happen within the CMMI maturity model.  Let us refer back to the specific level definitions within the CMMI model:CMMI Level Characteristics

CMMI Level CharacteristicsI conclude that a prerequisite for a business process to mature to a CMMI level 3 (Defined) requires the organization to acknowledge and manage across multiple functional areas (Z).  The ability to be more proactive requires a robust communication and coordination of business activities across multiple functional departments.  It signifies the first step of an organization to evolve from the traditional management philosophy of “division of labor”.

The next paradigm shift (Z’) requires the customer to understand that (1) some business process (es) are more important than others (i.e., revenue-generating vs revenue-supporting), and (2) an organization has only so many resources (constraint).  As we move forward in a hyper-competitive market environment, additional pressures will continue to minimize costs.  The model states that all business processes can mature to a CMMI level 5 but the cost realities suggests a greater focus on the competitive, revenue-generating business process (es).

Speaking from practical “hands-on” experience, if customers never breaks through these paradigms then the customer’s Cloud ERP experience will be frustrating rather than enabling.  There is no such thing as a “steady state” for Cloud ERP.  Either the customer is moving forward with deploying new ERP Cloud features or fixated on the limitations of their ERP Cloud services.

Summary

Even with a cloud delivery model, the key cost associated with ERP has not dramatically decreased.  The ratio of ERP software cost to ERP implementation cost has increased from 3:1 to 6:1.  It is only a matter of time before the ERP market forces ERP vendors to drastically reduce implementation costs while maintaining a sufficient level of customer enablement.  Given the rise and general adoption for Cloud ERP services, ERP utilization is becoming a more strategic competitive advantage for Cloud ERP vendors.  What I see as an emerging demand from the ERP market is a reliable, repeatable method for maximizing ERP utilization.  I have cast the first stone – let’s see what evolves from the ripples in the pond.

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200 Quotes for ERP Implementations

Brett's Hobby
My Little Hobby

Not sure if I’m wiser but as part of my knowledge sharing efforts, I would like to share 200+ quotes from over 50 books/resources that have influenced/guided my ERP journey.  Nothing beats “hands-on” experience but trust you may find some value.  These quotes are grouped into the following areas:

Slide1
FYI:  I’m working on gathering 200 quotes.  Not there yet but I’m still reading and exploring.  Education never ends.

Requirements Management

“For any organization there are just a few key processes that handle the core business.  All the other processes support the key processes on a certain aspect.” ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

“To maximize a revenue-supporting process is illogical as it will take effort away from revenue-generating business processes.” Bill Curtis.

“Rules always cost the business something.  This cost must be balanced against business risks.” Principles of the Business Rule Approach, Ronald Ross.

“Reduce complexity through standardization.” Lean Six Sigma for Service, Michael L. George.

“Organizations with broken systems typically suffer from broken business processes and vice versa.” Why New Systems Fail, Phil Simon.

“The cost of control obviously should not exceed the cost of inaccuracies.” ERP: Making It Happen, Thomas Wallace & Michael Kremzar.

“Testing is the only way to ensure that you have satisfied all of the requirements for accurate data.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

“Making the effort to understand your customer’s expectations can save a lot of friction and extra work.” Rapid Development, Steve McConnell.

“A key aspect of enriching mental models is bringing assumptions to light.  People’s assumptions are their blind spots.” Developing Knowledge-Based Client Relationships, Ross Dawson.

“Not all process-integration problems are technical and not all about IT.  Integrating computer systems is not the same as integrating the business.” Business Process Management – the Third wave, Howard Smith and Peter Fingar.

“Adaptive approaches are good when your requirements are uncertain or volatile.” Agile Project Management, Agile Software Development.

“A common mistake is to design and configure the system for only the first site and worry about the others later.” Control Your ERP Destiny, Steven Scott Phillips.

“The cost of complexity isn’t offset by what you can charge.  Complexity creates opportunities for you to fail your customer.” Gerand Arpey – President of American Airlines.

“Customers tend to interpret requirements broadly, and developers tend to interpret them narrowly.”, Rapid Development, Steve McConnell.

“The proposed process designs should always be designed within the logic of the ERP systems.” Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

“The ability to trace requirements flow from their source (originator), through the various project phases (design, prototyping, customizations, testing, piloting, and delivery) is a requirements generation best practice.” Directing the ERP Implementation, Michael Pelphrey.

“If you do not define the lowest level of detail required for reporting, you will not be able to design the transaction input to achieve that result.” ERP Implementation Best Practices Success And Cautionary Tales, Valerie Campbell CPA CGMA.

“When managers of a company select an ERP package to implement, they are “buying into” the ERP vendor’s view of a certain industry’s best practices and relying on the system to support their efforts to embrace these practices.” Modern ERP.  Marianne Bradford.

“Paralysis through analysis” is a futile attempt to develop the perfect solution.  Control Your ERP Destiny. Steven Scott Phillips.

“Iterations systematically reduce the trade space, grow the knowledge of the solution, and increase stakeholder buy-in.  At the same time, each iteration, or spiral, is planned to mitigate specific risks in the project.”  Evolutionary Process for Integrating COTS-Based Systems (EPIC), Carnegie Mellon – Software Engineering Institute.

“Requirements creep must first be differentiated from requirements evolution (elaboration).” Agile Project Management. Jim Highsmith.

