How does your Management View ERP?

How does your Management View ERP?

Enterprise Resource Planning Systems (ERP) in a manufacturing company have great tools to assist with integrating all of the functions of the business from quote to cash including all of the planning, procurement, inventory, production, despatch and financial functions.

The logic of how to use ERP in a manufacturing organisation is actually simple, if you understand what integration and integrated decision making means.

ERP is more than just a computer system; it is a decision support system to provide real-time information for decision making. Making gut-feel decisions on operational matters need not be guess work as the ERP system, used properly, can predict consequences of decisions before you make them by simulating the different decision making scenarios through the ERP system and predicting the likely consequences.

Unfortunately for most organisations mastering the tools in ERP, beyond the basic nuts and bolts, has proved too difficult and the potential of the technology is lost.

The high cost of ERP projects with delays and budget overruns has created a negative project image from top management and the users who have had to battle with the detail.

These systems, for most organisations tend to be underutilised, and used for little more than recoding systems. The interesting thing is when asked, management think the system works even though the system is not being used as intended.

Many organisations are unable to quantify any tangible benefits that implementing an ERP system has given them. This may be, in part, due to the lack of a realistic evaluation when justifying the project and the fact that they cannot identify what benefits, if any, they gained from the implementation of ERP.

We visit a number of manufacturing organisations where the management still view ERP as a technology project that is simply updating or replacing existing legacy systems. Adopting the philosophy for decision making using the technology is not an option as the system has not been sufficiently implemented to provide the information needed to simulate scenarios.

In one organisation, not an isolated incident, when we talked about Materials Requirement Planning or MRP, we were told that their MRP was based on a min/max system. On further questioning they didn’t understand what MRP was. The data that they would need to support an effective MRP in bill of materials and inventory accuracy was so bad no one believed the system information due to errors. They believed this was the fault of the computer. Spread sheets abound instead of fixing the data and the processes that generates the data and errors.

On presenting an overview to the management and key users on how MRP worked they thought they didn’t have that capability in their system. In a sense they didn’t. The MRP planning module was never configured as they felt they didn’t need it.

ERP was born out of the manufacturing industry back in the late 1960s (MRP & MRPII) and through a steady progression of technology innovations over the years is a very powerful tool for managing the flow of information and materials through a company.

These views from management must change if the real benefits of a technology with so much potential are to be used in the way they are intended.

Experience worth listening to!

Ray Atkinson

for further info goto

ERP Technology is mostly beyond our ability to successfully utilise it

At a recent industry forum future concepts of the direction of ERP were unveiled. This included a heavy shift to mobile devices to interact with ERP, simple functional self-learning tools and a push to the cloud.

Whilst the concepts presented were somewhat visionary the issues of user acceptance and corporate success with ERP was not mentioned during the presentation.

It would appear that the gap between ERP capability and corporate implementation of the technology is not being closed. With global surveys showing 75% of all ERP implementation failing (failure depends on expectations and outcomes against those expectations) it is clear we have not got the basics of the technology working effectively and any adding to the complexity with the new ideas will simply exacerbate the problems.

For those companies that claim successful implementation they are only reporting 50% of the expected benefits. Arguably that would not constitute success.

The reality is ERP implementation is complex, requires 100% commitment from the organisation from the top down (not just lip service) and must be approached systematically over a longer time period.

For most organisations ERP implementation is resource sapping, disruptive and leads to corporate fatigue.

The majority of organisations manage to get the basic nuts and bolts working but do not implement the tools in the systems that provide the real value to the organisations as a consequence of this corporate fatigue. In fact most organisations become disillusioned with the entire ERP concept and shy away from continuing with implementing functions beyond very basic nuts and bolts.

Adoption of the new capabilities being currently programmed and soon to be offered will only make matters worse as the fundamentals have not been mastered. Mobile connectivity to systems that do not function properly will only lead to frustration and potential customer and brand damage as information sourced is incorrect or not available through the mobile devices.

The push to cloud is somewhat confusing as it is being touted as an easier and faster way to implement an ERP system. All of the issues that cause problems with ERP implementations will still exist process, data clean-up, conversion, accuracy, structuring of product, definition of work areas, materials supply, inventory management, production, costing, finance etc still have capacity to cause systems problems and failures whether it is cloud based, SaaS or in-house hosted.

The current failures of ERP to provide corporate value will only be exacerbated by adopting additional technology features that rely on the basic ERP systems to be operating effectively to successfully utilise the changes being mooted.

It is clear the current approach to adopting and implementing ERP systems is seriously floored. If there is any hope of being able to fully utilise the vision of ERP going into the future then a lot more work needs to be done to successfully implement ERP, as we have it today, to fully utilise its potential.

