How to Avoid a Failed ERP Implementation

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Anyone who has been in or around the ERP implementation business for any length of time has witnessed the aftermath of a failed project.  ERP vendors won’t stay in the ERP implementation business for long if their projects aren’t successful though.  And, CFOs won’t keep their positions for long if the ERP projects that they sign off on bomb.  It’s my opinion that we all need some failures and scars in our career in order to grow, but it’s in everyone’s best interest to avoid those whenever possible.

That being said, here are my recommendations – based on many years of experience in the ERP industry – for how to avoid implementation failures:

1)      Get written requirements up front.  This can be based on a templated best practices approach, or on an approach that’s unique to your company, but written requirements are a must.  If no one in the user community can define what they need and want in the ERP system, it will be impossible to deliver a solution.  A moving, undefined target can’t be effectively managed, and – with no written requirements - that’s just what you’ve got.  Written requirements will enable you to identify and deal with scope creep and other changes in your project as well.

2)      Focus on business goals to start, not on systems.  People in your company may have been doing things one way for a long time.  However, your business goal is not about replicating how things are currently being done.  The business goal of a new ERP project is more concerned with the “why” of how things are currently being done than the “how.”  Business goals can be achieved in multiple ways, so these should be reviewed periodically, and now is the perfect time to do just that.

3)      Document business processes.  This one can be optional – but the bigger your company and the more departments involved with your implementation, the more critical this becomes.  The best way to leverage ERP solutions is to match them up – as much as possible – to your business processes.  Sometimes your processes will change due to the system change, sometimes they should change, and sometimes this will help with the decision making during the implementation.  Many companies find it to be extremely helpful to use a visual / flow-oriented method to describe their business steps and objectives.

4)      Consider your organization state.  If the organization is in a significant state of change (for example you are putting in a new system because you are spinning out of a new company, or just made a large acquisition, or  are  ramping growth very rapidly) the implementation will be more challenging.  All implementations stretch and strain existing staff.  When other factors are doing the same, you will need to plan on bringing in extra help and to expect that your project will cost more to complete.

5)      Do not accept non-involvement.  If one department isn’t available for the implementation – for example,  no one in manufacturing operations has time to be involved with the implementation of  the tool they will end up using – do not move forward to help them.  If this issue can’t be resolved by commitment from internal teams, then clearly identify this as an issue, add a budget item to the project for temporary staffing for operations (since the full-time staff is too busy to participate),  and hold them accountable publicly and on budget.  Nothing will kill an ERP project faster than armchair critics who don’t participate in the agreed-upon process.

6)      Think about systems strategically.  Customization is expensive – maybe not upfront – but certainly over time.  You need to invest in the resources to create and maintain the customization, the industry knowhow to stay current, and retention of this talent.  You will be a user community of one.  So when you do customize, make sure that it’s either minor and non-material enhancements, reporting or output-oriented enhancements, or something truly strategic to your organization.  Most companies are not competitively unique in every aspect of their business – strategic customizations should only be used for competitive advantage.

7)      Build a change management process into your approach.  This can be casual (weekly meeting with mutual commits from everyone) to more structured.  However, if you run into something that has a business impact (data will be reported differently, for example), it is best to make that visible before you go live.

8)      Remember, as the project leader, you are ultimately accountable for the success or failure of the ERP project.  Use your discretion and the weight of your expertise to say “no” when necessary.  The reality of your position is that you can do exactly what people ask you to do, but if the result is bad, you are still the one who must be accountable.  This can be extremely challenging, of course, but it can make a huge difference between your chances for success or failure.

by Bob Scarborough, CEO, Tensoft Inc.

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