The Psychology of ERP Solutions
Hanno van Pelt Armin Mazariegos
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The Psychology of ERP Solutions By Hanno van Pelt & Armin Mazariegos Copyright Š 2016 Promisan b.v., Vd. Valk Boumanlaan 17, 3446 GE Woerden, The Netherlands. All rights reserved. Printed in Guatemala, Central America. Published by Promisan b.v. For
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About the Authors Hanno van Pelt Hanno van Pelt is CEO at Promisan, responsible for setting the strategy and vision of the company and its Lead Information Architect. He is an expert at Information Analysis and the development and implementation of systems that focus on administrative areas and data-warehousing. He graduated from the Royal Dutch Military Academy (KMA) with a specialization in Administrative Organization and served in the Dutch army until 1999, holds a MS in Social Sciences at Utrecht University, a MS in Finance at NIVRA (Netherlands Institute of Chartered Accountants), and a Bachelor in Information Technology, at AMBI (Automation and Mechanization of Administrative Information).
Armin Mazariegos Armin is Co-founder and Operations Manager at Promisan, the Netherlands. His role has been crucial to the building of a top notch enterprise resource planning (ERP) system using Adobe Technologies. A former Fulbright Scholar, Mr. Mazariegos holds an MS in Information Technology and Operations Management from the University of North Carolina at Greensboro, USA and a Bachelor in Software Engineering, at USAC (University of San Carlos of Guatemala).
About Promisan Promisan started in November 2005. It is a Dutch-independent consultancy firm that specializes in providing services in the area of information management, along with development of new customized tools and technologies for select, globally renowned organizations.
Their role has been crucial for creating the versatile enterprise resource planning (ERP) system Prosis®, fully developed in ColdFusion, which has been successfully implemented by an increasing number of governmental, intergovernmental and private companies and institutions across the world .
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Introduction: What ERP is
CEOs and business administrators achieve amazing efficiencies nowadays through automatization of common processes. Modern organisations take advantage of ERPs (Enterprise Resource Planning) to achieve a more effective administration and a better use of their resources. Navigating through the multitude of systems claiming to help you can be, at best, a murky endeavor. Many require you to re-engineer your already productive business flows and administrative operations to fit glorified “industry standards”, which may later lead to other inefficiencies and delays on your ongoing production process. ERP software implementation is an important decision that business owners must take cautiously. In today’s world, there are many ideologies on how to better implement and make use of an ERP. Some companies push for ERP as a software only and forget about the social qualities and nature of it.
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ERP projects are social projects. They must be adaptable, adjustable systems that, through careful design, should accommodate to your organization and not the other way around.
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The Implementation Challenge
Administration Systems should be geared to facilitate operations Adapting to new methods is always a challenge. It would be a rare event if you made your accounting department happy by implementing a new administration system. Nevertheless, ERP Consultants should use personnel’s experience and methods as a basis for the implementation process to succeed. Their input is vital and the solutions they have devised are impossible to ignore or disregard.
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A balance between control and flexibility of operations can only be achieved through customization. Still, some popular ERP systems tend to be rigid in their nature, design and implementation. The way they see it, organisations should adapt to their architecture, rather than customize every step according to your needs. A balance between rigidity in control and flexibility of operations can only be achieved through customization. Customization can be costly, which is the main reason why organisations end up using pre-designed “Business Practices�. When they do, they realize it requires the entire organisation to embark on a tremendous effort of adapting to the system instead of the other way around. Ongoing, constant feedback from the users once the application has begun to operate is also of great importance. A successful implementation depends on users satisfaction. ERP implementation does not follow a waterfall (sequential) approach. Instead, ERP implementation must follow a collaborative approach where end-users and software consultants create a knowledge-sharing environment which takes into measure all the social, political and user-friendly factors that govern organizations.
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Legacy Unrelated Systems and Compatibility Issues
Systems should unify all aspects of business administration Many organisations use different systems for different processes. This derives from a number of unforeseen situations, commonly related to the expansion and success of their activities. Human Resources departments may use their own methods, Finances their own configurations and practices, warehouses may use another system for Inventory, and maybe even more for Logistics or Customer Service and Management.
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These systems are seldom unified and reports and other information may not be easy to access from a global and integrated standpoint. Far worse, calculations and strategic planning may be next to impossible, which directly gets in the way of achieving your long-term goals. This represents a tremendous complication on integrating information and will inevitably remain a problem throughout any implementation. Costs invariably increase on Technical Support and Development time. By uniting all aspects of administration you will make better, carefully analysed decisions, target resources to where they are needed the most, and have a closer, better management of your day to day operations.
