ERP Precision Configuration – 4th Factor for Success

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I would like to discuss the fourth factor required for implementation success – “Precision Configuration” with a weight of 16%

What do I mean by “Precision Configuration”?

Case Study

The client was a medium size consulting business.

The project was the implementation of an industry vertical ERP.

All modules and all validation lists in the ERP were configured by me working in close relationship with the Project Sponsor who was Chief Financial Officer and Chief Operating Officer of the company and who fully subscribed to my methods.  He was also an Engineer.  All aspects of my approach were followed.

We developed a highly structured Chart of Accounts and a Cubic Business Model coding scheme in accordance with my methods.

The ERP ran live successfully with few hiccoughs.

Six weeks after the first full financial year of operation the Sponsor phoned me “James, this is amazing, the auditors have just left, six weeks after year end, last year they were here for six months!

“In addition they have signed off the Balance Sheet without qualifications, the first time there have been no qualifications in 15 years!

“and we did this with one less bookkeeper”

“and profits are up!

That is a typical outcome of Precision Configuration well implemented in accordance with everything that I advocate.

What is a “Cubic Business Model”

Firstly it is a highly structured  hierarchical Chart of Accounts designed from a first principles accounting and management perspective.

Secondly it is a coding scheme that models the operational locations where the business operates and the functional components of the business.  This is designed as a matrix with sections of the Master Chart allocated to individual “Function—Location” intersections with provision for “Location independent of Function”, “Function independent of Location” and “Corporate Independent of Location and Function”.   This results in an operational Chart of Accounts that is highly modular, I use a proprietary piece of software proprietary to JAR&A called “GL Builder” to ensure the rigour and consistency of the full Chart and code scheme.

The result is that every business unit has a discrete Chart of Accounts such that financial statements can quickly and easily (at the touch of a button) be generated for every unit with a high level of confidence that ONLY those items applicable to that business unit are accounted for and that ALL applicable items for the unit are accounted for.  This imposes a set of disciplines all on operational and accounting personnel with regard to accounting practices.

The Cubic Business Model can be presented graphically as a cube, see below:

Contact Me

If you find what I share of interest and desire more information please email me and I will share more detailed information.

Next week I plan to discuss the damage that is caused by failure to address soft issues and lack of business engagement – the fifth factor causing failure. 

For more information about the services I am offering please visit

Context for Reference

For ease of reference the full list of factors is as follows:

Factors causing failure
The seven factors causing failure are:
1.           Mythology, hype and tradition – 30%
2.           Inappropriate or ineffective executive custody, governance and corporate policy – 19%
3.           Lack of effective strategic alignment and strategic solution architecture – 16%
4.           Lack of Precision Configuration – 14%
5.           Failure to address soft issues, business engagement and change impacts – 12%
6.           Lack of an Engineering Approach – 6%
7.           Technology Issues – sub-optimal or defective software, hardware, network, etc – 3%
The percentages represent the extent to which each of these factors has played a part in the failed implementations that I have investigated.  It is important to note that the factors with the lower weights are still very important but that if the higher weighted factors fail it does not help to get the lower weighted factors right.
Critical factors for success
The seven critical factors for success are:
1.           Effective Executive Custody – 25%
2.           Effective Strategic definition and alignment – the Essence of the business – 22%
3.           Effective engineering solution design and implementation approach – 17%
4.           Effective Precision Configuration – 16%
5.           Effective Business Simulation Laboratory operation (war games) – 12%
6.           Effective business integration, training, change facilitation, process specification – 6%
7.           Reliable technology – 2%

From consideration of the above it will be apparent that the real issue is not the ERP product, all the mainstream products are capable of delivering a quality outcome, it is the quality of the implementation and therefore the capabilities of the implementer that are critical.
In the weeks ahead I plan to continue to share the headlines of my thoughts on each of the above and the lessons that I have learned in terms of how to implement ERP and other business system projects in a manner that ensures a successful outcome.
My offering
I offer technology agnostic services in terms of:

a. Instruction and training in how to apply these methods. 

b. Troubleshooting projects that are in difficulty and providing guidance to turn them around.

c. Strategic project leadership services achieving a high level of executive engagement and delivering high quality business relevant outcomes.

d. Guidance on “precision configuration” – a very rigorous approach to the detailed content of master data and other validation lists and other elements of the configuration.  This was a major factor in the above success, I will discuss this in more detail in due course.

e. Comprehensive robust, tender based ERP and other major systems procurement.

If you would like further information please click on the button below and we can get on Zoom to discuss.

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