Experience Worth Listening to

Ray Atkinson

Damaging your business with a failed ERP system

Damaging your business with a failed ERP system

For many organisations the decision to embark on an ERP venture is driven by wishing to improve the business and benefit from the potential the technology has to offer.

Too often the level of understanding on what is involved is not adequately understood from the people who make the decision to proceed!

It is a simple matter to see an ERP project as a technology project and apart from making decisions on approving expenditure and a basic oversight of the project, management rarely get involved in driving ERP projects and prefer to delegate the project to middle level management who they believe have the technical skills in computers.

It is easy to see how the implementing company can get swayed by statements from vendors such as proven paths, world class experience over hundreds of implementations, and a host of other comforting terms that are more of a sales pitch to sell the product rather than real expertise.

The reality is 75% of ERP implementations can be put into the category of failure. The definition of failure depends on what the expectations were in the first place. Whilst there are organisations that abandon ERP altogether the majority of organisations implement parts of the system, namely, finance, inventory, order entry, purchasing and some works order type activity. Whilst these functions offer some degree of process capability it does not utilise the full integration of the technology in terms of planning and control and does not reap the benefits that ERP offers.

The failure of an ERP system is not just confined to areas that are not utilised or that don’t work well. Expecting to fully integrate the functions of the business utilising ERP and turning the system to live running and then finding out post-live running that the system isn’t working because issues such as resources, process reengineering, internal conflicts, management involvement were not resolved or data wasn’t sufficiently structured or cleaned-up during the implementation stage of the project can lead to operational disaster and in worse case scenarios bankruptcy.

The damage to a business through the lack of accurate information or systems problems not resolved during implementation can manifest in failure to ship and invoice product, failure in order entry, build-up of unnecessary inventory, factory shortages, late deliveries, lack of accurate financial information and significant brand damage.

Whilst these failures are the norm and not exceptions, they are unnecessary. The key to successful ERP adoption is all in the approach taken by senior executives at the beginning of the ERP planning and acquisition strategy.

We have analysed hundreds of MRPII and ERP projects for the past 35 years and have identified 26 key areas that contribute to implementation failure. You can assess your ERP project approach or identify issues you need to address by going to and downloading a free copy of our ERP self-assessment. We feel sure this will provide you with the tools to proceed with ERP and be one of the successful ERP sites.

Experience Worth Listening to.

Ray Atkinson

Atko Global

Will Cloud Make ERP Implementation Easier?

Will Cloud Make ERP Implementation Easier?

We are seeing many articles pushing the concept of computing in the cloud. There are also people (salespeople) pushing cloud solutions over in-house hosted. Statements like traditional ERP is dead are becoming commonplace and also statements that ERP will be easier to implement in the cloud.

ERP is a system used to integrate all of the different areas of a business to provide information and in some organisations (manufacturing/distribution) for the planning and control over the entire supply chain from order entry to planning of materials, purchasing, factory planning and control, inventory control, costing, capacity planning and the despatch of goods to financial management. These systems are designed to provide accurate information in real time for decisions to be made on managing the business.

The issue of whether or not the system will be in house hosted or otherwise comes down to a number of issues relating to economics, support skills and other business factors unique to each organisation.

The implementation of ERP is another matter. It doesn’t matter where the system is hosted from! Issues of software fit, data integrity, education, training, reengineering, data migration, management involvement and user engagement will all be the same whether the system is in-house or externally hosted.

Global surveys are showing that the problems in managing successful ERP projects revolve around the failure in some or all of the issues raised here and little or no mention at all about where the system is hosted as being barriers to success.

The claims that cloud hosting of ERP is easier and better than in-house hosted ERP, apart from any financial cost benefits,  are undoubtedly exaggerated, and in my view, seem more in line with a marketing strategy to differentiate products from the many ERP vendors who are constantly coming up with claims and strategies to differentiate their products from their competitors.

Make no mistake the issues of implementation are challenging to the best of organised companies and caution should be exercised when faced with various claims from those who have a major vested interest in pushing their products.

The surveys are consistently showing that ERP continues to be a problem for companies trying to implement the technology whether it is cloud hosted or otherwise!

Ray Atkinson

Experience Worth Listening To.

Atko Global

for further information go to

How to kill your ERP Project

How to kill your ERP Project

A 2014 global survey on Enterprise Resource Planning (ERP) has quite clearly shown that software customisation has the potential for totally derailing an ERP project. Asking for software to be customised during implementation is a major source of project delay and budget blow-outs. Software houses are more than obliging to undertake the customisation, at a cost!