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The “Best Practices” Predicament
There is no magic solution to administrative issues. Solid enterprises can fail by “doing everything right". Some companies success become obstacles in the face of changing markets and technologies. We can identify two types of approach on ERP systems design: sustaining and disruptive technologies. Most large companies are familiar with sustaining technologies; technologies that hold an important role in the market. Disruptive technologies may result in some inefficiencies in the near term, but they are generally cheaper, simpler, smaller, and if you are lucky, more convenient to use. They occur less frequently, but when they do, they can cause the failure of highly successful companies who are only prepared for a more traditional, sustaining approach. 10
ERP solutions fall in this situation at this time. Many popular solutions, because of old-fashioned restrictions in their core design, lack the ability to identify, and develop innovative practices, which will eventually overtake more traditional “Certified” ones. Creating a custom, experimental environment may become a complicated, arduous process, but the payoff is one impossible to disregard. A combination of both an innovative approach with some conservative discipline might yield even better results. ERP implementation must focus on human interaction over “best practices”. Consultants must observe and look for ways to improve how end-users interact with each other, share tasks and information, rather than follow predetermined, dogmatic best practices that may not fit particular work environments. CEOs and CFOs looking for an administrative solution should take a step back before seeking only to work with the big names in the industry. They may not be the best for smaller or specific industries. The art of developing ERP solutions resides in how well organizations, software and consultants can work together towards a common, well-defined goal.
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Centralization / Decentralization
Secure connectivity, anytime, anywhere Modern administrative systems have been around since the early 1980’s and a core advantage they introduced was that they allowed staff to operate closer to their designated posts, hence, vowing for internal decentralization. Later on, perhaps because of extreme security measures, a reverse tendency was started, centralizing staff and processes due to unsecure protocols.
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So, instead of having multiple, localized departments providing local, specific solutions, the tendency was to have only one central department, often located far off at company’s HQ, managing all operations. This kind of centralization approach should not be hurriedly applied. Generalization helps sometimes, but it is also, very commonly, the very reason an ERP is misused. Consider a human resource unit for a global company. The human resource unit in a third-world country might have very different rules from the human resource unit from a first world country. Hence, centralize or not to centralize? From the technical side, centralization will always win for sure. That is the easy part. At time of this writing, times have allowed us to cross the globe through constant and secure operations every day. A proper ERP solution should have a secure, reliable framework, allowing it to operate on different zip codes, currencies and locations. From the social side, ERP implementers must observe their context and be able to theorize how the software will behave on a specific environment.
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Big Bang vs. Incremental
No good solution requires a start from scratch Developers should not concentrate their efforts exclusively on selling their product. The approach of being a ‘Big Bang’ event to your company, disrespects the fact you have taken your organization to its current success. Applying a new solution of this magnitude involves a careful process of design, roles creation, report analysis, personnel training and much more. IT’s purpose is to support organisational process. Many of these workflows have been created, sometimes, through years of experience and awareness of important needs in your business. This information must be analyzed and integrated on any successful management solution. The problems with disregarding current process can be dire, amounting to an unsuccessful running of the business on implementation.
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ERP implementers must be social researchers who can learn from past lessons and mistakes and use that knowledge to implement or upgrade ERP software, following a step by step approach. This will allow organization to embrace change in a more organized and rational way.
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Continuing Support
Your ERP consultants should be accessible and helpful Many systems fail directly from incorrect or complete lack of communication between the involved parts (consultants / final users) and also from setting incorrect expectations of progress and time. A good relationship and establishing a good rapport between both parties goes a long way. Chances are you will be taking a good chunk of their time, so they better have helpful and amiable disposition for things to work. Technical support and development should be viewed as long term commitments on solutions required for complex organisations. The relationship between consultant and user is not always smooth, it can be rocky on stressful periods. However, collaborative objectives and focus must prevail during implementation.
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Benefits of a simple interface and usage
Simple and fun to use, or it won’t be used at all Data manipulation should be an uncomplicated intuitive task for final users, to prevent them from reverting back to use basic spreadsheet operations because of lack understanding or inaccessibility to information. This will also lead to a decrease on the quality of managerial decisions and increase costs across the board.
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A system should also be versatile and easy to customize, designed early in its conception to be adaptable to new workflows, users and even new emerging technologies. This in return will make it incredibly affordable since development time decreases and even more if super-user can tweak the tool adapt it to their own environment. In simple words, ERP’s must be fully web systems. They should not complicate things by adding layers, plugins, or anything in between.
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