For a while, fixed bid ERP implementations were a hot topic. Microsoft Dynamics 365 (and formerly Dynamics AX) had so many built-in features, why WOULDN’T a company try to implement an out-of-the-box ERP solution?
Two primary reasons:
If you can achieve competitive differentiation without ERP customizations, why would you care if the process is different than the way it was done in your prior ERP system? Because changing people and process is often far more challenging than changing how the software works.
Companies often cite the reason they need customization is due to the uniqueness of their business model, when in reality it’s their resistance to change “how things are done around here.”
Let’s talk about a couple of customer scenarios where the customer faces the choice between ERP customization and business process changes.
Customer 1: A High-Volume Automotive Manufacturer
Competitive Differentiator: Plan to Production – Tracking inventory “states”.
Existing Scenario: This customer had to track chemicals and metals inventory as it transformed, moving from wet to dry, for example, throughout the production process. They had dozens of spreadsheets and mini-databases appended to their old ERP system.
Business Process Change: All the functionality they needed was available in Dynamics AX (now Dynamics 365), they just needed to embrace doing all the steps within the ERP system. They were able to eliminate multiple-checks and authorizations that were slowing their growth.
Customer 2: A High-Volume Consumer Goods Distributor
Competitive Differentiator: Procure to Pay – This client is squeezed between their customer and vendor, which threatens margins and non-performance penalties.
Existing Scenario: This customer was over-buying inventory because their supplier had long inventory lead times and they were reliant on the customer’s (frequently inflated) forecasts.
Business Process Change: Combining historical data with sales orders, the customer was able to better forecast sales and reduce inventory levels, freeing up cash and lowering risk of inventory obsolescence.
Weighing the ROI of the ERP Implementation
With the help of their ERP implementation partner, each client needs to decide:
You may look at the math and decide that clearly changing the business process would be the right answer, but the requirement for people and processes to change puts the entire ERP implementation at risk. In fact, the NUMBER ONE reason software implementations fail is due to user resistance to change.
What’s the right answer?
MCA Spectrum is an ideal solution for companies who want the ‘best of both worlds’ for their Dynamics 365 ERP implementation.
MCA Spectrum provides a guided approach to Dynamics 365 implementation services that focuses the implementation effort on high-value activities that differentiate your business – and uses industry standard practices for everything else. Contact us today if you have any questions about an ERP implementation, our business transformation experts would be happy to chat.
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