“If you’re using a waterfall model, forgetting something can be a costly mistake.  You don’t find out until you get down to a system testing that one of the requirements was missing or wrong.” Rapid Development, Steve McConnell.

“The advantage of the incremental approach is that the company can get feedback on the implementation and how it is received and possibly fin tune the implementation strategy.” ERP Demystified, Alexis Leon.

“There is no direct relationship between a company size and the complexity of its (ERP) software requirements.”, Control Your ERP Destiny. Steven Scott Phillips.

“One of the advantages, but also criticisms, of ERP systems is that they impose a standardized way of conducting business processes.” , Modern ERP: Select, Implement, and Use Today’s Advanced Business Systems, Marianne Bradford.

“By focusing more on issues and problems and less on requirements, a smart consultant can identify design opportunities in ERP to reduce organizational waste.”, Selected Articles on Enterprise Resources Planning (ERP) – Vol 1, VK Ramaswamy.

Results-Oriented

 “How you gather, manage, and use information will determine whether you win or lose.” Bill Gates.

“Improvements in the use of the ERP system are an outcome of improvements in the process.”  ERP – The Implementation Cycle, Stephen Harwood.

“Be open to new ways to accomplish the same goal.” The Executive Guide to Implementing Accounting Software, Ken E. Sebahar.

“Competitive advantage comes not from systems, but from doing something better than competitors. “ Mission Critical – Realizing the Promise of Enterprise Systems, Thomas Davenport.

“Whilst technology is a great enabler, it is not a panacea in itself.” ERP – The Implementation Cycle, Stephen Harwood.

“Often the problem lies not with the ERP concept. But in the demand for quick fixes and rapid cures to underlying structural problems.” e-Business Roadmap for Success, Dr. Ravi Kalakota & Marcia Robinson.

“Using an ERP system simply to run things in the same way as before implementation is a guarantee of disappointment.” Enterprise Resource Planning (ERP) The Great Gamble, Ray Atkinson.

“The goal should not be to fail fast but to learn fast.” R “Ray” Wang: An interview by Bob Morris, Ray Wang.

“ERP is first an attitude; second, a process, and only third, a set of tools.” ERP Demystified, Alexis Leon.

“An information system only has value when people use it correctly.” ERP – The Implementation Cycle,, Stephen Harwood.

“A company may employ the most sophisticated software in the world, but unless information is managed, timely, accurate, and complete, the system serves little purpose.” ERP Lessons Learned – Structured Process, Wayne L. Staley.

“Benchmarking has its limits.” The Reengineering Handbook, Raymond L. Manganelli, Mark M. Klein.

“One dollar of prevention spent on fail proofing strategies can be worth several thousand dollars of expensive fixes and rehabilitation.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“The success of the Go Live day is measured by the lack of problems.” ERP – The Implementation Cycle, Stephen Harwood.

“One guiding tenet is every present: any change we administer should add more value, cost less, or deliver services more rapidly.” Transitioning the Enterprise to the Cloud, Ed Mahon, CIO at Kent State University.

“Optimizing individual function areas generally does not result in optimization of the whole process because, within departments, only individual activities are goal oriented.”  Business Process Oriented Implementation of Standard Software , Mathias Kirchmer.

“Utilize a “test first” approach.  Test scripts are written in advance of any configuration or development.” Secrets to a Successful COTS Implementation, Nick Berg.

“The first comprehensive picture of whether the accounting numbers balance and make sense will arise during the month end process.” ERP – The Implementation Cycle, Stephen Harwood.

“Users only care about their experiences.” Transitioning the Enterprise to the Cloud, Ed Mahon, CIO at Kent State University.

“Collectively employees do understand the processes, but individually, they do not.” Control Your ERP Destiny, Steven Scott Phillips.

Applying knowledge is the final step that makes the knowledge valuable. Developing Knowledge-Based Client Relationships, Ross Dawson.

“End results modeling and pilot room testing with the company can eliminate surprises and uncover almost all “invisible” ghosts in the closet”. ERP Readiness Checklist, Gerry Poe.

“In the absence of knowledge and ability you can expect lower utilization throughout the organization, incorrect usage of new processes and tools, a negative impact on customers and sustained reduction productivity.”  ADKAR – A Model for Change in Business, Government and Our Community.  Jeffrey M. Hiatt

“Content without the context of business process is meaningless.” Dennis Howlett.

“Reliability is results driven.  Repeatability is input driven.” Agile Project Management, Jim Highsmith.

Process thinking is a discipline. Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

“Are the business processes that will be automated clearly understood and documented?  An adage says, “If you don’t know where you’re going, any road will take you there.” The software equivalent is less positive “If you don’t know what it is you’re automating, no system will help””. Successful Packaged Software Implementation, Christine B. Tayntor.

“Decreasing variability early in the process has larger impact than decreasing variability late in the process.” Lean Software Development. Mary Poppendieck & Tom Poppendieck.

“The rule is efficiency never trumps effectiveness”. ERP Lessons Learned – Structured Process, Wayne L. Staley.

“Good design can’t fix broken business models.” Jeffrey Veen.

“All of the work that goes into development is not adding value until the software is in the hands of the customer.”  Lean Software Development, Mary Poppendieck & Tom Poppendieck.

“The way to reduce the impact of defects is to find them as soon as they occur.” Lean Software Development.  Mary Poppendieck & Tom Poppendieck.

