Enterprise resource planning (ERP)—Project or program?

To anyone outside of tech, the term ERP might suggest something akin to ESP—extra sensory perception. Whether ERP is a noun, verb or adjective, the acronym represents an arduous but necessary process that should lead to improved business performance. A recent group of tech managers were asked to define ERP, and perhaps it came as no surprise that most were uncertain what ERP stood for and there was no one definition that they could agree upon. Enterprise resource planning (ERP) would be easier to explain if it were a continuous process. Instead, state and local governments embark on an ERP process every three to seven years when someone determines it is time for a new and comprehensive administrative support system. Understanding the challenges inherent in ERP implementation is key to success. Conversely, ignoring the well-known challenges to successful ERP adoption is a recipe for failure. Of ERPs three letters, there is universal agreement that the “P” for planning is by far the most important focus of attention—but as a project or a program?

ERP systems are complex software solutions designed to integrate and manage various business functions and processes within an organization. While ERP systems offer numerous benefits, some staff may become frustrated by its challenges, challenges that may be minimized or avoided with careful planning. Potential ERP challenges include:

Complexity and difficulty of use: This can be especially true for those individuals who are not technologically inclined. The user interface and navigation may not be intuitive, requiring extensive training and a steep learning curve. Poorly designed or outdated user interfaces can frustrate users and make daily tasks time-consuming and cumbersome.

Lack of flexibility and customization: Since ERP systems are designed to cater to a wide range of government applications, they can result in generic functionality that may not align perfectly with an organization’s unique processes and requirements.

Disruption and change management: Implementing an ERP system often involves significant changes to existing business processes, workflows and organizational structures. Resistance to change, fear of job loss and disruptions to daily operations can lead to frustration and resistance from employees. Inadequate change management strategies, poor communication and a lack of employee involvement in the implementation process can exacerbate negative sentiments towards ERP.

Implementation issues and delays: ERP implementation projects are notorious for experiencing delays, cost overruns, and technical challenges. Poor project planning, inadequate resource allocation, unrealistic expectations, and insufficient expertise can contribute to a frustrating implementation process. If users experience a lengthy and problematic implementation, their initial enthusiasm can quickly turn into disappointment and resentment.

Lack of vendor support: Inadequate support from vendors can be a major source of frustration. Limited responsiveness, difficulty in reaching support personnel and slow issue resolution can hinder the smooth functioning of the system and create negative experiences. Lack of timely software updates, bug fixes and patches can further exacerbate user frustrations.

High costs: ERP systems can be expensive, both in terms of upfront costs and ongoing maintenance and licensing fees. For small and medium-sized local governments with limited budgets, the cost of acquiring, implementing and maintaining an ERP system can be a significant financial burden. If the perceived value and return on investment are not evident, it can lead to resentment towards the system.

Ineffective or inefficient processes: Implementing an ERP system does not automatically guarantee improved efficiency or streamlined processes. If the organization does not invest enough effort in aligning the system with optimized processes and fails to address underlying operational inefficiencies, employees may perceive such a system as more of a hindrance than a solution.

Customization and configuration: They need to be tailored to meet the specific requirements of an organization. This involves configuring the system to align with the local government’s business processes and workflows. Customization often involves modifying the software’s underlying code, adding new functionalities or integrating third-party applications.

Data integration: They need to consolidate and streamline data from various departments and business units. This requires integrating data from disparate sources, such as finance, public works, public safety, human resources and citizen records management. Different systems may use different data structures and formats, making data integration a challenging task. Additionally, ensuring data accuracy, consistency and security across the organization can be complex, especially when dealing with large volumes of data.

Implementation: Implementation is a complex and resource-intensive process. It involves activities like project planning, business process reengineering, data migration, training and change management. Implementation requires coordinating these activities, managing stakeholders’ expectations and ensuring smooth transitions from legacy systems to the new ERP system.

User adoption and training: This affects the entire organization and its users. Training employees to use the system effectively and encouraging user adoption can be a significant challenge. Adequate training, ongoing support and change management strategies are necessary to ensure successful user adoption.

Maintenance and upgrades: They require continuous maintenance, updates and upgrades to stay current and address emerging business needs. Applying patches, bug fixes and new feature releases can be complex, as they may require system downtime, compatibility testing and ensuring data integrity. Additionally, upgrading to a newer version of an ERP system can involve data migration, reconfiguration and potential disruptions to ongoing operations.

It’s worth noting that while ERP systems are complex, they offer significant benefits to organizations in terms of process automation, data integration, improved decision-making and overall operational efficiency. However, successfully navigating the complexities of an ERP system requires careful planning, expertise and ongoing support. And on-going support means having a high-level champion such as a city or county manager demonstrating their commitment and involvement when necessary.

So, given its significance, it makes more sense to simply create an office called “Enterprise Resource Planning.” True enterprise planning should be continuous and thus should be carried out as an on-going program that plans, monitors, and manages change as opposed to creating a project every so many years. Other names for such an office might be “Office of Continuous Improvement” or “Enterprise Planning and Innovation.”

Given the ever-evolving technology landscape, ERP is destined to grow in frequency and scope. One CIO, having gone through two in his career noted, ERP, if not planned correctly, will surely stand for “enhanced retirement planning!”

Dr. Alan R. Shark is the executive director for the Public Technology Institute (PTI), a division of Fusion Learning Partners, and associate professor for the Schar School of Policy and Government, George Mason University. He is a fellow of the National Academy of Public Administration and co-chair of the Standing Panel on Technology Leadership. A noted author, his most recent textbook is “Technology and Public Management.” He is also the host of the popular bi-monthly podcast, Sharkbytes.net.