Business Intelligence lessons from failed ERPS

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Having seen so many big brand ERP implementations fail, I sometimes wonder whether implementing ERP is about better service to customers and better empowerment of staff or a high profile networking opportunity.

Fail!!! ERP Case Study

They implemented [insert large ERP vendor's name here] and me and 30% of the staff left the company!” I heard this at a BBQ I was at with friends and family over the summer break. Needless to say, my ears pricked up and I lost focus on my current conversation about surfing (strange I know…).

I asked Barry how he worked out that 30% of people left. Barry said the new EPR system was end to end. Barry works in the agriculture retail business, you know, selling equipment to farmers. He was the store manager and had about 15 staff. Barry and his team were all farmers or worked on farms at one point in their lives. Barry is really in touch with his customers - he loves to help them out. Barry and his team are bright guys but aren't computer experts. The company Barry worked for decided to change the ERP and that meant all the branches got a new point of sale (POS) system. That's where the problems started.

The branches received new POSs (or tills” as he called them) that were really hard to use. Staff received training – you know, a team who didn't know them or their customers. They spent a couple of hours training then they were gone. By the end of the day Barry and his team were pulling their hair out. As the days went on, sales were down. It took a long time to get the hang of the new system. Barry assured his team that that in a week they'd be laughing – it'd be
great.

Two weeks passed and four of Barry's team had resigned. Good staff, who would need to be replaced with new people who would need more training. The new system was too hard. They couldn't help their customers any more. It took too long to process a sale. They were constantly calling the support team at HQ – on hold most of the time trying to get help and looking inept in front of customers whose opinions they valued and whose future business was at risk. After a month Barry left and got a new job. There were only two people left and they were the storemen who didn't use the system.

Barry's frustration at not being able to do his job because of the failure of a system crucial to his business, led to him leaving and getting a job where he could be successful. Barry has since opened his own store. No surprise that the good customers who had ongoing needs and paid on time moved with him. He uses a simple ERP that connects to his POS. He is happy because he can focus on his customers rather than on systems that were supposed to help but hurt a lot instead. His staff are happy and, most importantly, his customers are happy.

Barry's old employer lost 30% of their most effective staff. Most of them were front of house staff, the people with existing customer relationships - the people who earned revenue. And it wasn't just Barry's store, all of the stores around the country lost staff. New staff needed to be hired and trained, wasting time and money. Then there's the customers who were lost to competitors and won't be seen again anytime soon.

I have seen the same with big, expensive, clunky BI systems. People who can't get their job done, spend too much time in Excel with disconnected data, just trying to get their data right for a report. Days and weeks are consistently wasted with difficult systems. Eventually, sometimes quickly, good people realise there are much better ways to apply their energy and creativity. They will leave for greener pastures.

Lessons Learned

There are three things I take from this:

  1. If you've got great people doing dumb stuff because they have blunt tools, don't spend too much time getting to know them because they won't be around for long. Good people vote with their tail-lights.
  2. When thinking about systems you must radiate from the customer in, not from the technology out. The focus should be on the customer and what it takes to make their experience easier, better, faster, or whatever is important to them - not what's easier to maintain in a central database.
  3. The system should fit the business and not vice versa. One size does not fit all.

A good BI system is like any system, it should work with the needs of the business, making the customer (both internal and external) the focus.

That's what I take from this but I would be interested to know your experiences.

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