“Optimizing a business function is futile and non-value-added if it is not part of a revenue/competitive business process.” Maximize Return on Investment Using ERP Applications. Worster, Weirick, Andera.

“Remember that if you fail to implement, who cares what the software (ERP) does?” Modern ERP, Marianna Bradford.

“Standardization is the key antidote to low productivity.” Lean Six Sigma for Service.  Michael L. George

“You give me good people and a great process, and we’ll beat any organization with the best technology but a poor process and under motivated people.” Information Week – Focus on the Process.  Doug Patterson, VP and CIO.

“The assumption is the thicker the report the greater the “due diligence”. This may actually be measuring waste, not actionable information.” ERP Information at the Speed of Reality: ERP Lessons Learned, Wayne L. Staley.

“If performance and up-time are the only metrics that you capture for your cloud customers, then you are missing the mark for customer business success. Performance and up-time are vendor-focused, not customer-focused.”, Brett Beaubouef.

“Every customer measures (ERP business) success differently.” Competing for Customers, Jeb Dastell, Amir Hartman, Craig LeGrande.

“(ERP) Marketing and sales teams still focus too much on hyping features and functions of products, and not enough on what customers want the products to deliver in terms of business outcomes.”,  Competing for Customers, Jeb Dastell, Amir Hartman, Craig LeGrande.

“The ability to succeed in the new subscription economy will depend on how well you sell and deliver measurable business outcomes to your customers.”, Competing for Customers, Jeb Dastell, Amir Hartman, Craig LeGrande.

Organizational Enablement

“Untrained (or under trained) users may end up needing three to six times as much support as end-users who have been trained.” ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

“Experience shows that the greater employee involvement in the change, the greater the positive response in understanding the compelling need for the change and the sharing of the vision.”Managing the Change Process, David K. Carr, Kelvin J. Hard, William J. Trahant. Coopers & Lybrand Center of Excellence for Change Management

“Prototyping and testing provides one of the highest forms of learning that ERP team participants can receive.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“An ERP system cannot be installed without the capability of an organization to change.”ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“People are one of the hidden costs of ERP implementation.  Without proper training, about 30 to 40 % of front-line workers will not be able to handle the demands of the new system.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

“The users of the ERP will be confronted with a huge amount of data; most of the data will have no relevancy to any decision that needs to be considered.”ERP: Tools, Techniques, and Applications, Carol Ptak, Eli Schragenheim.

“Operation and maintenance phase begins with a period of initial struggle until people become comfortable in their roles and tasks.  The duration of this stage depends on how effective the training was.” Enterprise Resource Planning, Alexis Leon.

“Old adage is true: the longer the work stays in process, the more it costs.” Lean Six Sigma for Service, Michael L. George.

“Every forward-thinking enterprise values productivity, which is one of the first things to suffer when technological systems are not end-user-friendly.”, Enterprise Resource Planning, Alexis Leon.

“When data cleansing or manual translations are required, end users should be part of the team.” Successful Packaged Software Implementation, Christine B. Tayntor.

 “Untrained users simply do not take advantage of the system for the intent that is was purchased.” Enterprise Resource Planning , Alexis Leon.

“Education may be viewed as understanding of concepts and practices. Training, however, if the application of education into day-to-day events.” Directing the ERP Implementation, Michael Pelphrey.

“Maintain the project team for at least 1 month after the go-live date.” Consider, Select & Implement an ERP system, O’Sullivan, Rico, Goldensohn.

“Manual input of data is the best possible training method.” The Executive Guide to Implementing Accounting Software, Ken E. Sebahar.

“People can’t be controlled like machines: Service processes are far more dependent on the interaction of people (both internal handoffs and working with customers) than are manufacturing processes.” Lean Six Sigma for Service, Michael L. George.

“Go at a pace that suits the organization’s readiness.” Lean Six Sigma for Service, Michael L. George.

“The logic is inexorable – the better the training, the faster you will see the business metrics move in the direction you are looking for.”  ERP Demystified. Alexis Leon.

“Without change, performance would never improve. Modern ERP.”  Marianne Bradford.

“Resistance, in many cases, is simply a sign of a lack of communication.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“How can one manage change if one does not understand exactly what is changing”. ADKAR – A Model for Change in Business, Government and Our Community, Jeffrey M. Hiatt.

“There are limits to how much change an organization and its end users can stomach at once.” Why New Systems Fail. Phil Simon.

“In an organization undergoing change, building a resilient work force by widely disseminating the change vision and strategy and by minimizing disruption is essential.” Managing the Change Process, David K. Carr, Kelvin J. Hard, William J. Trahant. Coopers & Lybrand Center of Excellence for Change Management.

“Train and then re-train: The best approach to training is to do it several times. Once is not enough. Three recommend points of training are follows are: On Design, Before test, Post go-live.” Top 5 Recommendations to Ensure Your ERP Implementation is Successful, Sandeep Walia.

“If you think education is expensive, try ignorance.” Derek Bok.

“Although consultants may participate in testing to some extent, employees should drive the majority of testing.  Doing so maximizes knowledge transfer and readies them for real life under the new system.” Why New Systems Fail. Phil Simon.

 “A common mistake made by many business leaders is to assume that by building awareness of the need for change they have also created desire.”  ADKAR – A Model for Change in Business, Government and Our Community,  Jeffrey M. Hiatt.

“Every organization that implements an ERP system is, in effect, reengineering.” Modern ERP, Marianne Bradford.

