Your industrial SME wants to deploy an ERP? We interviewed 400 factories and here are the 6 essential mistakes to avoid.

At Bonx, we visit factories every week, with the aim of closely observing the issues that industrial SMEs encounter. In a growing SME, there always comes a phase where the question arises of "deploying an ERP."

Whether it is in order to be able to track production in real time, reduce non-conformances, have visibility on margins, and more, the launch of an "ERP project" can appear as a necessary evil, a mandatory step to bring the company to the next level.

We have interviewed more than 150 industrial SMEs, and were able to gather the 5 points that made their ERP project catastrophic.

"After the company was bought from our grandfather by an investor, the latter tried to implement SAP… the result was that the company went bankrupt! So when my brother and I took over the business, we went about it gradually." — Production manager at a furniture manufacturer

Mistake #1 — Making it a project

Traditional ERPs are obsolete from the very first second your teams actually use them. Why?

Apart from Bonx, all ERPs are deployed in the form of projects of at least 12 months. Well, that is the planned duration at the outset, and it generally ends up being a project of rather 24-36 months.

In 36 months, your growing company will have evolved considerably, as will the problems you will need to solve to move to the next phase.

Yet if we consider the deployment duration of 24-36 months, between the moment you start your project and the moment you finish it, the needs covered by the tool will already be 2-3 years old.

It is also a very good way for ERP vendors to lock you in, because you will immediately need to launch new workstreams, swallowing up your IT budget in the process.

If we push the thinking further, this means that when you go with a traditional ERP, your IT is systematically several years behind current needs. I will leave you to imagine the impact that has on your company.

So do not forget, deployment "projects" are enemy #1 of your objectives. Your goal is to create impact now. Not to prepare software on a 3-year horizon.

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Mistake #2 — Considering that the ERP falls under the sole competence of the CFO and leaving them in charge of the project

Historically, ERPs have been driven by CFOs, because ERPs remain and continue to be a formidable financial, accounting, and process execution control tool. Today, the risk of letting finance drive the implementation of this type of tool is forgetting the operational needs (everything that is not financial or control-related) from the field, reducing the company's differentiation from the competition, and missing out on colossal operational gains. Financial functions obviously have a key role to play, since they are in particular your experts in terms of management, cash, and metrics, but it is vital to rely on their expertise without forgetting your core business: the factory.

Mistake #3 — Accepting ERP "Best Practices"

ERPs were historically designed around the following thesis: "All industrial companies operate in a similar manner, regardless of the company, with variations by sector of activity, and can therefore be represented in a similar way in an ERP." In short, the same mold for everyone. 20 years ago, in a world where it was enough to produce in order to sell, where the Internet did not exist, and where the volume and speed of exchanges was 10 times lower than today, this was broadly true. It was possible to liken any company to something that buys raw materials, transforms them, and resells them.

This is no longer the case today.

The reality is that markets are ultra-competitive, and therefore the slightest element that differentiates your company from another is necessary to survive and grow over time (economists call this "Creative Destruction"). Yet if you have the opportunity (or rather, the misfortune) to speak with ERP vendors, there will always come a moment when the magic words "Best Practices" appear. What does this mean? "We have not read your specifications because we think we know better than you which processes should be deployed in your sector of activity — they are hard-coded into the ERP and it will be up to you as the manufacturer to adapt." Suffice it to say that as a manufacturer, you can say goodbye to your differentiation if you use the same ERP that forces you to work in the same way as your competitor. At Bonx, you will never hear about "Best Practices," because we know that the reality is quite different today in factories. You define what you consider to be the best process for your company, and Bonx adapts to it, not the other way around.

Mistake #4 — Listening to the fear-based pitch of ERP vendors

I think that one day we will write an article with all the gems found in the sales pitches of traditional ERPs. I am thinking in particular of one of the finest of them all: "You need something solid for your company — that is the advantage of <Replace with the name of your ERP of choice>, it is solid and rigid technology, the database is not going to collapse overnight." Suffice it to say that I am waiting for the day when I will see a "database collapse" (if you have an explanation of what that means, I am all ears, because despite 15 years in tech I cannot see it). More seriously, the fact of subscribing to an ERP is generally so costly and time-consuming that vendors are forced to resort to such dubious arguments to make the pill easier to swallow. Do not be impressed — these arguments are baseless — and refer back to #1 at the top of this page.

Mistake #5 — Spending a long time writing an overly detailed set of specifications

As previously mentioned, most ERP vendors do not read the specifications, at least not with the level of detail you imagine. This is (often) not a lack of goodwill, but: what use will it be since in the end it will be up to you to adapt to the ERP and not the other way around; it is faster to have you fill in their lengthy standard questionnaires (in which case, run); it is faster to ask you the questions directly. A succinct document capturing where you stand, your objectives, which subjects you wish to resolve to achieve them, and some key information about the company's current state (production process, order taking and tracking process, differentiation) is more than sufficient to start conversations, and allows you to gain in velocity.

Mistake #6 — Not putting your operators at the center of the project

Most ERP deployments leave a very bitter taste for your operators. Why? Because they are projects driven by management, where operators have little or no say. Generally they are called upon during the duration of the project for tasks with no direct short-term benefit for them, and they only discover the full extent of the damage at the end of the project, when everything is set in stone, during costly and lengthy training sessions (which are also a good cash cow for traditional ERPs). Why would you want them to feel ownership of this new tool? Because the ergonomics of traditional ERPs are quite simply miserable for users, which is not only a permanent mental burden but also costs significant productivity (we have visited factories where the factory's bottleneck was literally data entry into the ERP).

At Bonx, we are convinced that not building your project by centering it on operators is a capital mistake. 90% of the data produced in a factory comes from production, 80% of the gains to be found are located in the workshop. And if no hands, no chocolate, then no usage, no data, no useful ERP.

By listening to your operators and involving them from day 0, from the very first phase of identifying the 2-3 key subjects capable of generating quick impact, not only will you gain in speed by addressing the real problems, but this approach will also be strongly appreciated by your operators. Your team members will be drivers of the factory's evolution and "owners" of this new solution. Since the application will have good usage, you will have good visibility on the data!

What do you think? Are you about to launch an ERP project? Do you recognize yourself? Feel free to contact us to discuss it at contact@bonx.com.