The lack of an effective internal system for logging customisation requests, post purchase, and determining “what is essential” as opposed to “wouldn’t it be nice” can very quickly lead to massive changes to the software far beyond the original scope of software requirements.

Surveys are showing 60% of ERP projects are undertaking significant customisation or purchasing additional software as it is perceived they cannot do without it. I am not referring to simple configuration of the software but changes that impact functionality or process.

With all of these changes going on and the negative impact the changes have on ERP projects the question is “Why”?

The great majority of companies we speak to go to great lengths to define their ERP requirements by engaging users and all stakeholders to ensure they cover all of the business requirements. These requirements are documented and put into a request for quote that is sent to potential vendors for their response.

Given the effort that goes into defining the requirements and the fact that 60% of ERP projects undergo significant software customisation/modification and or require additional software, the process for defining requirements must be floored.

It has long been known that the best way to implement ERP software is to define clearly, up front, what the requirements are and implement the software with minimum or no changes. The key here is to get it right at the software requirements stage and ensure it is very clear what the requirement is and tested against the software prior to purchase. Any shortcomings in software should be identified in the pre-purchase demonstration stage of the project and negotiations made to correct the shortcomings or look for an alternate package that better fits the requirements.

The changes that organisations are making to ERP software during the implementation stage of the ERP project causes significant cost and schedule blow-outs to the project. In many cases the costs far exceed the budget for the project resulting in shortcuts being made to the project, affecting the systems performance during live running or causing the project to be abandoned.

The method of defining ERP software requirements needs to be closely examined to ensure the ongoing disasters in ERP failures is not due to poor definition of software requirements.

Ray Atkinson

Experience Worth Listening to!

Atko Global

For further information on ERP go to

ERP Failure Starts Long Before Software Implementation

ERP Failure Starts Long Before Software Implementation
An analysis of many failed or non performing ERP projects highlight the failure of organisation’s top management to get their heads around the full implications of taking on a project as large and intrusive on business operations as ERP!
Issues of under-resourcing, lack of budget, poor software fit and internal conflict have their genesis long before the actual software implementation project commences.
ERP implementation is really about good project management and this includes getting the detail of project, scope and control right at the very front end of the project!
Embarking on an ERP project without understanding the full scope of work so the resources can be put into place can only lead to downstream issues during the actual work phase of implementation.
Setting budgets based on a figure of money available without understanding the scope of work, associated software and integrator costs results in budget blow-outs and financial stress for the implementing organisation.
Software shortcomings requiring modifications, customisation or additional software should have been resolved at the up-front negotiation stage by constructing a model and testing the software against the model to determine what the shortcomings were and negotiating the changes as part of the contract and not finding out later resulting in significant problems with the project.
Having worked on major projects throughout the world the up-front definition of the project and scope forms the basis for budgets, time schedules and detailed scope of works. I fail to understand why ERP projects are not approached in the same way given the huge amount of damage, operationally and financially, that can be caused by lack of attention at the formulation stage of the project.
There is no doubt there is a high degree of confusion on what the ingredients are for successful implementation of ERP into organisations! Claims of best practice, proven path, easy to implement, best in class and a host of other descriptors are all used by selling companies to try to gain some form of marketing/sales hedge over their oppositions.
Buying companies are faced with a mountain of information attempt to navigate their way through the maze of data to determine which software they want and which organisation they want to deal with to give them the best chance of success.
The lack of a proper strategic approach coupled with the details of what the buying organisation actually neesds, in detail, leaves organisations vulnerable to an overblown sales pitch and more than likely projects that run into problems resulting in the project taking longer, costing more and providing little or no tangible business results.
Our analysis over 35 years has produced a set of guidelines that addresses all of the up-front issues and is available as an “ ERP Project Self Assessment” free of charge to anyone who wants to assess their own project approach before they commence or as an in-project exercise. Accessing and using this assessment will make the difference between success or failure of their projects. To access this “ERP Project Self Assessment” goto there is no cost or obligation for accessing this information.
Ray Atkinson
Experience Worth Listening to:
Atko Global

An Expert Witnesses View of ERP failure

An Expert Witnesses View of ERP failure

We are asked by many law firms to analyse failed ERP systems and provide an opinion as to why they have failed.

Typically organisations resort to other means including legal action to get some form of satisfaction when their ERP project ends in some form of miserable failure. Failure in this context can take many forms; massive cost overruns, lack of system performance against expectations, complaints about inexperienced integrators, misleading and fraudulent representation and so the list goes on.

Our approach, as expert witnesses, is to look at the totality of the ERP project and the role of all of the interested parties. This includes the ERP software sales people, the system integrators and the implementing client company.