“A time-tested maxim in training is always to build on what you know.” Principles of the Business Rule Approach.  Ronald Ross.

“The development of knowledge is an iterative process, in which experience and lessons provide the basis for deeper understandings in ongoing feedback loops.” Developing Knowledge-Based Client Relationships, Ross Dawson.

“Nothing is more irritating than being forced to serve the system instead of the system serving the customer”, ERP Information at the Speed of Reality.  Wayne L Staley.

“Ollie Wight said it well: “Grease-gun education doesn’t work.” He was referring to the one-shot, quick-hit educational approaches tried so often without lasting results.”, ERP: Making It Happen: The Implementers’ Guide to Success with Enterprise Resource Planning, Thomas F. Wallace.

“Gartner Research recommends allocating 17 percent of the project’s budget for training. Those companies spending less than 13 percent on training are three times more likely to have problems.”, Concepts In Enterprise Resource Planning, Ellen Monk and Bret Wagner.

“A key point: Don’t train before you educate.  People need to know what and why before they’re taught how.  Education should occur either prior to, or simultaneously with the training.”,  Erp: Making It Happen; The Implementers’ Guide to Success with Enterprise Resource Planning, Thomas F. Wallace.

“Short-term ERP cloud adoption is corporate; long-term ERP cloud adoption is personal.” , Brett Beaubouef.

“The more they are satisfied with the system, the more they are engaged with it and the higher their level of assimilation. “(Wagner & Newell, 2007), Beyond ERP Implementation: An Integrative Framework for High Success, Kouki, Pellerin, Poulin.

“The impact of the human factor on the degree and effectiveness of ERP assimilation supersedes the technological factors.” Kouki, Pellerin, Poulin, Beyond ERP Implementation: An Integrative Framework for High Success.

Rapid Implementation

“In order to do rapid implementations, trade-offs must be made.” E-Business and ERP, Murrell G. Shields.

“Rapid Implementations: The data cleanup must start early in the project for the organization to be prepared for the data conversion.” E-Business and ERP, Murrell G. Shields.

“Rapid implementation cannot be done with a massive project team.” E-Business and ERP, Murrell G. Shields.

“Deliver sooner rather than later.  It is rare to get 100% support for any project; “fence sitters” will wait to see how things turn out before giving their support.” Modern ERP, Marianne Bradford.

“The training in a rapid implementation should be hands-on.” E-Business and ERP, Murrell G. Shields.

“The four key characteristics or enablers of knowledge transfer in communication are: (1) Interactivity, (2) Bandwidth, (3) Structure, (4) Reusability.” Developing Knowledge-Based Client Relationships, Ross Dawson.

“Good people can make a bad system work; bad people can’t make a good system work”.  The Reengineering Handbook. Raymond L. Manganelli, Mark M. Klein.

“The “Train the Trainer” Pitfall: It is not realistic to assume someone can be trained several weeks before the go-live and expect him/her to deliver quality training.” Control Your ERP Destiny.  Steven Scott Phillips.

Data Conversion

“If your existing data is inaccurate and unreliable a new software system will not fix that.” Consider, Select & Implement an ERP system. O’Sullivan, Rico, Goldensohn.

“In order to increase the chances that the conversion will go smoothly, do a dry run test of the conversion plan prior to the real go-live.” Control Your ERP Destiny. Steven Scott Phillips.

“When implementing a new ERP system you need to start data migration from the existing legacy business systems as soon as possible.” ERP Demystified. Alexis Leon.

“It is recognized that information accuracy is not a system problem, but rather a management problem.” Directing the ERP Implementation. Michael Pelphrey.

“Do it once, right at the source.”  Principles of the Business Rule Approach, Ronald Ross.

“The data migration phase of a project can consume up to 30% of the total project resources.  The most common flaw in data migration planning is that too few resources are invested in it.”  Top 10 Reasons Why Systems Projects Fail. Dr. Paul Dorsey.

“Extracting and cleansing the data from the existing system can be the single largest task in the project.” ERP Demystified.  Alexis Leon.

“Customers should be asked to net off the pending Credit Notes, Debit Notes and Advances against Invoices in both receivables and payables systems before providing the data for conversion into ERP.” Selected Articles on Enterprise Resources Planning (ERP) – Vol 1. VK Ramaswamy.

Evaluating Consulting Partners

“Consultants are there for guidance, but the final say regarding implementation should fail upon the management’s responsibility.” ERP 308 – Most Asked Questions, Leonard Frost.

“No implementation partner will have a complete appreciation of the customer’s business solution until the customer makes the investment to perform knowledge transfer with the implementation partner.” Max Your Investment: 10 Key Strategies for ERP/COTs Success, Brett Beaubouef.

“There is a misguided belief that experienced consultants face no learning curves with the software.”  Control Your ERP Destiny.  Steven Scott Phillips.

“Competent ERP implementation partners should be able to provide industry and configuration best practices day one.”  Max Your Investment: 10 Key Strategies for ERP/COTs Success. Brett Beaubouef.

“The more the consultants know about the company the better they will be equipped to provide good advice.”  ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“Bait and switch.  This is the practice of displaying certain consultants, during the sales process, to show the sales company understands business and the ERP implementation process to ensure a successful outcome.” Enterprise Resource Planning (ERP) The Great Gamble, Ray Atkinson.

“Have successful project managers who are capable of anticipating what can go wrong.” ERP Demystified, Alexis Leon.

