ERP Modernization: Why Not Keep it Internal?

You’re faced with a major project. Your company needs a new ERP system and getting approvals for this is not typically smooth sailing. It takes a lot of time, money, and resources.

Once your company has agreed to move forward on a new system it’s normal to consider going through this process alone. After all, why would you spend even more money and hire an outside consultant when you have highly competent IT professionals in-house? Whether this is an ERP replacement modernization or a small upgrade, the question must be addressed carefully.

For many IT projects, I would agree with you. Your internal resources are usually just what you need to accomplish your goals. But when it comes to ERP, the factors are much deeper and often hidden at first – or even fifth – glance.

Here are a few things to consider before you jump into the ERP abyss on your own:

1. ERP modernization is NOT merely an IT project. It touches all facets of your company, involving your people and business processes in addition to your technology. The whole company must be involved at different levels for this to be a success.

2. Because this project will involve more than just the IT department, who will have the time to manage this? Have you dedicated one internal resource to oversee the project? If you have, then good for you, but you need to ensure they have nothing else on their plate. When other issues bleed in, it will affect the ERP project every time – usually in a negative manner. This person will also need to help manage the other internal resources needed.

3. And how about the person who has been chosen to oversee the project? Have they been through an ERP modernization before? Typically, an internal project manager has been very successful with projects but has only been through an ERP modernization a couple of times at best throughout their careers.

4. Statistically, over 70% of all ERP projects are considered unsuccessful. Of that 70%, over 95% were run without a professional consultant.*

Why Hire a Consultant?

A good ERP consultant is worth much more than the cost it takes to hire them. At KnowledgePath Consulting, we actually reduce the overall cost of the project while also ensuring that it is a success. How?

1. Let’s start with numbers. Our negotiating power is strong. We help our clients finalize a much better purchase price than they would get negotiating on their own. And, since we take no commission, all the value goes straight to you, the client.

2. ROI: Throughout our process, we identify both technology and business efficiencies to help you improve your efficiency, flexibility, and agility both company-wide and in specific departments. In a recent project, for example, we helped our client save approximately $3M a year and had an ROI payback on both system and consulting costs in less than 3 years.

3. Because we do this all day, every day, our consultants draw from years of knowledge and experience. We also stay up to date on the latest developments throughout the industry, and that’s no easy task either. This translates to leveraging the value of professionals who have seen what it takes to successfully go through an ERP transformation and identify new opportunities for your business, as well as the hidden pitfalls and roadblocks that can cut the unsuspecting project manager short.

4. Mitigate risk throughout multiple channels. ERP modernization is fraught with risk. I don’t say this as a scare tactic; it’s common knowledge. A good consultant will help you mitigate this risk from day 1 by ensuring the right questions are asked and answered. They ensure you don’t lose what makes your company unique in the marketplace, that the process minimizes interruption of day-to-day business, and (just as important) that your workforce is properly trained and educated to use your new solution.

In the end, you have choices. You may still believe your best option is to go it alone. But, consider the value you will gain with a ERP consultant working with you before you make your decision. The difference will probably surprise you.

*Numbers are averaged from studies by Gartner and Accenture