The term used to describe the relationship between the parties is called “The Devils Triangle.” The ERP sales people create an expectation via their sales pitch, web sites and glossy brochures, the integrators who attempt to implement the system to meet the expectations of the client and the client who struggles to implement the system and come to terms with the changes required to ensure a successful outcome.

Within each of the players in the devils triangle there are a myriad of issues that need to be identified and assessed. Our role as expert witnesses is to sort through these issues and provide an opinion in an unbiased way as an aid to the court.

The areas we focus on in our analysis are:

  •   What was required
  •   What was offered, in writing and verbal
  •   The reference sites
  •   The contract for supply and services
  •   The implementation project management and control
  •   The company role in carrying out the work
  •   The integrators roles in advising and assisting
  •   The identification of critical project issues
  •   The communication and escalation of critical project issues
  •   The expertise of the integrators
  •   The ultimate outcome

There is no doubt each of the different parties share a degree responsibility for ERP failures, but a key question to be answered is “Who carries the greater burden for the failure?”

Part of the problem in determining responsibility is that each party can legitimately point to the other parties and show failure to perform. The arguable point is always “Who were the experts guiding and advising on the overall ERP process?” These are the ultimate points that will be argued by the respective legal parties to try to apportion the blame and responsibility.

The reality is it is really in no one’s interest to engage in expensive legal battles unless it is absolutely necessary. Mediation should always take precedence over litigation to try to find amicable solutions.

Our expert witness analysis applied in a court of law always demonstrates the interaction of the parties in the devils triangle but also puts the spotlight on the “expert parties” who have the experience and expertise as key roles in ERP failures

Experience Worth Listening to!

Ray Atkinson

Atko Global

for more information goto

Effective ERP is about Change Management

Effective ERP is about Change Management

Enterprise Resource Planning (ERP) is now a well, established technology albeit a technology with a history of poor outcomes for organisations in terms of achieving expected business benefits.

Many organisations struggle to effectively manage all of the issues in the business that enables the technology to integrate and provide the information for the smooth planning and control over operations and as a result too many compromises are made reducing the effectiveness of the technology.

Change management is a critical part of any ERP project. Simply duplicating what the company today using a computer, whilst generating some efficiency in time and data accuracy, does not provide the platform for getting the maximum efficiency and benefit from the technology. The change management that is required revolves around reengineering not only the business processes but the reengineering of the management decision making process using the ERP technology to provide information.

The problem in change management is the perceived challenge to the entrenched managements control over different parts of the business. Managers will resist the changes if they believe their own authority is being diminished as part of the implementation. Operational individuals will also resist the changes if they feel they are being impacted in a way that affects their jobs.

Top executives tend to put changes that are resisted by their own management team as too difficult and put off making tough decisions without realising the lack of decision will impact the overall ERP effectiveness.

Surveys on ERP are all showing that a significant barrier to successful ERP implementation is in the area of change management. The surprising thing is this is not new! We have known for many years that change management is a major barrier to effective ERP implementation. There are many publications on the need for effective change management in effective ERP acquisition and implementation. Despite the information available we do not seem to learn the lessons or the actual “what does change management mean” hasn’t been defined in a way that top management can understand and practically engage in.

Experience Worth Listening to!

Ray Atkinson

Atko Global

For further information goto

ERP Project Failure is the Standard!

ERP Project Failure is the Standard!

Constant surveys on ERP continually show ongoing problems with adoption of the technology! After many years of ERP experience you would think that we would be getting better at implementing the technology successfully. Not so! Panorama’s recent survey is still showing ERP takes longer, costs more and does not deliver expected tangible results. No surprise here! The approach being taken has not materially changed to way the technology is being adopted since the 1990s.

The model of customer producing a list of requirements, sometimes with consultants help, is followed by a response from potential vendors, highlighting the positives in their package and downplaying the negatives, supported by claims of “Proven Paths” implementation methods and claimed expertise, suspect as best, and customers paying large sums of money for implementation still produces the same disappointing results.

The reality is ERP is not simple, requires the collaboration of different players with different agendas and that does not include the change difficulties of internal company politics.

The term “Devils Triangle” refers to the key players with their different agendas; The ERP software vendor who is trying to sell their product and may stretch the truth or downplay issues with the software against the requirement in order to get the sale and at the same time creating an expectation with the client. The software integrators who are expected to implement the expectations sold by the sales people which may not be achievable. The company who has not really understood the real need, underspecify the software at the front end resulting in downstream implementation problems, restrict resources, take shortcuts and lack effective management involvement all contribute to the disappointing end result.