“No company, no manager is sufficiently brilliant to think about all of the complexities and complications inherent in a cross-functional ERP project.” Mission Critical – Realizing the Promise of Enterprise Systems, Thomas Davenport.

“Overspend on consultancy is often compensated for by a cut-back in training.  This is not helped by the fact that training costs tend to be under-estimated in the first place.” ERP – The Implementation Cycle, Stephen Harwood.

“The less you know the more money they (consultants) make.” Control Your ERP Destiny, Steven Scott Phillips.

“Where knowledge transfer is a key objective, project handover should be formalized, rather than just letting the engagement end.” Developing Knowledge-Based Client Relationships, Ross Dawson.

“Process is not a substitute for skill.” Agile Project Management, Jim Highsmith.

“Selecting the consultants (and an implementation methodology) is as important as selecting the (ERP) package.” ERP Demystified. Alexis Leon.

“There is often a level of arrogance in ERP consultants who are taken with replacing existing systems, a level of arrogance that is generally counter-productive.”  Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

“It is better to know all the questions than some of the answers.”  James Thurber.

“There is no such thing as an easy implementation of an ERP project.” Enterprise Resource Planning (ERP) the Great Gamble. Ray Atkinson.

“Discipline creates well-organized memories, history, and experience.” Balancing Agility and Discipline. Barry Boehm, Richard Turner.

“(ERP) Service organizations are essentially big “people machines”, where having a high level of turnover is just as deadly as if a manufacturer was constantly asked to change machine parts.” Lean Six Sigma for Service. Michael L. George.

“Implementation audits are necessary to keep the project on track.  Audits should be conducted to compare project results, business objectives, systems objectives, and project objectives.” Directing the ERP Implementation. Michael Pelphrey.

“Claims of ‘proven paths’, ‘best practices’, and simplistic implementations methodologies, that fail litter the ERP landscape as each software company seeks to gain some form of advantage over its rivals. “Enterprise Resource Planning (ERP) the Great Gamble. Ray Atkinson.

Creating documentation is far easier than generating decisions.  Producing a great volume of documentation does not result in producing a great amount of knowledge.” Max Your Investment: 10 Key Strategies for ERP/COTs Success, Brett Beaubouef.

ERP Innovation

“Machine learning is a logical progression, not a human inspiration.” Brett Beaubouef.

“Roles are finite.  People are infinite.” Agile Project Management, Jim Highsmith.

“Knowledge often emerges from the collaboration of people with very different ways of looking at their field.”  Developing Knowledge-Based Client Relationships, Ross Dawson

“As the level of control increases, the level of innovation decreases.” Max Your Investment: 10 Key Strategies for ERP/COTs  Success, Brett Beaubouef.

“Interaction drives innovation.  Innovation emerges from the interaction of diverse individuals.” Agile Project Management, Jim Highsmith

 “Digital Darwinism is unkind to those who wait.” R “Ray” Wang: An interview by Bob Morris, Bob Morris

“What businesses need is not a one-time fix for individual processes but an environment that combines business and technical systems to produce processes that flex and recombine as required by changes in the market.” Business Process Management – the third wave, Howard Smith and Peter Fingar.

ERP Project Success

“A real configuration of an ERP system can only happen when there is real data in the system.”  Enterprise Resource Planning “Alexis Leon.

“Control is not a cost effective substitute for education.” Brett Beaubouef.

“As Tom DeMarco and Tim Lister (2003) so pithily state, “If a project has no risks, don’t do it.” Risk is an essential characteristic of innovation”.”, Agile Project Management, Jim Highsmith.

“Cost overruns are manageable if the project will achieve worthwhile benefits; however, failing to satisfy business goals is always unacceptable.” Principles of the Business Rule Approach, Ronald Ross.

“Customers like rapid delivery.  Rapid delivery means companies can deliver faster than customers can change their minds.”  Lean Software Development, Mary Poppendieck & Tom Poppendieck.

“Lack of alignment of ERP system and business processes is a major issue in the implementation of ERP.” ERP Implementation Challenges & Critical Organization Success Factors, Rajeshwar Vayyavur.

“A hybrid (cloud) model will add complexity”.  Transitioning the Enterprise to the Cloud, Ed Mahon.

“It is important to recognize how fast ERP team members, and organizations, can acquire new knowledge.” ERP A-Z: Implementer’s Guide for Success, Travis Anderegg.

“You can have a cheap, fast or quality implementation, but you only get two”. How to select your ERP without losing your mind, Andy Pratico.

“Understand the implications of the decisions you make.” Rapid Development , Steve McConnell.

“Industry leaders have not effectively defined the set of business skills that should be included in any ERP consultant’s educational process.” Maximize Return on Investment Using ERP Applications, Worster, Weirick, Andera.

“One of the biggest mistakes during ERP projects is not taking the time to build a common understanding of how business is conducted today and potential improvement opportunities.” Control Your ERP Destiny,  Steven Scott Phillips.

“If the project becomes all things to all people, it will fail to meet anyone’s expectations.” Control Your ERP Destiny, Steven Scott Phillips.

“A consultant with software knowledge is one thing, but if the consultant is a poor communicator, it undermines the transfer of knowledge.”  Control Your ERP Destiny, Steven Scott Phillips.

“Job 1 is to run the business.  Very close to that in importance should be implementing ERP.” ERP: Making It Happen, Thomas Wallace & Michael Kremzar.

