This is a question that every now and then drives me nuts, and only few times is cristal clear.
So why is that. Why does an entrepeneur say, on a late sunday afternoon, I will invest a 6 digit figure of my retirement money in ERP.
First, let's define an entrepeneur. In Dynamics NAV and most ERP applications we have many types of customers. A lot of customers are large stock companies where we implement Dynamics NAV in a department or they are government or not for profit organisations. But we have to admit, the larger part of our customers are entrepeneurs. One, two or a couple of people who have managed to start or take over a company that is privately owned and making money doing hard work.
When an entrepeneur invests in ERP, they invest their own, private money in computer software that (supposed or should eventualy) make their business run better.
And does it do that...
I have seen hundreds of Navision implementations and honestly sometimes... I wounder. Yes, I am sure that in some cases ERP really makes a big difference. Once a company has taken that step and it really works. But often... I just don't know.
So what does it take to make it a succes. Do you want to know my guess?
If not, then navigate away from this blog entry, Please do...
In my humble oppinion it's a peoples business. The people that do the project determine the success of the implementation. Sure, it matters what ERP you buy, but the people are way more important.
And, that's a funny conclusion, you know why... I'll tell you. Or at least my opinion to it.
Making a business grow is something that has been existing in the mind of every entrepeneur since the dawn of civilisation. It has been tried by the chinees, egyptians, greek and romans and then we fell into the middle ages.
But we recovered, somehow, and started someting about a 100 or more years ago that had been known as the industrial revolution. With steam power and later electicity we have started mass production.
This mass production has given new input into our entrepeneurial desire to grow.
For years we have known a culture where towns had shops with private owners. Entrepeneurs that just tried to survive. The concept was simple. Purchase something and sell for more. Use that "more" to make a decent living.
So what happened. Did this form of being an entrepeneur die? What changed... why does every shop in every city these days have the same name, brand or whatever you name it.
In older times we had something called the Journeyman. In Dutch, een Gezel. A Journeyman would be employed by a master craftsman do be educated to be as good or better than the craftsman, The craftsman could only educate a few Journeymen or Gezelles in his livetime.
My guess is that even though we want to, so badly, this priciple has not changed. I have trained douzens, hundreds of people in the NAV channel and only few stand out. Only few have this cappacity to grow to being a new craftsman and teach new Gezelles.
This limmitation of us, human beings, limmits the number of successfull ERP implementations.
Agree? Not? Ok. Let's asume we agree.
Let's asume this is a rightfull conclusion. Let's asume that successfull ERP implementations depend on people and the number of people who can implement is limmeted by nature. (Assumtion "Big One").
Then what do you think that happens if there is a successful implementation. An implementation where a company starts working more efficient, where a company grows after an implementaion. Where an entrepeneur makes a better living than before the implementation of the ERP software.
The logical evolution is the link between the ERP implementation and Success. Entrepeneurs will think that by implementing ERP they can be successful. And they will start to invest. The first who invest will be the lucky few, they will catch the same people who are just finished implementing ERP at the successful company.
But then more and more requests come in...
Hmm... what to do....
What happens is this...
These people who were succesful in impelementing ERP for entrepeneurs start being entrepeneurs themselves
The logic behind this is easy. I hire someone to do the same I do. Classical model. Craftsmen, Gezelle.
But there are only few Craftsmen, and few succesful gezelles. So what happens is that Craftsmen start to try to educate to many and less qualified gezelles.
Time for the first conclusion.
ERP is a peoples business. The people will detimine the success.
But is this the final conclustion. Maybe not.
The orriginal question of this blog entry was. What drives an entrepeneur to invest in ERP.
What if the successful ERP implementation was not as succesful as we think.
What if that company where we first implemented ERP was not successful because of ERP. Think of it. What if that comapny was successful DESPITE of ERP.
If that was the case the company where we were so succesful would have also grown without us. That would mean that other companies started investing in ERP for a wrong reason. ERP is not a reason for a company to grow. It is nearly a nessecity. If it is that.
That would change our initial question into a new one.
"Is investing in ERP a nessecity to grow."
And with this question, dear reader of my blog, I leave you thinking.
PS: Don't forget, if you still think ERP is intersting for you to buy my book.
Joe, go ahead. It will be appreciated.
I will be at Directions as well. See you there!
I agree with your response and enjoy reading your blog. Do you mind if I mention your blog as a great resource during a presentation at Directions US? I promise to mention your book. :)
I think we are on the same level here.
Technology is just something that helps. Before I did Navision, Excel was my best friend.
Moving my skills from Excel to Navision magnified the quality of the solutions that I created
Were peope (entrepeneurs) go wrong IMHO is that they invest in software for the brand, not looking at the people behind the solution enough.
What then happens is that they blame Navision to be wrong. I often go to these sites as escalation engineer and almost always people made wrong decisions with good software.
If I understand your premise, it is that technology MAY be a necessary, but is not a sufficient condition for success as an entrepreneur. Furthermore the most likely success factor in an ERP implementation is the people that are involved.
Am I characterizing this correctly? If so, do you agree that it may follow that the proper (or improper) use of technology might magnify the qualities (good or bad) of the individuals that created and use it?
The belief that the money spent will either increase profits, reduce cost, or mitigate risk sufficiently to overcome the alternative costs of the investment.