InformationWeek
Defining The Business Value Of Technology
August 2, 1999
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When Micros implemented its Oracle ERP package, it tapped a committee of business and IT executives that essentially decided the application's requirements without input from the people who would be using it. "We did it in dictator fashion," admits CIO Moon. When the system went live, it caused anger and confusion with employees who didn't understand why some processes had changed or why the application couldn't perform functions they were used to.
For its CRM project, Moon says, Micros is "a little more mature" and is gathering input from users. Not surprisingly, those users "pretty much know what they're talking about," he says. The company is also taking pains to point out the software's limitations, and is giving tips on how to work effectively with the system. Moon recommends involving the CFO and chief operating officer early, too, so they aren't surprised if the multimillion-dollar system doesn't look exactly as expected.
It's critical that IT and business work together on projects so that business needs are reflected in the application. However, if handled poorly, this can lead to difficulties of its own. In Hasbro's case, the business units were nominally involved, but as the project progressed, they stopped paying attention to it. "The business units bailed on us," says Marcolini. "It became an IT initiative." The result: When the SAP suite went live a year ago, it had wide functionality gaps because there was no business input. The timing was particularly bad because Hasbro sells the bulk of its toys in the second half of the year.
Where the company went wrong, he says, was in assigning businesspeople to the project but not releasing them from their obligations in their regular positions. When their administrative jobs got too demanding, the ERP commitment was the first thing to go. Marcolini also says Hasbro's co-project manager approach--using a manager from both IT and business--didn't work because it made it difficult to form a clear strategy. "You need one person in control," he says. They've solved both problems for CRM, he says, by putting one person from the business side in charge of the CRM project.
Regardless of who businesses assign to manage implementations, they've learned that it's critical to train people to handle the new system. "You don't necessarily need formal training mechanisms, but you need to spend time training," Marcolini says. Without training, the implementation will take longer and users will be slower to adopt it, he says.
More challenging for the new wave of applications is the fact that, while financial and manufacturing users tended to understand the benefits of ERP, salespeople and customer representatives often view CRM as nothing more than data entry. To support its implementation of customer-relationship management applications, CCC Information Services has hired professional communicators who educate employees on the application and help them make the transition to the new way of thinking.
IT departments putting in supply-chain and front-office apps still expect long, painful implementations. But businesses that take to heart the lessons learned from ERP should be able to lessen the pain.
People Power
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Enterprise apps involve people throughout a company, and the long list of troubled or failed ERP implementations attests to the effects of neglecting people issues. IT departments have learned from ERP implementations to communicate better with users, to pick and train employees more carefully, and to work more closely with business managers.
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