Learning From Companies' Order Management System Installs

I’ve had two extensive projects with two new installations of a commercial order management system.order management system While it may raise questions about how prepared companies are as they embark on implementing systems, I think that everyone can learn from them. Let me share with you some highlights:

The first is a company with sales of $75 million annually; evaluated both Tier 1 ERP and order management system capabilities. This company selected a large scale Windows-based client server system. What were some of the issues?

  1. The vendor told them that they could accomplish the installation with its “vanilla” (unmodified system) in 6 months. But during the initial “Go Live” months had to make many modifications to keep things operational. They got through the season, but not without many customer and financial problems.

  2. The company never investigated beforehand the increased IT human resources it was going to take to support the installation. Through the first 9 months the vendor has supported them at an extremely high price.

  3. The installation is $1 million over the original estimates and the remaining 100+ modifications and changes will take several months to complete.

  4. The call center never mastered the Windows-based system before their peak season and the fulfillment was supported daily by 2-6 people from the vendor. 

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The second example is on the other end of the sales spectrum. It is a catalog and eCommerce start up doing a couple of million dollars in sales annually. Their largely manual order management system was replaced by a new system costing in the range of $40K. What were their failure points?

  1. They took the word of an industry friend, and didn’t do sufficient due diligence.

  2. The vendor is a value-added reseller (VAR) and it’s only the second install they have made of this commercial system. More than half of the time they have to go back to the developer to get information and program fixes.

  3. The software vendor has had some pretty absurd problems that have crippled this company at times. Some of these involved the eCommerce site, and has exposed customer data to risk.

  4. The vendor fixed dozens of program problems through their peak seasons. Now they are cleaning up the installation over the next month, hopefully. The client is still sorting out conversion problems and some financial balancing issues.

There is no point in going on and on. What can others learn from these two installations?

When companies put down huge sums of money, it’s because they have severe existing order management system needs. Listen to vendor promises, and add the common sense that they may be missing. Don’t move too fast without a lot of planning.

Go out of your way to do your own due diligence. Talk to as many other companies using the vendor’s system as you can about what they experienced. Do detail reference checks and learn from others.

 

 

  • Don’t short cut the selection and due diligence steps to get a discount on the systems.
  • Don’t respond to the challenge that if you don’t act now you won’t meet your conversion date. Is that date realistic based on your due diligence?
  • What support will you require when the vendor completes the conversion?
  • Realize also that when companies perform a wholesale order management system change out (“the big bang”), it is such a major change in culture and how you do business that it takes 6 to 12 months after “Go Live” to absorb the change; retrain the people that didn’t get enough attention; complete conversion clean up; and to decide how to make maximum use of the new system. What additional over the top planning will reduce risk, reduce cost and reduce culture change for your organization?

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