Welcome to Episode 2 of my blog.
I hope you enjoyed Episode 1 where we discussed the role of I.T. managers in cloud vs non-cloud scenarios.
In this episode I will try to bring together the concept of driving between two cities on a highway and implementing an ERP solution for your business in the cloud.
You might think, what is the relation-ship between these two activities? I will explain.
Imagine you have the task of driving your car between in the city of Zurich in Switzerland to the German capital -Berlin – a journey of almost 850KM (please don’t ask me why I chose these two random cities). As you surely can imagine, along the way you will need quite a range of services to make sure that both yourself and your vehicle successfully make it to the destination – and in good shape. These would include re-fuelling services for your vehicle, maintenance services, possible emergency services, rest areas, vehicle inspection shoulders, motels, restrooms, food and drink for yourself – especially that warm shot of Espresso to keep you awake at night – and perhaps more.
Now, after having put yourself in the above picture, imagine the scenario where all the above services, instead of being delivered to you on a regular basis through-out your journey, are available all at one go at your destination. So instead of having various gas stations all along the different motorways you are just offered with one gas station Megapolis with robots that automatically fuel or charge your car, a 5-star Michelin restaurant and state-of-art restrooms but which is right at the exit that leads to Berlin’s city centre and which costs you an arm and a leg to use. The effect of this scenario is, of course, disastrous as your car will not even make it to Berlin in the first place (you will run out of fuel somewhere around Leipzig, assuming your car has a range of around 650 KM) or you would probably fall asleep before that if you don’t any coffee.
You might argue that what I wrote above is obvious or even un-imaginable and that’s exactly what I what you to think. I would then also urge you to apply the same thinking to ERP project implementations. Would you prefer to have one big project with one big nice result or ‘promised-land’ with a very high risk of not actually making it there or would you prefer smaller, regular, repeatable and less risky releases of an ERP system?
Do not under-estimate the possibility and the negative effects of failed and long ERP implementation paths. Quoting this source:
“The horror stories of failed ERP projects are now the stuff of legend. According to one recent report, more than 29% of ERP implementations fail to achieve even half the planned business benefits. Some well known examples include Waste Management suing SAP for $500 million for a failed ERP implementation, Hershey Foods’ 19% drop in profits from a failed SAP implementation at Halloween time a few years ago, the complete bankruptcy of FoxMeyer Drug, a $5 billion pharmaceutical distributor over a failed $100 million ERP implementation, and, perhaps most troubling, the over $1 billion spent by the US Navy on four different ERP systems, all of which have failed. There are many lessons to be learned from these failed ERP implementations. (You can find these case studies flooded on the internet)”
Scary, right? Right!
Is there a magic wand for this problem? No but there is a better methodology to be able to raise the bar and reduce the risk for ERP implementation: ERP solutions based on the Microsoft cloud!
The key difference and advantage when comparing this methodology with the more traditional methodology is “mitigation of risk”. In fact, this is core to the strategy of Bluefort when implementing ERP for our customers and we believe that Microsoft Dynamics ERP on the cloud is a key factor to mitigate such risks. How are risks mitigated? Through “predictability” and this is much more than a catch-phrase. How do you reduce the risk of running out of gas while driving long distances? Same concept “predictability” – most modern cars show you how much kilometres you have left to travel on the gas available in your tank. You can then compare this to the availability of the next gas station on your GPS or on the road signs.
In the same way, you can make ERP implementations more predictable, through repetitive cycles of business releases, each of which getting you closer to a new and better destination and an enhanced level of digital transformation for your business.
So your next question would be why and how will a cloud implementation help enable “predictability” and reduce risk? The answer to this question is actually quite easy, yet intriguing. Even if we go away from implementation (i.e. human) processes and focus solely on the hardware, when going to the cloud model you have predictable, yet flexible license fees which scales as your business grows. You do not need to invest in a ‘Megapolis’ i.e. a server infrastructure. Hardware costs are not predictable as hardware, by nature, suffers from wear and tear and by default has a ceiling in terms of capacity i.e. at one point during business expansion you will reach a point where you need to upgrade.
From an implementation, change management and business process perspective your journey in the cloud should resemble more a long and inspiring journey on the highway rather than the difficult path encountered by Moses and his flock when they fled Egypt and tried to reach the promised land. As you go through more business cycles the users get to know the system better, there will be less change management issues and will be more open to automating and increasing efficiency, collaboration and integration using the ERP experience in the cloud. Motivation will also be boosted because people can start using the system quicker and thus also value gains on their everyday working life and to achieve their work objectives.
The above is not just theoretical. The Microsoft eco-system provides advanced cloud tooling (such as LCS with VSTS integration, business process modellers and much more) for project management, step-by-step management of release cycles, development management, telemetry and instrumentation which can be leveraged by consultants, project managers, I.T. Pros, I.T. managers etc
The above are just some thoughts without risking of bloating this blog post. Remember: the magic word to reduce risk is through “predictability”. I will conclude this episode with some interesting quotes.