Creating a procurement process is only one part of Enterprise Resource Planning or ERP. ERP and procurement are often implemented at the same time, and corporate rules interfere with both, as corporate policies can be stifling and restrictive. Clearance from accounting may be required to procure an item over X dollars. Approval from lawyers may be necessary if unionized staff or laws are in question. SAP software (Systems Applications Products) was invented for ERP to alleviate complications. My recent guest on Negotiations Ninja, Shaun Syvertson, is the head of a company called ConvergentIS, focusing on training and implementing SAP. In our chat, he was able to share insights with me on how to successfully implement ERP.
Clarity is the main component of a successful ERP rollout. Without clarity, it is difficult to understand why you are doing something. Clarity helps break the process down into easily identifiable chunks. Why you are undertaking a task, who needs to work with who, and what the next step is. Business velocity and margins cannot be improved without clarity. It is crucial to roll out a procurement process and ERP.
ERP software comes stocked with its own best practices, but those may not go deep enough for large corporations. Those practices are modest compared to the needs of the public sector. Procurement professionals will have to determine how to buy something, how to get an offer in, who should be buying what, and which purchasing channel should be used. All of these questions are certain to emerge. Legal reviews, financial permissions from accounting departments, and other corporate red tape are likely. Procurement professionals will need to consider these barriers, what is necessary to train staff, turnover rates, and who is leading. Distilling these factors down into simplified task lists will help identify how SAP can guide problematic processes. The software can be customized into guided steps after clarity and distillation have been established and put into practice. Consider how simple it is to buy something on Amazon. Procurement and ERP should be comparable, not a frustrating journey of phone calls and emails.
Checklists are the best way to create the workflow and are used in nearly every profession. Once analyzed, tasks and processes can be distilled down to simplified versions. Checklists materialize once these steps are completed, and conspicuously streamline complicated processes. Having a list of prerequisites ready to go makes dealing with excess complexity transparent. Pre-surgery and preflight audits allow surgeons and pilots to focus on huge tasks and allow procurement people to simplify 20+step procurement. Taking the complexity out of business doesn’t mean complexity doesn’t exist; it just creates a better chance of not missing steps. Having checklists in software for procurement means not relying on human memory, zoned out staff, inept leaders, or turnover.
ERP implementation has failed frequently, sometimes famously. Studying case studies of these failures makes warning signs apparent throughout the implementation process. When implementing ERP, it should be obvious why ERP and procurement are needed. If it is not, questions should be raised. Procurement holds a unique position to make sure an organization is not asking for something they aren’t ready for. By asking tough questions, procurement professionals can prevent disastrous consequences. Goals and successes should be easy to identify, and whole teams should be utilized without skimping on team costs. Following these protocols will help avoid ERP implementation failure.
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