Why Your ERP Consultant Must Be a Domain Expert
ERP projects can fail for a variety of reasons. One of the presumably underrated by highly-critical questions that arise from such failures is whether organizations are choosing the right ERP consultant to implement their project.
It’s noteworthy that over the years, ERP projects have undergone a massive transformation with the mainstreaming of SaaS-based ERP and hybrid offerings.
Have ERP consultants adapted smoothly to the latest developments? Beyond their expertise in ERP technologies, can they bring business domain expertise to the table? According to most ERP experts, many ERP projects have failed “because the chosen partner is coming from a different industry” and “required too much time learning the business before they could get around to actually delivering value.”
Additionally, organizations implementing a cloud-based ERP solution often need to modify their business processes to fit their ERP tool. Do organizations need ERP consultants that are also business domain experts? Here’s a detailed outlook.
What is Business and Domain Knowledge?
To understand the value of domain expertise, consider the main purpose of any ERP project. An ERP implementation is all about merging and integrating data and processes from various business functions (or departments). Effectively, organizations have adopted ERP tools thanks to their ability to coordinate day-to-day operations among organizational departments.
Hence, ERP is primarily a business tool that provides real-time information for improved decision-making. For instance, ERP systems in the manufacturing domain serve to share data between various functions, including production, procurement, accounting, and supply chains.
In addition to functional and technical knowledge, successful ERP consultants also possess the following knowledge skills:
1. Business Knowledge
Many ERP consultants shift across multiple industry domains before taking up consultation services. Consultants with ample business knowledge have wide exposure to the problems and challenges within an industry domain (for example, procurement-related constraints in a pharmaceutical company). With this knowledge, they can identify and mitigate potential issues when serving as an ERP consultant for a customer in the same industry.
Business knowledge skills enable consultants to:
- Understand that different industries must adopt different solutions to address the same problem.
- Identify technology solutions customized to each industry requirement.
2. Domain Knowledge
Besides business knowledge, ERP consultants need domain knowledge in organizational functions like accounting, purchases, sales, finance, or accounting. Domain knowledge enables them to identify difficulties and resolve them manually or through automation. With this type of knowledge and relevant experience, consultants can help organizations identify and resolve critical business problems.
Next, let us look at the capabilities that ERP consultants (with business & domain knowledge) deliver to successful ERP projects.
Capabilities of ERP Consultants with Domain Knowledge
Essentially, ERP consultants with domain expertise offer the following capabilities:
- Define the overall ERP project scope and implementation plan.
- Understand the existing business processes and how to streamline them to be more efficient.
- Validate the business requirements accurately.
- Create improved coordination between the business and technology teams.
- Recommend the right ERP solution for addressing each business problem.
- Recommend ways to reduce ERP implementation costs.
- Leverage their soft skills to drive change management across the organization.
Here is why business and domain knowledge are essential for ERP consultants:
- Going by its name, ERP is all about planning for enterprise resources like human resources, capital, machines, and material. Consultants can acquire these skills only through domain experience.
- Without deep knowledge of the existing business processes, ERP consultants cannot offer good advice to their customers. They will find it challenging to streamline business processes for ERP without knowing how these processes are designed at present.
- Efficient ERP consultation is also about integrating various functions (for example, sales and accounting). A successful ERP implementation requires seamless integration and how best to achieve the desired outcome.
- ERP consultants cannot recommend practical process improvements without domain expertise. This includes understanding the pros and cons of each business process.
Next, let’s discuss why domain expertise is necessary for successful ERP implementation.
Stressing the Importance of Domain Expertise for ERP Implementation
Most ERP projects fail as ERP consultants possess only technical and functional knowledge. While these are important, they are insufficient to implement an ERP project. As explained before, ERP consultants must possess both business and domain knowledge to provide effective consultation to their clients.
Problems arise when ERP consultants try to gain their business and domain knowledge from the ERP system.
Here is what ERP consultants can do to improve their domain knowledge:
- Listen and learn from various business process-related discussions.
- Read process-related documents and guides to get a clear picture of data transactions.
- Identify the bottlenecks and limitations of the existing legacy systems and applications.
- Maintain a knowledge repository of “lessons learned” from completed projects so that they are used in future projects or similar industries.
In summary, business and domain expertise is crucial to the success of modern-day ERP projects. With relevant domain experience, ERP consultants can avoid project pitfalls and deliver according to business requirements. Besides their technical knowledge in ERP tools like SAP or Oracle, organizations must ensure that they partner with ERP consultants with years of business experience.
At Clear Thought Solutions, we hire ERP consultants proficient in technical and domain-related skills. With our domain expertise, we can guide our customers toward a successful ERP implementation.
If you are looking for a technology partner for your next ERP project, we can help you out. Contact us with your business requirements.