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ERP Implementation: The Innovation Dimension

ERP Implementation: Technology, Change or Innovation Project?

When you examine the methodologies being used for implementing ERP systems, it makes you wonder whether these complex, costly and resource consuming projects are being framed correctly for success. Microsoft’s Sure Step for example, primarily frames the project as a technology/software delivery project. Another popular framing of ERP implementation is as a change management project that focuses on organizational risks and impacts. These are both valid – there is clearly a technology dimension and a change dimension to every ERP implementation. But another way to frame ERP implementation projects is as a kind of ‘startup’ project, which requires recognition of an innovation dimension.

In the introduction to their book Lean Innovation, Sonnenberg and Sehested emphasize the guiding principle of ‘lean’, namely the elimination of waste or non value-adding processes and go on to say:

At the beginning of an innovation process, the knowledge you have about the problem you are trying to solve is usually limited. Through the process, you learn more about the problem and its possible solutions. And based on this knowledge you choose between different possible solutions. This makes innovation a learning and prioritization process.

This is a pretty good description of the start point of an ERP implementation project and the way it proceeds from there. Something that suggests that approaching an ERP implementation project as a ‘learning and prioritization’ process may be a useful perspective to consider.

Many ERP implementation methodologies seem to assume that it’s practical to go from zero (limited solution knowledge) to hero (an optimized, deployed solution) in one, almighty, step. Analyze what’s needed, design and develop a solution, and then deploy it. The reality is often somewhat different.

Usually the project meanders a little, or a lot, on the journey from zero to hero - if in fact it ever achieves that transformative arc. So perhaps it would be better to try to acknowledge this and structure that meandering more effectively by adopting a little of the advice of Eric Reis in The Lean Startup - specifically the concept of Minimum Viable Product (MVP) and the Build-Measure-Learn (BML) loop.

In the spirit of the MVP and BML, I suggest that an innovation-framed ERP implementation project is instead structured around three main delivery phases:

  1. The Minimum Viable Solution (MVS)
  2. The Incremental Viable Solution (IVS)
  3. The Disruptive Viable Solution (DVS)

The use of standard innovation terms - ‘incremental;’ and ‘disruptive’ - is deliberate but not vital to this argument. The point is that 3 consecutive BML loops are utilized to structure the project. Think of these solutions as a functional version of the technical DEV, TEST and LIVE environments that characterize many enterprise ERP deployments from an IT perspective.

Also, you might think that the word ‘viable’ is superfluous: Why not just minimum, incremental and disruptive solutions? The reason is that ‘viable’ adds that essential contextual factor to a project i.e. to force you and your partners to think about what is viable given your resources, timescale, budget etc. A one-size methodology seldom fits all.

So what are these solutions?
The Minimum Viable Solution (MVS) is exactly what it says: The minimum solution to allow you to continue to run the business but without achieving anything much in the way of benefits from your shiny new ERP system. The MVS is clearly not the endgame but a play to achieve an initial win, a base on which to build. So the purpose of the MVS is to act as the essential initial platform from which to measure and learn and to start to gain traction for the ERP system in the business. Some might argue the MVS is nothing more than an old-fashioned conference room pilot (CRP). But the difference is in the intention. A CRP is usually positioned as a throwaway test platform. An MVS is intended to be the start point of a series of BML loops.

The Incremental Viable Solution (IVS) can only be built once the measure and learn activities from the MVS have been stage-gated. As many others have pointed out, most innovation is not truly innovative per se but consists of incremental improvements to an existing product or service. The MVS, subject to its own BML loop, is the platform for identifying and introducing the incremental changes that begin to realize some benefits from the system, functioning as a kind of mid-point deliverable.

Similarly, the Disruptive Viable Solution (DVS) can only be built once the measure and learn activities from the IVS have been stage-gated. The disruptive solution is disruptive in that its intention is to set out to disrupt the business-as-usual of the business by introducing radical new ways of doing things that will definitely need to employ robust change management strategies to succeed in delivering benefit. The DVS is the ‘optimized’ solution, the rainbow that follows the storm. And it is the migration from MVS to IVS to DVS that better prepares participants for serious organizational change by staging the impact in well-defined phases while helping to limit organizational risk through the application of rigorous BML loops.

By recognizing that your ERP implementation project has an innovation dimension, as well as technology and change dimensions, you may help to prevent the kind of project ‘derailment’ that inevitably comes from trying to bite off more than your organization can viably chew.

More Stories By Stewart McKie

Stewart McKie has 25 years of IT industry experience. His education includes a MSc in Organization Consulting and a MA in Screenwriting. I was the Technology Editor of Business Finance magazine during 1995-2000 and also wrote regular features for Intelligent Enterprise magazine. I am the author of six books on accounting software and over 50 technology white papers. My current focus is my screenwriting 2.0 app called Scenepad and my supply-chain auditing app. I have managed many ERP selections and implementations of SunSystems all over the world. Currently I am engaged as the Implementation Oversight consultant for a global AX2009 rollout for a manufacturing client and as the selection consultant for pan-European ERP solution.

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