“A methodology will help ward off risk, but a contingency plan is still absolutely necessary.” ERP Demystified, Alexis Leon.

“The lesson here is that organizations will encounter great peril when the system they seek to install does not fit their culture.” Mission Critical – Realizing the Promise of Enterprise Systems, Thomas Davenport.

“ERP Success: Know what features and objectives will NOT be included in the project.” The Executive Guide to Implementing Accounting Software, Ken E. Sebahar.

“Regarding methodologies, there is nothing new under the sun.  Every methodology is based upon a set of rules, environmental conditions and assumptions.  All have strengths and challenges that must be addressed for success.” Max Your Investment: 10 Key Strategies for ERP/COTs  Success.  Brett Beaubouef.

“Due diligence may feel like a waste of time and money, but weighed against the high cost of failure, it is imperative.” ERP Information at the Speed of Reality, Wayne L Staley.

“There must be awareness throughout the organization of the importance of scope management.” E-Business and ERP  , Murrell G. Shields.

“The longer the timeframe and the further apart the milestones in a project, the harder it is to create a sense of urgency.” E-Business and ERP, Murrell G. Shields.

“Plans are worthless, but planning is everything.” General Dwight Eisenhower.

“Deferring decision(s) will cause significant risks to the (ERP) project success.”  Directing the ERP Implementation, Michael Pelphrey.

“Many of the major decisions and actions that ultimately determine whether a project is a success or a failure occur very early in the life of the project.” E-Business and ERP  , Murrell G. Shields.

“The best people for the project are likely to be those who have the least free time, since they are already in key positions.” ERP – The Implementation Cycle, Stephen Harwood.

“Success is not to be found in excellent project management alone. ADKAR – A Model for Change in Business, Government and Our Community, Jeffrey M. Hiatt.

“There are literally thousands of decisions that must be made on these projects.  The project team must be empowered to make most of them.  That is one reason organizations must put their best people on these teams.” E-Business and ERP  ,Murrell G. Shields.

“The rumor mill and grapevine are active in most companies, and it is in the project team’s best interests to preempt them by providing clear, consistent, targeted, and ongoing communications.”  Successful Packaged Software Implementation, Christine B. Tayntor.

“But technology is not reengineering.  Reengineering changes the business processes – the way the work is done.”  The Reengineering Handbook, Raymond L. Manganelli, Mark M. Klein.

“Projects that skimp on upstream activities typically have to do the same work downstream at anywhere from 10 to 100 times the cost of doing it properly in the first place.” (Fagan 1976; Boehm and Papaccio 1988).  Rapid Development, Steve McConnell.

“The success or failure of a new system hinges directly on the acceptance of that system by the organization’s end users.” Why New Systems Fail, Phil Simon.

“The goal of an integrated enterprise is to reduce information float, that is, the time between when data is captured in one place in the system and when it becomes available and usable.  e-Business Roadmap for Success.  Dr. Ravi Kalakota & Marcia Robinson.

Chris Koch of CIO.com writes, “Blank sheet reengineering can lead to unrealistic business process designs that can’t be implemented through enterprise software.”.

“A major cause of this difficulty (failures) is that organizations building these systems tend either to assume that components can be simply thrown together or they fall back on the traditional engineering skills and processes with which they are familiar-skills and processes that have been shown not to work in the building of COTS- based (ERP) system.” Evolutionary Process for Integrating COTS-Based Systems (EPIC) Carnegie Mellon – Software Engineering Institute.

“Agile methods universally need close relationships with the customer and users of the systems under development.”  Balancing Agility and Discipline. Barry Boehm, Richard Turner.

“The truth is, no organization plans to fail – rather, they fail to plan…” Control Your ERP Destiny, Steven Scott Phillips.

“Two overriding criteria that mast be present if the implementation of a COTS solution are to be successful: realistic expectations and organizational flexibility.” Successful Packaged Software Implementation. Christine B. Tayntor.

“Planning can become mechanistic and succumb to a checklist mentality.” Balancing Agility and Discipline.  Barry Boehm, Richard Turner.

“The longer a team, large or small, goes without delivering an integrated product to a review process, the greater the potential for failure.” Agile Project Management. Jim Highsmith.

“Inclusion of end users promotes acceptance of the solution and helps break down “us versus them” barriers.  Working together, the two groups will provide a balanced evaluation.”  Successful Packaged Software Implementation, Christine B. Tayntor.

“It is only prudent to allow for some slippage in time and budget, and not to count on full project functionality until after testing and installation are complete.” Managerial Issues of Enterprise Resource Planning Systems, David L. Olson.

“The highest probability of successful implementations of ERP software is when there is only a minimal need to change business processes and ERP software.” Enterprise Resource Planning Systems: Systems, Life Cycle, Electronic Commerce, and Risk,  Daniel E. O’Leary.

“Bad processes (and systems) beat up good people.”, Consider, Select & Implement an ERP system, Dr. Jill O’Sullivan, John Rico, Dennis Goldensohn.

“Effectively managed implementations are deliverable driven.”, E-Business and ERP: Rapid Implementation and Project Planning. Murrell G. Shields.

“Change control is about coordination, not denial.”, Agile Project Management. Jim Highsmith.

“For an ERP implementation to go smoothly and provide value, it is critical that a company understand both its current processes and the state of the process after implementation.” Concepts in Enterprise Resource Planning, by Ellen Monk, Bret Wagner.

