Off the Shelf provides a platform for Retailers and Consumer Packaged Goods companies to discuss and gain insights on the pressing problems, trends and solutions.

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September 30, 2013

Why do most ERP programs fail?

 

As per Wikipedia, Enterprise resource planning (ERP) is a cross-functional enterprise system driven by an integrated suite of software modules that supports the basic internal business processes of a company. ERP gives a company an integrated real-time view of its core business processes such as production, order processing, and inventory management, tied together by ERP applications software and a common database maintained by a database management system. The definition seems to be complex and the ERP programs seem to be even more complex and challenging. We have heard multiple horror stories on how ERP programs have failed and the massive fall out of such failures

After seeing such a failure from close quarters, it made me wonder why? Most of the organizations that take this route start with a very high expectation from such programs, but they seem to lose their way when the going gets tough. In my opinion, the following are key reasons:

1.       Technology "project" vs. business transformation

This is the fundamental flaw in these programs where most of the times ERP programs are given birth in the IT department. Nothing wrong with that since the IT folks are the best judge of whether their current solution will fit the changing business needs or not. However, once the ERP program is given a shape, it has to be made a business-led program as the biggest power of ERP packages is to leverage the industry best practices that they bring. For that, business needs to be transformed. You would rather let business take the lead on this, won't you? But unfortunately, in most of the programs, this realization comes at a later stage when most of the damage is already done

2.       Indiscipline in program governance

The organizations that failed to implement an ERP package will be very quick to blame the package. But if you dig deep, you will realize that the actual reason for failure will be the way the package was attempted to be implemented. I know an organization which at the outset said they will not customize the chosen ERP platform and will change the way they do their business so that they can leverage the best practices from the package. But what actually happened was the reverse. That is because the discipline around program and change governance was abysmal.

3.       Choosing the "right" partner

I cannot stress enough on the need for the right partner and everybody realizes that. However, the SIs are to be blamed primarily for ERP program failures. The customers are not experienced in managing such large complex programs and that's why they rely on experienced system integrators. And they go to extreme length in going thru the selection process. In spite of this, the SIs do not advise the customer properly and lead them to a path of destruction. For such programs, one needs an "advisor" more than a mere "implementer". Most of the SIs do the second one very well but very few take the first role seriously

There are many more reasons and the reasons vary by context. However, in my humble opinion, the above three stand out as common reasons why the failure rate of ERP programs is very high

September 20, 2013

Social Media - How effective are they for business?

 

Until very recently, the English dictionary did not have words like "tweet". Such is the power of social networks that today, anybody who doesn't have a facebook account will be outcast and such non-participation in social media will be considered blasphemous by the modern youth. Social media has brought together all kinds of people - irrespective of age, culture and background.

Besides typical users like you and me, corporations also invest in social media to generate more business. Automotive companies promote their new cars on facebook, LinkedIn is a common tool to hire new talent and Twitter is a powerful media to broadcast your independent views to all your followers but it still raises fundamental questions. Is it worth investing a corporation's time and money in social media? Is there a solid ROI? This is not an easy question to answer- the adoption of social media as a channel of commerce or marketing varies significantly between industries and even between rivals in the same industry

But how many companies have really made it large in social media? According to a survey by "The Daily Meal", Five Guys (burgers and fries) didn't make to the top 20 most liked pages list despite all its cult-like proponents while Chic-fil-A has 700,000 more "likes" than KFC despite having only 10% of the number of restaurants as KFC. Starbucks is sitting pretty at the top of the list with more than 29 Million "likes". Though this does not always translate into number of visitors, it clearly establishes how some companies have managed to harvest the power of social media more than others.

Some of the key trends observed in reaching out to more customers through social media include building mobile websites, offering "limited- period, online-only" deals and discounts that turn visitors into customers and soliciting their anonymous feedback.

A great example of fully harvesting the power of social media is Chipotle. In conjunction with the firm's goal of going back to the basics, Chipotle's social media drives are geared towards local sourcing and local farms that exhibit consideration towards animals and the environment. Every year, during Halloween, Chipotle hosts a community-centric on-line "Boo-rito" contest, where participants upload pictures of themselves at a Chipotle Mexican Grill and winners are selected basis a combination of votes, tweets and such social media. The proceeds of the contest go towards FarmAid, a non-profit organization dedicated to family farmers. They also actively engage with their customers on a one-on-one basis for its social media platforms. In a Nation's Restaurant News study in 2011, it was reported that Chipotle responds to 83% of Facebook posts -- more than any other quick-service restaurant. Likewise, about 90% of the company's activity on Twitter is responding to customers. It clearly sends a strong message that they care about the "chatter".

 For companies, social media is not just about engaging the existing customers. It's also about converting even random Twitter and facebook users into customers. They must constantly keep themselves up to date with the latest trends in social media be it search engine optimization, mobile apps or competitor strategy. It's an iterative journey of engaging with customers to win their attention and loyalty - companies must adapt quickly, effectively and consistently to stay in the race.

September 16, 2013

"The Journey to Data Centricity" with Infosys and Unilever

Guest Post by
Frisco Chau, Practice Engagement Manager, Infosys

We jointly hosted a networking event including discussion and debate on Sept 12th with Unilever at the Infosys Experience Centre in London and were joined by Rachel Bristow, Vice President Global Media Data and Analytics as the guest keynote speaker, who gave a talk about what the journey to becoming a truly data-driven company looks like at Unilever. This high-touch forum was attended by a select group of marketing and IS leaders from retail and consumer packaged goods industries.

Our host, Peter Sieyes (AVP Head of Consumer Marketing and Innovation) emphasised the sentiment of the evening was one of openness (in shared experiences and learnings) and debate (around solutions and approach).

Rachel shared Unilever's experience from the beginning of the programme, as a formative marketing data strategy around connecting with consumers and some of the catalysts for this change, through to some of the learnings and pitfalls when it came to aligning internal and external stakeholders and implementation of the required infrastructure, process and people talent.

As a synopsis of discussions around the subject matter, as expected, the room of experienced practitioners largely agreed on the key challenges and success factors faced in their organisations:
• Clarity of business-driven requirements
• CMO/CIO alignment
• Data quality and integrity
• Finding new insights from the data (without knowing the question)
• Simplifying complexity using simple visual representations of core transformation concepts/benefits
• Talent recruitment/management

The most interesting dynamic over the course of the evening was the differing opinions on the priorities and interdependencies between these above challenges and factors.

For example, the most discussed and contentious (at least to the IS-oriented part of the audience) was whether the data infrastructure was either the most important or even first consideration to solve/implement as opposed to thinking through the "people" programmes (both internal and consumer-facing).

Another "hot topic" focused on talent and skillset. Whether it was right and realistic to recruit for or to convert essentially branding-oriented marketers (used to working on instinct and gut feeling) into quantitative data-based marketers, numerate and data literate enough to make insights-driven decisions. Or whether this should continue to be the realm of people resources outside of brand marketing (be it within the same organisation or via a third party partner).

Understandably, I don't think we managed to put to rest the world's data problems by the end of the night and invariably, the networking dinner event probably ended up raising many more questions than answers for our participants. But almost with certainty everyone walked away with a different perspective than at the start of the evening and in time, we will follow-up to see if their individual but similar journey to data centricity has taken one (or many more) steps forward.