Provide Guidance on ERP Direction

Type of Service: 
Management Consulting
Country: 
Saudi Arabia
Industry: 
Health Care Services
Duration: 
Ongoing
Challenge: 

To assist a client to develop a clear vision and approach towards implementing an Enterprise Resource Planning system within their organization. A major part of the challenge lay in the fact that the client had accumulated over the years heterogeneous systems from different vendors that covered pieces of an ERP system. However, this approach was beginning to cost the client more and more money, as each individual vendor went through their upgrade cycles. The constant and increasing frequency of upgrades and subsequent integration work was resulting in significant license costs and rework.

Another consequence of a 'piecemeal approach' to ERP was that the client was also experiencing significant overlap between systems purchased over time. For example, for a function such as asset management, there were several systems essentially capable for the job - but each system was being used in different departments.

Yet another challenge, and there were several, is that different systems were being significantly underutilized. Given the piecemeal approach, and a lack of vision from the highest levels, individual departments had pushed through their individual tool selections, but not followed through adequately during implementation. This resulted in several expensive purchases of complicated software systems - that essentially sat unused.

Solution: 

Fixing a problem of this magnitude and complexity cannot be done overnight. As a senior consulting company, Systematic Computer Science took the role of alerting the client to the consequences of their piecemeal approach, and of presenting competing alternatives. In particular, we presented a comparison of two approaches to the client's senior management: a best-of-breed ERP system versus a fully integrated ERP system. We explained several dimensions of comparison, and the overall 'score' of the two approaches, given a particular flexible weighting. We also researched the issues behind ERP failures, and presented a summary of the critical failure factors behind most ERP failures - and unfortunately, many ERP projects do fail.

Systematic Computer Science also took the position of gracefully recommending to the client that existing plans to continue with the piecemeal approach be put on hold. This unpopular recommendation was met with a fair amount of resistance within the client's organization, however we tried to make it clear that their current approach was literally costing them millions of riyals, and the problem appeared to only be getting worse. Instead of purchasing additional systems from different vendors, and only considering individual department's needs, we recommended to the client to consider a unified vision, preferably one that favored a fully integrated ERP, but at least one that had a clear direction based on organization-wide considerations.

Benefits: 

The immediate benefit - and drawback - of our recommendations was to slow down the purchase of piecemeal systems. This was of overall benefit to the client, but a drawback for the individual departments who were intent on a particular software system (but without consideration for the organization as a whole). Another benefit of our work in this assignment was to formally raise the issue to the consciousness of the senior management, and to entrust them with taking the lead to solve the problems. Without commitment from senior management, ERP implementations are almost certainly doomed to fail, a lesson we wanted to make very clear to our client.

The greatest long-term benefit - إن شاء الله - to our client was to help them begin establishing a clear vision and plan for addressing their ERP needs. Our recommendations included setting up a steering committee for ERP chaired by the head of the organization, gathering and documenting the business requirements (absolutely critical), and doing technical research on the competing ERP alternatives, from Tier 1 to Tier 3 vendors. These recommendations helped raise the client's awareness of the complexity of the problem facing them, and also helped them begin mobilizing their resources towards a solution.