“No ERP methodology is a substitute for thinking.”, Brett Beaubouef.

“Making partners of customers means they become more likely to understand technical constraints. You start to get rid of the “I need it all now” phenomenon, and customers begin cooperating to find realistic, mutually satisfying technical solutions.” Rapid Development, Steve McConnell.

“The timelier the validation, the better.”, Directing the ERP Implementation, Michael Pelphrey.

ERP  Utilization

“ERP systems will not exhibit their full potential unless they are properly integrated with other enterprise software applications.”  ERP Demystified. Alexis Leon.

“ERP is a philosophy for operating a business model.  If your company does not want to adapt to this philosophy, save yourself the headache and don’t pursue ERP.” Directing the ERP Implementation. Michael Pelphrey

“Implementing the ERP system and realizing the promised benefits are two different ball games. Implementation can be a success, but if the operational phase is not planned and organized properly with the support of all the people involved, then the promised benefits will not materialize.”  ERP Demystified.  Alexis Leon.

 “Achieving early wins and optimizing user buy-in can pave the way for controlling both political and fiscal costs down the road and increase the chances of delivery project on time and on budget.” Total Cost of Ownership: A strategic tool for ERP planning and implementation. Richard West, Stephen L. Daigle – California State University.

“A good system will shine light into dark corners.” Making ERP Work. Sam Graham.

“A major overhead in operating ERP systems is entering transactions. Transactions take time, cost money and introduce the possibility of errors.” Making ERP Work. Sam Graham.

“One of the unseen inhibitors to ERP utilization is that ERP software assumes that there are no departmental or process conflicts existing with the customer.  All are aligned and in harmony with each other.”  Maximize Your Investment: 10 Key Strategies for Effective Packaged Software Implementations.  Brett Beaubouef.

“Perfectly designed automation will only work as well as it is adopted by the people who use it.”  Leah Allen.

ERP Project 101: Organizational Fit Gap

I think we can all agree that organizational fit is a key consideration for successful ERP selections and implementations.  However, mention the phase “fit/gap” or “gap analysis” and most people will fixate on the ERP software.  There are several examples of functional/software fit-gap templates/activities but very few organizational fit-gap templates/guides.  The goal of this blog is to shed some light on this very important activity.

 What is an Organizational Fit/Gap?

An organizational fit/gap analysis is a comparison of the customer’s existing organizational model that supports the business to the defined organizational model supported (or assumed) by the ERP system.  Consider the following illustration: 

Org Gap Analysis

Organizational Fit Gap Analysis

If you do not know what is changing in the organization then how can you manage organizational change?  Too often I see ERP projects only focus on the “To Be” model and expect business users to figure out how to transition. I have also observed that customers see organizational change activities as an opportunity to reduce implementation costs by performing the activity themselves – regardless of their capabilities. 

In order to effectively conduct an organizational fit/gap analysis there are two key sources of information that are required: 

Information   Source Comments
Customer’s Organizational Structure and Business   Processes A   majority of peers and customers believe that this exercise is a non-value-add activity given the imminent organizational change that will occur as part of   the ERP implementation.
ERP Business Process Maps Consider   ERP business process maps as a demonstration by the ERP vendor to show how   their ERP software supports business processes.

Just as you perform a formal Fit/Gap analysis on ERP functionality you should also consider performing a formal organization Fit/Gap analysis as illustrated below:

Organizational Gap Analysis for ERP

Template to identify possible organizational changes based upon predefined ERP roles/responsibilities

An organizational fit/gap analysis should be performed during the ERP selection stage and refined during the early design stages of the ERP implementation.  Do not limit yourself to performing this exercise only once.  The analysis performed during an organizational Fit/Gap will drive future decisions and implementation activities.

What Activities should an Organizational Fit/Gap Influence?

The organization fit/gap analysis will have a direct impact on your organization change management plan and communication plan.  In addition, this analysis will provide insight into user security requirements.  Utilizing this approach will highlight how well the predefined ERP user security profile(s) align to the organization’s existing users.  As a general rule, the majority of predefined ERP workflows are based upon predefined user security roles; therefore keep in mind that ERP user security profile changes may require additional testing for related ERP workflows. 

Why Do We Need a Formal Organizational Fit/Gap?

Conducting a formal organizational fit/gap enables you to quantify the level of change.  Instead of taking a broad stroke at managing change you can provide a focused effort to accomplishing your objective. Remember that people are the most important component of a business solution.  Given the importance I believe that formalizing this activity is worth the investment.

Summary

Predefined ERP implementation tools, templates, roles can provide limited value to an implementation.  Too often the ERP market wrongly perceives that these predefined components result in faster implementations.  This misconception is most pronounced in the ERP SaaS/Cloud arena.  At the end of the day, an ERP implementation should only move as fast as the customer can handle the change.  Conducting a formal organizational fit/gap can enable the customer to adapt faster by focusing on the specific changes required for success.

Building a Better ERP Estimate

There are several documented examples of ERP implementations that went over budget or did not hit the original go-live date.  There are also many explanations out there to explain why these ERP implementations did not meet budget or timeline.  Instead of repeating common information out in the ERP blogosphere, I would like to speak to a root cause that is typically overlooked by our industry – inaccurate ERP implementation estimations.   In the next sections we will take a closer look at building a better ERP estimate.

