Every year dozens of businesses implement a new ERP-system. "Still accompanied by the necessary issues and problems," says René Ceelen, CEO and owner of TestMonitor and CEPO. René is conducting research for several years now at the Radboud University of Nijmegen on IT quality from a business perspective. He did research on the relationship between IT-related and organizational or business problems during these implementations. This shows that the amount of business related issues per section has tripled in the past year. CorporatieMedia (a Dutch company) delved deep into the data and asked some questions to the researcher.
For the research we used data from 35 ERP implementations and upgrades in 2015, that during which the implementation used the online testmanagement software TestMonitor. The data of this is compared with 30 implementations and upgrades from 2014.
What immediately is noticeable is the increase in issues: 3433 in 2014 – on average 114 per project – against 9813 a year later – average 280 issues per project. “We viewed the processes of different ERP-suppliers,” explains René, whom collaborated with Hans-Paul Lips, consultant at CEPO, during the research. “Common issues are particularly found in the underdeveloped software, which causes discussions about what does and doesn’t belong in the standards. In addition, many corporations plan to go ‘standard’, but they still want to discuss many points. In which during the process they notice that the system works differently than expected”
The large increase in issues per project – an increase of 145 percent – is due to four points according to René. “Firstly, there are new laws and legislations, whereby there is a need to make complex adjustments in the systems with high risk of regression. Additionally ERP-systems devour competitive applications such as customer portals, service portals, DMS and mobility apps. The expansion of these ERP-suites aren’t mature enough to fully support and integrate these suites.”
“Thirdly, platforms – such as AX and NAV – renew at a fast pace, causing suppliers to constantly perform software adjustments. Finally, businesses should be accountable externally, and demonstrate their personal measure to quality. Therefore, the organization is stricter towards themselves, resulting in more issues.”
Although the percentage of IT issues is decreased in all implementations, the amount of technical problems per process has increased. In 2014 an ERP implementation had on average 62 IT issues, while the same project one year later, had a stunning 101 problems. The major culprit here continues to be software errors, which in 28 percent of cases were the cause of a problem.
Something striking in the list of IT problems on number two is: output, with 20 percent. “Every business sends – physical and/or digital – dozens of letters, ranging from termination of lease to settlement fees. The problems are mainly found in the custom templates. A template is filled with data imported into the ERP system from a sheet. The correct filling of such a template often still goes wrong. A business can implement new software to speed up and simplify the work, if the letter isn’t well the clients and corporations take notice immediately.”
19 percent of the problems during the process are caused by the conversion of data from the old system. “This isn’t just a IT issue, but is commonly caused by the mismatch of expectations. Often there hasn’t been looked at the data critically until the moment that it’s going to be converted. A simple example is telephone numbers. If a source system lets you add phone numbers unrestricted but a target system doesn’t, then you get a conversion problem. This leads to many reconstructive actions to correct this.”
“In order to maintain realistic expectations, it is important to look at the quality of data during your current management phase,” René continues. “and if the data quality is deemed ‘acceptable’, only then the conversion software will run. Checking of totals can still happen automatically, but detailed checks shall really have to be monitored and assessed by experts from the organization itself. Including the auditor, who wants to determine in his audit if the conversion is complete and executed properly.”
The most remarkable conclusion from the research is probably the strong increase in organizational or business problems in ERP implementations. Organizational problems are problems like uncertain business processes, instructions, client specific parameterisation, etc. In 2014 there were 52 of such problems per process, this was increased to 179 issues a year later. An increase of as much as 244 percent, thereby around two thirds of all problems during an ERP implementation were cause by commercial problems last year.
Discussion and parameterisation of the software are according to René common issues in this area. “When the software is delivered this does not always meet expectations. There need to be long discussions at various levels within the organization to come to the decision ‘how it should be’ made. These discussions are often on the critical path of a project. Another example is the parameterisation; to properly implement an ERP there is input needed from the organization. For example, setting up a questionnaire for the daily maintenance process. A supplier can only start working when the input is provided, input that solely can be provided by the organization itself”.
According to René, the aforementioned accountability of the business is responsible for this and during this process businesses are stricter for themselves. When change is coming – we want it all (:o)).” In addition, because of all sorts of valid reasons a ‘standard ERP’ is selected and the organization will therefore need to change more, than in the past, to the direction of the IT. The IT also is the enabler of new strategic directions, therefore businesses will have to restructure and change internally.”
Besides the increase of problems, the rise of standardized ERP systems and Best of Breeds solutions are also noteworthy. Yet René does not want to associate one with the other. “We see that with the advent rise of standards, the number of commercial issues and the number of IT problems decreases. It is too early to decide on the final conclusions based on the current research. If standard systems and Best of Breed are the cause for the larger amount of problems is difficult to substantiate with figures. The reason for this is that Best of Breed always has an ERP core and expert systems from other software suppliers associated or linked with it. In terms of implementations, we do not see many differences in the issues. But mainly during coming upgrades the results will differ. In 2014, the first ‘standard’ systems were chosen, and in 2015 the first businesses in our focus switched to these standards. In 2016 and further we see many upgrades being scheduled, so we can only tell more about this correlation in the coming years.”
Although at all ERP implementations organizational or business problems had the upper hand in 2015, it is still the IT that causes most ‘blocking’ issues. This means there are no ‘workarounds’ possible. According to René about ten percent of all problems are blocking, and issues with the parametrisation are most common (26 percent). Also, software errors (22 percent), conversion problems (13 percent) and connection problems (11 percent) cause blocking problems more often than the rest.
What the combination of all IT and business problems ultimately cost a business, is difficult to say according to René. “They’ve been conducting years of research for this, but because we have no figures from different parts – for example, absenteeism caused by poor IT, faulty control reports and clumsy use of IT – that it is difficult to predict.”
Businesses could take steps to counter the issues in ERP implementations. “Do not compromise on the fields of test and acceptance work, and divide the process into smaller parts which after each short cycle integrates testing throughout the entire process. Also, hiring a professional can offer a solution so that you get a clear and transparent insight in the quality of IT. In this way, businesses can easier steer on facts.”
ERP suppliers can get the amount of issues down by including better unit testing according to René. “Enabling users’ involvement in joint testing and enabling professionals whom see testing and IT acceptance as their craft should help.”
“However, a completely smooth ERP implementation will never be achieved”, according to René. “That is impossible. To create a match between IT and processes and at the same time be able to answer the question ‘does it work?’ and ‘is it workable?’, will always involve plugging holes and bridging gaps. And precisely these holes will always create issues and problems.”