Enterprise resource planning systems: Take two (point zero)

For as many years as anyone can remember, Atkins has occupied the number one spot in Building’s survey of the 250 largest consultants. Employing more than 16,000 staff across 255 offices, its fee income for 2007 topped £1bn. But in early 2002 it was a different story – the company was almost wrecked by an attempt to implement an enterprise resource planning (ERP) system.

ERP systems are the back office software solutions used to take care of business administration tasks such as accounting, HR, operations and marketing. Implementing such a system is a hugely complex task that can take years and cost millions.

Six years on, ERP is still a sensitive subject at Atkins, with nobody able to comment on what went wrong. At the time, industry experts put the problems down to a combination of factors. Central to these was failure to prepare adequately for the switch from its old system to the new one and the decision to do away with the old system as soon as the new one was adopted, rather than running the two in parallel. All this was done at the same time as the company was moving the staff who would operate the system, to a new “shared service” facility in Worcester.

It didn’t take long for disaster to strike. Far from giving Atkins the competitive advantage it expected, the project led to it being unable to issue invoices for work or process expenses and overtime payments for staff. For a company that should have been invoicing £3m a day, the consequences were quickly felt.

Construction warms to ERP

However the construction sector is today once again embracing ERP systems with enthusiasm, having learned lessons from Atkins’ experience. In March, Davis Langdon rolled out an ERP system to replace its existing finance, HR and customer resource management software for 2,000 users across its UK offices. Capita Group has just completed an interface for the SAP business software it recently installed, while electrical contractor T Clarke is in the process of implementing a system called Construction Industry Solutions (Coins) for 120 users. Buro Happold and NG Bailey also have ERP on their agendas.

According to Richard McWilliams, programme director of Capita Symonds’ management division, the Atkins experience was always at the forefront of its mind when it set out to implement its ERP system as part of a Capita-wide roll out. “We didn’t want to be in that situation, but the business case was overwhelming,” he says. He does, however, have some words of advice: “Take your time, don’t go big bang and figure out what your processes are before you do it.”

For big firms, particularly those that have grown by acquisition and inherited a collection of disparate back office systems, the benefits of ERP can outweigh the upheaval brought on by its installation.

Prior to implementing SAP, Davis Langdon had little standardisation in its business administration. “We have 20 offices in the UK and you could say there were 20 different ways of doing our processes,” says Chris Robinson, IT partner at the firm. “A key part of introducing the central system was that it would give us the ability to report across sectors rather than on an office-by-office basis.”

Both Capita and Davis Langdon trialled their systems before launching them gradually to all parts of the business, to avoid the pitfalls of a big bang approach. “The process of active piloting and gradual roll-out gave us the advantage that other groups had been using parts of the system so by the time it came to everyone using it, the problems had been sorted out,” says McWilliams.

Take your time, don’t go big bang And figure out what your processes are before you do it

Richard McWilliams, Capita Symonds

Another lesson seems to be to keep any bespoke tailoring of the system to a minimum. “SAP is a costly system to implement and the more you tailor it, the more it costs,” says Robinson. “Best practice says don’t tailor things too much as it adds complications.”

Capita took this approach, installing a “vanilla” version of SAP. Two years on, the company has now implemented new interfaces and dashboards for the software. This has made the system, which was originally designed for the manufacturing sector, easier and more intuitive to use.

One thing that’s clear from those that have installed ERP systems recently is that their success lies less with the technology and more with the changed management process that precedes it. “Communication, education and working through the cultural changes have been the biggest issues,” says Robinson.

More a business than an IT change

Davis Langdon spent the best part of 12 months standardising procedures before implementing the system. It’s not been without its challenges, one of which was the partnership structure of the firm which meant buy-in was needed from a lot more people, making the process much longer.

McWilliams describes ERP as a business change project, not an IT project. “It’s an opportunity to review the way your business works. It makes you ask questions and the answers make you think that there is an opportunity to use this IT project to rationalise the way you do things. Do you need a million and one ways to do time sheets or invoice people?”

Capita Symonds adopted an aggressive roll-out programme for its system, piloting, developing and implementing it in just three months. “We could have done things more gradually to give people more comfort, but there was a pot of gold at the end of the process that we were keen to get to,” McWilliams says. “I found that a lot of the noise that came out of the business change side of things was just that – noise. It quickly evaporated a week into the new system being available.”

McWilliams admits to not having been a huge fan of ERP systems before installing the system. “There was a lot of cynicism out there and I subscribed to that point of view, particularly around the time of Atkins, but I’m a convert now.”

In fact, six years after Atkins’ disastrous implementation, it would appear the impression the industry has of ERP systems has turned full circle and the business case for installing them in many companies is now compelling.