Rule #1 – Have the right type of information to calculate an ERP Estimate

Developing a competent estimate for an ERP implementation or major customization can be a challenge for both seasoned consulting partners and a new ERP customer.   In a previous life I developed ERP implementation estimators for one of Tier-1 ERP software vendors.  I also developed both Time & Materials as well as Fixed-Price ERP implementation estimates – some good, some not so good.

Simply stated – an ERP implementation estimate is based upon your current understanding of the following areas:

Information Drivers for ERP Implementation Estimates

Information Drivers for ERP Implementation Estimates

 Let’s focus on some specific areas that are typically overlooked or under appreciated. 

Area Description
Customer Participation Implementation partners are generally good about estimating their level of effort to support ERP implementations but fall far short in estimating the effort for the customer.    In the majority of ERP implementations, customer must make available their best and brightest resources to support the implementation.  Odds are that these resources play a major role in current operations.  The ERP estimate should include any need to backfill existing business resources.
Project Scope Project scope refers to the implementation activities that need to be performed and who is responsible for performing the task(s).  Unfortunately, customers see this as an area to reduce implementation costs by taking on activities that they do not have the skills/resource availability to complete (ex. Organization Change Management).  People make ERP successful.
Product Scope Too often business processes and product scope is defined only at the product level (example: we are implementing the ERP’s Purchasing module).  How can I tell what business activities and features are out of scope?  Developing focus is much harder to develop and maintain. 
Implementation Partner Constraints  Every implementation partner has constraints!  It is a just a reality that should be factored into any ERP estimate.  For example, how much lead time should be given for an Implementation partner to replace a consultant?

You can never hope to create a realistic estimate without having valid information on the drivers that influence scope, schedule, and resources.  The next step is to understand your level of comprehension of the information that drives the ERP estimate. 

 Rule #2 – Understand the type of ERP Estimate you are calculating

Per the Project Management Institute’s Body of Knowledge (PMBOK) there are three types of estimates for a project.  These estimates are based upon your level of understanding for project scope, constraints, and assumptions.

Levels of ERP Estimate Accuracies

How Understanding Drives Estimate Accuracy

Simply stated – the more you know about the task(s) at hand the greater the probability of calculating a realistic estimate!  The trouble is that too many ERP implementations do not generate a definitive estimate.   A majority of implementation partners generate estimates during the sales cycle where estimates may approach a budgetary accuracy – at best.  To compensate for the estimation accuracy (-10% to 25%)  many implementation partners incorrectly utilize contingency reserves and management reserves to plug the potential estimate gap.   This is just a bad estimating practice which will most likely result in budget challenges further down in the implementation.  Fortunately, there are steps we can take to develop better ERP estimates.

Rule #3 – Drive to validate and refine your ERP estimate

Estimates can and should change as you learn more about the project.  However, there is an expectation out there that estimates should be defined once and they should be completely accurate.  Here is where I see the process break down.  Once an Implementation partner communicates an estimate too often the customer will latch and consider it an iron-clad promise.  The key driver for this phenomenon has more to do with the Implementation partner setting the wrong expectation when an estimate is communicated.   Customers encourage this behavior by focusing on cost as the key competitive differentiator.  Also, there is a perception in the market that if an implementation partner cannot provide a single estimate then the Implementation partner does not have the experience.  Customers, this may be the case but do not blindly jump to that conclusion.

Best Practices for obtaining ERP Estimates from your Implementation partner

Over the years I have been asked by customers what is the best approach to get a reliable, cost-effective estimate from Implementation Partners.  When should a customer request a fixed price estimate versus a time & materials estimate?  Following are some general guidelines I would like to communicate based upon my experience:

  • Fixed Price versus Time & Materials: Have the Implementation partner provide a Time & Materials estimate for project planning, requirements gathering, and fit/gap.  Once the Fit/Gap is performed you should know exactly what you are up against and then ask for a competitive bid/fixed price estimate to complete the remaining work.
  • Complete Information:  Always ask the Implementation Partner to provide an estimate with the following information
    • Product Scope
    • Project Scope
    • Assumptions
    • Constraints
    • FTE Hour Requirements for both the Implementation Partner and customer resources
    • Estimate accuracy – let customers know up-front that the estimate will change
  • Quantify Reserves: Ask the implementation partner if the estimate contains either a contingency or management reserve.  If so then ask what % of the total estimate is for reserves.  If this % is greater than 10% then this is a sign that the Implementation partner did not gather enough information to generate a realistic estimate.  If the implementation partner does not calculate a reserve then consider this estimate suspect (red flag).
  • Knowledge Transfer:  Just as important it is for an Implementation partner to perform knowledge transfer to enable customer resources to support ERP, it’s as important for the customer to educate the Implementation partner on the unique aspects of their business model.  The better the understanding the better the estimate.

Summary 

There are many of my peers who would consider ERP estimation more of an art than a science.  In my humble opinion, this is a bad philosophy that either results in generating an unrealistic estimate or the customer spending more money than is required.   Customers should also be realistic and understand that estimates created in the early stages of an ERP implementation will change and focus on making the right decisions for mutual success.  Level of effort estimations for ERP implementations are based upon the current understanding of the ERP implementation.  Some ERP estimates are easier to calculate given a predefined implementation scope, however, there will always factors unique to a customer that must be explored, defined, and refined during key milestone implementation activities.

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