I have seen it time-after-time. A new ERP Implementation in the waiting, Executive Sponsors selected, Steering Committee in place, Project Managers ready to manage, Core Team ready to dive into the trenches, Project Plans firmed, caffeine charged Technical Consultants prepping the environment And functional consultants ready to inspire and guide the client to new heights of best practices.
Then the Value Assessment reveals that by taking advantage of new functionality lacking in the clients legacy ERP system, or slight changes to business processes, that an exponential gain can be made in efficiency, staffing, throughput, inventory reduction, or one of the many other business metrics companies use to determine success. The Consultant imagines the response from the Steering Committee Members and Executive Sponsors will be pure elation, and the Core Team, well, the consultant is hopeful that the elation of the project sponsorship, coupled with the thought of a potential reduced workload post go-live will be sufficient to get them through the long hours they will dedicate to the project. But too often this isn’t enough.
The Halo Effect was first observed in the 1920 by Psychologist Edward Thorndike 1. What he observed was that in evaluation, military leaders who rated high on physical characteristics, tended to rate the same subordinate high in intelligence characteristics. The theory has since been extended beyond the field of psychology to organizational theory. Apple products are a fine example of the Halo Effect, because the iGeneration, Millennials, bought the iPod and it was so wildly successful in displacing physical media in favor of electronic media, every product Apple developed thereafter was granted the same status, regardless of true capabilities or actual user experience. 2
But, how does the Halo Effect creep into your ERP System? Well, it usually wells up from the bottom line, with executive sponsorship announcing, “We have great margins” or “we control the market”. Or the Core Team announcing, “Our Inventory turns 8 times in a year” or “Inventory accuracy is at 95%”. Because of the relative success based on these business metrics, companies may be hesitant to change, desiring to transport business processes as is into the new upgraded system or newly implemented system. Rather than truly evaluating each business process and determining which process should be kept or re-engineered individually. Here the metrics used to rate the organization may be causing a Halo Effect on all other processes. We do well with margins; therefore our selling price must be correct, regardless of what the market might bear. We turn inventory 8 times, therefore we must be purchasing as efficiently as possible, and so on.
I am not sure who said it first but, “if you’re not growing, you’re dying” has been a phrase I’ve used often in Infor CloudSuite Industrial (SyteLine) ERP implementations and upgrades over the years. It has been my experience that when implementing or upgrading ERP Systems, the Customers’ ability to strip away all preconceived notions of relative success and take a start-from-scratch approach have had the greatest success.
David Brooks, New York Times Op-Ed columnist and Author of “The Social Animal” observes that introspection and the understanding that we don’t and can’t know everything can result in a more open attitude towards new ideas and change. Brooks writes, “People with this disposition believe that wisdom begins with an awareness of our own ignorance.” 3
So mind the Gap as they say in the United Kingdom because, there is always a gap between your legacy system and a new or upgraded system. Be aware that Infor CloudSuite Industrial (SyteLine) ERP is unlike any legacy ERP system you are using today and be ready to challenge all of your preconceived notions about what software can do and about what your users can do, challenge the conventional wisdom, and achieve great success.
1 Thorndike, EL (1920), “A constant error in psychological ratings”, Journal of Applied Psychology 4 (1): 25–29, doi:10.1037/h0071663 .
2 Gomez, Wil Apple, “The Mac, And The Halo Effect”, Tuesday, March 31, 2015, From Mac360.com.
3 Brooks, David, “The Structures of Growth”, June 19, 2014, from brooks.blogs.nytimes.com.