Avoid Implementation Cash Traps
Mark Saywell, Managing Director of Nurxure talks to us about how to avoid the cash traps in selecting and implementing business systems.
There is growing external pressures on businesses to transform their IT landscapes; whether it is to facilitate statutory prerogatives such as Making Tax Digital; to better communicate PAYE and leverage the Coronavirus Job Retention Schemes digitally or simply to unlock greater remote working potential as part of business contingency planning.
The prima facie appeal to CFOs for low cost 'out of the box' solutions or 'quick start' implementations is clear, but these always come with a 'buyer beware' warning. Not all businesses are geared up to 'accept' an out of the box solution without considerable business change or unplanned cost. Not all system solutions are created equally. Simply because a software vendor offers you a good acquisition price, does not guarantee it is the most suitable product for your business. Just as an off the rack suit can be tweaked and tailored to look like it was made to measure, sometimes it is worth spending a little extra time and money to find the best fit business, technical (and cultural!) solution for you, not just the most appealing price tag.
Many 'Out of the box' solution providers offer quick start deals with fixed implementation consulting hours and higher 'rack rate' hours for any extras after the statement of work is signed. Data migration, technical system integration, and business change are three key cost drivers that are routinely forgotten at the point of contracting and can lead to exorbitant Change Request fees during the implementation life cycle.
Another common cash trap can occur when businesses attempt to deploy a system solely using internal resources. It is understandable that CFOs wish to keep the cost of a project down, and that is a challenge if you have a band of consultants camped full time in your office throughout a project lifecycle. Timely and strategic use of external expert advice can help avoid some of the costly pitfalls and risks that non-systems Project Management resources, or business process experts simply will not be aware of.
So how can the team at Nurxure help you? We provide high impact, 'Big 4' quality advice and guidance in affordable, strategically focused initiatives, designed specifically to help you mitigate the cash traps that 'simple' systems implementations can pose.
· Solution Scoping - many organisations fail to define their solution scope beyond 'a need to modernise our current system'. Most 'off the shelf' systems tend to do far more than your business needs. We recently supported a UK based Professional Services organisation with a Project Assurance healthcheck for their ERP implementation. Their agenda had been defined to 'deploy vanilla processes and adapting them when the system is live'. An upfront scoping exercise facilitated by Nurxure's expert advisers would have been in the order of £12,000 and could have saved the project enormous overruns totalling hundreds of thousands of pounds in lost time and wasted Implementation consultancy fees.
· System and Vendor Selection - not all systems are created equally. In the ERP world, some solutions provide greater emphasis on Human Resource and Man Management processes, others prioritise manufacturing, whilst emphasise performance in financial processing and controls. A solution provider may offer you an irresistible deal on their software, but you may find your business is shoehorned into a poorly tailored system, by an organisation that does not understand your business. Nurxure can help you source the best fit system and implementation team, assessing your functional, technical, and cultural requirements, and providing expertise based on extensive cross industry experience. Dependent on the maturity of your business requirements, Nurxure can tailor and support your procurement exercise providing light touch advice and assurance from just £1,000 per day, to a fully managed Procurement exercise from £20,000.
· Expert Assurance - a recent manufacturing client insisted on deploying their new ERP system using exclusively internal IT and Project Management resources and encountered significant challenges, postponing, and deferring their Go Live multiple times. Nurxure were engaged to provide an independent healthcheck and Go Live review.
Nurxure provided significantly more value than a simple readiness audit, providing toolkits to enable a more considered and practical approach to Go Live and diagnosing improvements to Project Management, Change Management and Project Controls allowing the organisation to take a sensible and risk managed approach, and successfully deploy their solution. The one-off deep dive healthcheck gave considerable value for just an £8,000 investment. Had the client opted to leverage a programme of regular, smaller health checks, the overall cost may not have been significantly higher, but could have allowed for time and cost savings across the whole programme, and an earlier, successful system deployment.
Systems implementation does not have to cost the earth. Spending a little on strategic consultancy can save you a lot in time, money and ensure successful business adaptation.
Author: Mark Saywell
Mark Saywell is a Business Transformation Director with Nurxure and has over 20 years' experience advising, supporting, and implementing business systems to large corporations, SMEs, and start-ups.