Transforming ERP execution: Delivering what was promised in the Cloud era ???

ERP (Enterprise Resource Planning) implementation projects have long been heralded as essential for driving operational excellence and organizational efficiency. However, as the landscape shifts towards cloud-based solutions, the ERP industry must undergo a fundamental change in its business model to deliver on the full promise of the cloud—granting customers true freedom and flexibility. ???

The Current Landscape and its Limitations

Traditional ERP systems were built on rigid frameworks designed to optimize specific processes within static environments. While effective in their time, these models struggle to adapt to modern organizations’ dynamic and evolving needs. Many ERP implementations remain mired in lengthy timelines, high costs, and inflexible contracts, leaving customers tethered to outdated systems that hinder their ability to innovate. ??

The move to the cloud was supposed to change this. Cloud ERP promised agility, scalability, and cost efficiency, yet many vendors continue to impose restrictive practices. Customers often find themselves locked into long meetings going through requirements one after one, faced with an ocean of customization options, or burdened by escalating costs as their needs grow. This approach contradicts the essence of what cloud solutions should offer: freedom. ????

Why the ERP Industry Must Change

The only constraint to above promise of freedom is, that you need o be willing to change processes and adapt standards within all supporting and core capabilities, which will lead you to focus on capablities that have the most strategic relevance for your business.

To truly harness the potential of the cloud, the ERP industry must pivot from selling hour by the hour and focus on promoting standards and only customize within areas of competitive advantage. This is why:

1. Customer Expectations Have Evolved: In an era of subscription-based services and on-demand access, customers demand flexibility and control over their ERP systems. They expect solutions that grow and adapt with their business without unnecessary friction or excessive costs. ????
2. Cloud Technology Enables Freedom: The cloud's architecture inherently supports modularity, scalability, and seamless integration. ERP vendors must embrace these capabilities to deliver solutions that empower rather than constrain. ???
3. Competitive Advantage Lies in Empowering Customers: As more players enter the ERP space, differentiation will come from delivering value beyond the software itself. By offering freedom, transparency, and customization, vendors can build lasting relationships and foster loyalty. ????

ERP Transformation Requires Breaking Old Habits

The outdated model of delivering blank ERP systems with hundreds of customization parameters must change. Vendors often ask clients, "What would you like?" which leads businesses to recreate rigid, on-premises processes in the cloud, undermining its potential. Instead, ERP providers should:

1. Embrace Standardization and Templates: Provide predefined templates and best practices tailored to different industries to reduce the need for excessive customization. This shift supports rapid implementation and helps customers rethink and optimize their workflows. ????
2. Encourage Iterative Implementation: Advocate for minimum viable solutions to go live quickly. Clients can start using 30% of the system’s capabilities and expand gradually, gaining practical experience and identifying strategic priorities along the way. This approach ensures quicker value realization. ??
3. Move Beyond Time-Based Billing: Transition to value-based pricing models. Rely less on time-billing for customization and focus more on advisory roles, structured implementation models, and change management. This shift benefits both vendors and clients by aligning incentives with successful outcomes. ????
4. Promote a New Mindset: Encourage businesses to leave behind old habits and embrace the cloud as a transformative business tool, not just a technological upgrade. Both vendors and clients must adopt digital-first mindsets to unlock the full potential of ERP systems. ????

4 Steps to Get Ahead in ERP Project Execution

1. Split Time Between Execution and Improvement ?? Effective ERP project execution requires balancing current operations with continuous improvement. Dedicate specific time for reviewing workflows, exploring process innovations, and implementing improvements. For example, similar to Google’s "20% time" policy, allocate periods for teams to innovate within their ERP frameworks, driving engagement and creativity.
2. Set Clear Team Objectives ???? Clear objectives are essential for ERP projects. Identify 3-4 key goals that align with your organization’s priorities. For example, focus on optimizing integration processes, improving data accuracy, and enhancing user experience. By targeting a few critical areas, teams can avoid scattered efforts and make meaningful progress.
3. Engage Stakeholders Through Transparent Processes ???? Transparent communication fosters trust and collaboration. Use visual tools like Kanban boards or dashboards to track ideas and project progress. Prioritize ideas based on impact and feasibility, ensuring the most valuable improvements are tackled first. Engage team members in regular discussions to evaluate project status and next steps.
4. Follow Up and Measure Impact ???? Consistent follow-up is vital to ensuring ideas are implemented effectively. During every project meeting, review the status of improvement initiatives and measure their impact against predefined KPIs. This not only ensures accountability but also highlights successes, motivating teams to continue driving innovation.

Conclusion

The ERP industry stands at a crossroads. To remain relevant and deliver on the promise of the cloud, vendors must reimagine their business models to prioritize customer freedom and flexibility. By embracing standardization, templates, and iterative implementations, ERP providers can help customers unlock the true value of their systems. Additionally, shifting to advisory and value-based pricing models strengthens partnerships and aligns goals with customer success. The time for change is now—and those who adapt will lead the way in shaping the next era of ERP solutions. ????

???? ?? #ProjectManagement #ERP #LeanThinking #Innovation # Sprint365