Here’s what you should know before a major software rollout

DENVER — Hershey’s, Nike, Waste Management, MillerCoors: All giant, billion-dollar companies that made one major misstep. They botched the rollout of their enterprise software.

Enterprise Resource Planning software, or ERP software, is the backbone of running a large business: It’s the integration and tracking of various applications such as payroll, purchase orders, production capacity, etc. Without software to track all of those data sets and bring them together cohesively and smoothly across departments and thousands of employees, a business can collapse.

And some major companies nearly did when the implementation of new ERP software failed. Hershey’s had a plagued rollout of new software right before the Halloween candy season. Waste Management had enough trouble with their software vendor and consultants that they ultimately settled a lawsuit with them.

But the rollout of new ERP software can go smoothly and successfully, when enough planning and preparation is done ahead of time. That was the message of the ERP Digital Stratosphere Conference, hosted by Third State Consulting Group, which aimed to teach business leaders how to avoid the mistakes of some corporate giants.

There are several repeating challenges companies experience when trying to implement new ERP software, said Marcus Harris, a partner at the law firm Taft Stettinius & Hollister with 18 years experience in ERP transactions and litigation. Those challenges include the process taking longer or it costing more than expected, the business benefits not being realized after implementation or the process disrupting operations.

“In 2017, a survey found that 25 percent of respondents said their ERP implementation was a failure,” Harris said. Nearly 75 percent of all implementations are over budget, and 59 percent exceeded the scope and time estimates, according to the survey, which was conducted by Third Stage Consulting Group. What is more, 37 percent of companies said they failed to fully realize the return on investment they expected.

Success is not due to luck, said Eric Kimberling, CEO and founder of Third Stage. It comes from careful planning and preparation before vendor selection and implementation begins.

“This is your project, so you’ve got to know what is going on and own it,” Kimberling said. “Bring in the right resources.”

The key is to start with a clear digital strategy, he said. That includes letting your business drive the technology, not the other way around. Just because something is the latest and greatest doesn’t mean it’s right for your business. One of the best things to do is sit down and do an audit of your business and prioritize what it is your looking for, said Adam Cheatham, manager at Third Stage. Analyze your pain points, how you currently manage your business processes and where you would like to see your company in the future. That will help you select software that doesn’t just work for you today but can work for you as you grow.

Another thing to remember, Kimberling said, is that no silver bullet exists when it comes to selecting the right software. Not only is it impossible to find the perfect software, but companies also should be wary of any vendor that promises its software is flawless and a perfect fit.

“Beware of industry hype,” he said.

Perhaps most important, Kimberling said, when companies are planning and preparing to switch their ERP software, they should remember the people who are using it and prep them for organizational change.

“The people component is the most important,” he said. “I’ve never heard a CEO say they wish they invested less in change management and more in tech. The problem is recognizing you need change management. You can’t see it or touch it or feel it until it’s too late and then you feel the pain.”

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