In theory each of these players should come together to achieve a satisfactory outcome but in reality they rarely do as the drivers for each part of the “devils triangle” are working on different priorities.

We have constantly seen disputes where each party blames the other for the problems and in some cases these disputes end up being fought out in the courts where a confusing range of evidence is submitted, all of which relate back to the “devils triangle” and taken in isolation, depending on where each party sits in the scheme of things, has validity.

Our prediction is ERP will continue to cause major problems of delays, unacceptable cost blow-outs and little tangible benefit until the approach to acquisition and implementation of the technology undergoes a fundamental change.

It is too late when the project has come apart during the implementation. The delays, costs and end result can only be reduced and not avoided even when timely intervention is made to change the course of the implementation.

The overreliance on software vendor integrator’s to implement ERP systems has to change and a fundamental realisation by organisations that just paying someone large amounts of money is not the answer. The answer is for the party most impacted by success or failure to take a different approach and accept the responsibility for all aspects of the project. That party is the buying client as they will be left with whatever legacy is left behind at the end.

Is there a real solution to this? We have been working with ERP and the forerunner MRPII for the past 35 years and our mediation and expert witness work with organisations in dispute has resulted in significant analysis across a broad range of industries and common themes have emerged that relate to the devils triangle and the failures of the different parties.

We have put together a series of steps that must be taken to systematically ensure each stage of the project, beginning with the acquisition strategy, to ensure the company is in control at each step of the way and can successfully direct the outcome and not leave it to chance.

The outline of the steps following is supported by a free self-assessment which is available to compare what you are doing against the assessment criteria. Organisations that have used this free assessment have invariably changed course and report positive outcomes. To access this free ERP implementation self-assessment goto

The Steps:

  1. 1.      ERP Risk Assessment
  2. 2.      ERP Cost Justification & Budget
  3. 3.      Request For Proposal (RFP)
  4. 4.      Software Selection Criteria
  5. 5.      The ERP Contract
  6. 6.      Project Plan
  7. 7.      Go Live Date/s
  8. 8.      ERP Education
  9. 9.      ERP Training
  10. 10.   Implementation Responsibility
  11. 11.   Project Management
  12. 12.   Executive Involvement
  13. 13.   Software House Expertise
  14. 14.   Software Imp Team Expertise
  15. 15.   Process Change
  16. 16.   Data Clean-up
  17. 17.   Data Conversion
  18. 18.   Issues Identification
  19. 19.   Scope Change
  20. 20.   Software Changes
  21. 21.   Management Action to Issues
  22. 22.   Go-Live Readiness Reviews
  23. 23.   Live Running Cut-over
  24. 24.   Post ERP Cut-over

This approach is holistic and provides a clear path for the implementing client to take control of the project and ensure success the first time.

Experience worth listening to!

Ray Atkinson

Atko Global

For more information on blogs and articles goto

ERP and Waste Elimination

ERP and Waste Elimination

Many organisations believe that an ERP project will reduce waste and make the company more efficient. ERP is primarily an information tool that enables the company to plan and control their activities by integrating all of the elements of the business from an information perspective.

Ninety per cent of ERP projects fail to deliver tangible business improvements or reductions in cost adding activities. To get the most from the ERP project, business process reengineering, lean principles and six sigma techniques need to be applied, at some point, as well as the implementation of the software. Process reengineering lean and six sigma techniques are based around reducing non-value adding activities and strive to for a zero defects environment.

For most organisations attempting to combine the four into a one stop project will end up in confusion and complicate an ERP project that most likely will become beset with significant issues of project delays, software fit problems and budgetary blow-outs.

There are different schools of thought on the application of these technologies! Some believe that process reengineering, lean applications and six sigma should be implemented before ERP. Others argue that ERP is an enabling technology that provides the platform for process reengineering, lean and six sigma. To take it a step further there are those who advocate replacing ERP with lean and six sigma.

Can lean or six sigma manage the entire supply chain without ERP? I don’t believe so. ERP

is required for all of the up-front processing of information such as forecasting, sales order processing, production and materials planning, accounts payable, accounts receivable, product costing and many other vital functions of the business

There are certainly opportunities for the application of lean, six sigma and process reengineering to streamline activities and reduce cost-adding activities such as activity based costing, vendor managed inventories, factory and vendor pull systems (kanban). In all of these ERP is a still a vital aspect of operating a business. An understanding of how these technologies can be applied should be looked at before embarking on any business improvement program to determine the optimum application to benefit the organisation. How the ERP system is implemented can facilitate or block the application of the other technologies.


Ray Atkinson


Experience worth listening to!




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