Disruptive by Design: Lessons From a City Government About ERP
The U.S. Defense Department is implementing one of the world’s largest enterprise resource planning (ERP) systems, and the process could be going better. This is the case for many organizations that decide to adopt the software. After all, ERP software can cause network failures, resulting in significant lost opportunities and resources.
ERP software allows the integration of business management applications and automation of office functions. As a taxpayer and a steward of tax dollars, I have questioned the department’s choices of ERP software and implementation techniques. I have also studied a rarity—an ERP implementation success in a government organization.
The department’s ERP system adoption includes the armed services and various agencies and organizations, adding extreme complexity. As part of my doctoral thesis, I studied a city government in New Mexico that consists of thousands fewer geographically centralized offices and users than the Defense Department, but many of the strategies and success factors can apply to other organizations.
In my study, I sought to answer an overarching research question: What critical success factors and strategies do city governments use? I assessed the enterprise problem using Goldratt’s theory of constraints. The theory presents a five-step process applicable to all systems, which indicates potential transferability of my single qualitative case study to other organization environments, such as the massive Defense Department ERP system implementation. The theory’s five steps are to identify the constraint; exploit the constraint; subordinate everything else to the constraint; elevate the constraint; and prevent inertia from becoming a constraint. Of course, some of our most enthusiastic leaders might quip that constraints are also opportunities for improvement.
My findings revealed how the city executed a successful ERP system and exposed information other organizations can use. It resulted in five primary themes that strongly reflect professional and academic literature. The themes include organization resourcing and staffing; top management support; continuous communication to support improvement and cooperation; change management; and motivations for ERP system implementation. Sadly, many of these themes easily become strategies and factors of failure rather than success if not employed appropriately.
The first theme boiled down to the city’s budget for the projects and the resources, such as skilled people, supplies and technology. The criticality of this theme tied closely to the city’s techniques for overcoming resource constraints in an environment of tight budgets and hiring freezes.
The second theme was associated with top management support and included subthemes of consultant and vendor selection and support, among others. These themes touch on “tone at the top,” which indicates leadership’s commitment to ideas, such as internal controls, ethics and general organizational success. Participants shared the significance of top management support as factors in both failure and success.
The third theme pertained to communication and included the subthemes of transparency and feedback. During the city’s ERP system implementation, participants could identify improvement opportunities by identifying satisfactory and unsatisfactory communications and efforts to reach consensus. Transparency and feedback also emerged as increasingly positive and advantageous attributes to the ERP adoption. These subjects transcend all organizations. Information and communication is also one of five core components of Standards for Internal Control in the Federal Government, aka the Green Book, which state, local and quasi-governmental entities as well as not-for-profit organizations can adopt as criteria to design, implement and operate effective internal control systems.
The fourth theme focused on change management and included subthemes of knowledge transfer, user resistance and culture. All organizations experience staff turnover and difficulties in filling positions. But this constraint hindered efforts to maximize knowledge transfer, manage user resistance and adapt organizational culture.
The final theme addressed motivations for deploying ERP software and included the most subthemes—governance and structure, accountability, integrating and moving systems, sustainability, investment cost and savings, remediation and continuous implementation, efficiencies, return on investment, customization, and ERP technology trends. This laundry list exists in many organizations installing ERP technology. After installation, there will be training, backfilling personnel and sustaining the latest governance, structure and accountability requirements. Legacy technologies simply do not meet requirements based on costs, lack of efficiencies and modernization trends.
Organizations use ERP tools for many reasons, and failure is not a goal. The Defense Department fares no better or worse than most other ERP system deployments but could improve. Any organization can use these five themes to successfully install an ERP system.
Jennifer A. Miller is a member of AFCEA’s Northern Virginia Chapter, a cost analyst, and a deputy branch chief in the Resource Management Oversight Division of the National Guard Bureau’s Joint Staff. The views expressed here are her own.