Over the last decade, a common concept in software development is “Minimum Viable Product”. Under this development framework, the goal is to build a product that meets the lowest requirements to justify deployment, and then expand functionality outward after users are introduced to the core features and begin to adopt the application. This approach is also referred to as “Time to Market”.
In the world of ERP implementations, time to market is a common way of thinking in the evaluation, selection, and planning phases of a project. Executive leadership often wants to get the project live as quickly as possible, in order to keep costs low and scope from spiraling out of control.
The problem with Time to Market thinking is that it often times shortchanges major functional aspects of the platform required by enterprise users to perform critical business processes or functions. In a minimum viable framework, the goal is to minimize any development around exception handling, stick to “native” or “vanilla” functionality, or whole cloth bypass entire functional areas such as returns processing or reverse logistics.
However, many minimum viable or time to market projects fail to deliver the expected benefits of short circuiting the ERP deployment process, as ignoring critical functional areas or bypassing major exception cases that occur with enough frequency create tumultuous go lives, with weeks of poor operational performance, months of accounting errors, and band aid patched together creating an uneasy rollout for users and an expensive headache for executive leadership teams alike.
ERP Implementation: Time to Value Framework
An alternative approach is to use a Time to Value framework when commencing a major project like an ERP implementation. Instead of striving to find the most basic acceptable functional requirements and handling only the critical process flows with no consideration of exception handling, a Time to Value approach takes a laser focus on what matters most, which is how long it takes for your ERP project to actually start doing real work solving problems for your business.
In my decade of experience working on ERP projects, I’ve seen projects where Time to Value = Time to Market, and other times where Time to Market might occur a year or even two before Time to Value. In other words, a basic implementation is put into place, but the requisite functionality doesn’t exist for the business to actually start driving meaningful solutions to their underlying business problems (such as business model adaption, improved customer satisfaction, or increased organization effectiveness) for another year or two after that point.
This is often because executive leadership fails to understand the depth of commitment an ERP project requires to reach time to value. It often means understanding how to handle common exceptions, digging into returns processing to ensure a streamlined customer experience, or improving purchasing accuracy through meaningful ERP analytics and data. Too often, in a time to value scenario, the core order flow, such as taking orders, fulfilling them, and collecting payments, consumes many of the budgeted resources, since this is often what customers request when approach a solution provider for a new ERP system.
In fact, while substantial differences exist within the core order flow, the underlying concept remains the same in most businesses, especially eCommerce, light manufacturing or distribution businesses: take orders, get them out the door as fast as possible, and ensure all the payments are collected as soon as you can.
Where businesses really differentiate themselves, however, isn’t so much in how they operate when things go right. All of your competitors are trying to do basically the same thing as you, which is to move product as fast as possible. Instead, its when things go wrong, and how your business handles it, that differentiates you as a provider from your competition. And that is where Time to Value plays a large role.
Whereas time to market is about meeting the minimum requirements, usually the minimum requirements are getting product shipped and paid for. Time to Value focuses on solving real business problems, which is what your business does all the time when things don’t go right. How do I let customers change orders after they have been placed, including many possible types of changes, such as payment method, shipping method, items and quantities? What happens if they aren’t happy with the product and need to get it back to you, including replacing product, returning products, or managing repairs or extended service cycles?
A typical ERP project has 80% of the budget dedicated to core transaction flows, and 20% for exception handling processes such as changing orders or accepting returns. And yet, only 20% of your employee’s time working in the system is spent on core flows, and 80% on solving real problems for customers, such as changing orders or accepting returns. ERP projects are budgeted for time to market, when a time to value approach would provide far greater impact and a more realistic assessment of the underlying impact to your business.
Questions to Ask About Your ERP Implementation
For companies investigating an ERP implementation under a time to value scenario, the real question to ask is how much time you need your own team to commit, how much budget do you need to allocate for consulting services from your ERP provider and all the requisite third party apps, and how long the timeframe is before the software starts to drive actual business value (helps your business solve real problems, like how to handle exceptions or process non-core transactions that differentiate you as a business).
An oft cited rule of thumb in the ERP industry is that for every hour of time spent solving a problem before a go live saves you two hours during a go live. In other words, properly budgeting for your implementation up front in terms of delivering value to your business can save you significant amounts of money, and orders of magnitude more stress, then trying to get it live and then figure out all the other stuff afterwards.
Valuable ERP Software & Implementation Services from MIBAR
When you turn to us, you know that we’ll help you find a solution that works for you—not for our revenue numbers. At MIBAR, we want you to find the right vendor and the right partner. This is why we want to provide you honest, straightforward advice about the selection and implementation process—because we’re confident in our work and confident that one of the ERP options we provide will provide minimal risk and maximum reward. We welcome you to get in contact with us and learn more about the selection and implementation process.