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As kids across the country begin heading their way back to school for the new academic year, CIOs and their respective organizations appear to still be getting schooled on the harsh realities of ERP implementations. In the last week, two fairly high-profile lawsuits made their way into the technology media: one involving a case against ERP software vendor Epicor and the other against Infor.

In the first case, Whaley Foodservice Repairs sued Epicor for an implementation that was delayed repeatedly, cost five times more than originally estimated, and failed to work “as advertised” after two years of use. In addition, the suit claims that Epicor’s implementation team suffered from high turnover, Whaley was forced to hire a third-party software developer to fix some of the defects, and the software was unable to provide visibility into inventory movements or handle transaction volumes.

In the second case, also publicized last week, Paragon Medical is suing Infor for a failed implementation of the company’s product lifecycle management software. Paragon was an existing user of Infor’s Visual ERP software and selected PLM8, also from Infor, to handle the document management aspects of its business. However, the suit claims that the software was not able to support the company’s business processes or requirements.

Although companies still seem to be learning the hard way, their mistakes provide some important lessons learned for the rest of us. Here are a few factors that we have often seen in our years of experience being called upon as expert witnesses during ERP lawsuits:

  • Fully understand the strengths and weaknesses of your enterprise software options. There is a dizzying array of options to choose from in the ERP software market. However, there is no perfect solution for most organizations. It is important to fully understand your business requirements in detail, as well as the strengths and weaknesses of various software options to meet those requirements. This can be accomplished through scripted demonstrations and other due diligence, but the first step is to clearly understand and articulate your requirements, as well as understand the important areas to focus on during and ERP software evaluation.
  • Have realistic expectations. It’s not realistic to expect that a software vendor is going to know as much about your business as you do, or even enough to provide an accurate estimate of the implementation duration and cost. Therefore, it is important to develop a realistic and detailed implementation project plan, resource allocations, and budget based on factors unique to your business. In the case of Whaley, the organization expected standard configuration of the software, but ended up customizing the software during implementation. We often fully blueprint a company’s future-state business processes prior to selecting a client’s software, for the simple reason that it helps uncover potential unknowns in the implementation process. This type of guidance is usually not going to be provided by a software sales rep, so you may need outside assistance from independent ERP experts such as Panorama.
  • Know what you don’t know. The above points are easier said than done, especially if you don’t have extensive ERP implementation expertise within your organization. In both lawsuits mentioned above, Whaley and Paragon appeared to have had blind spots and deficiencies in their knowledge of ERP systems. An outside opinion from independent and focused ERP consultants such as Panorama can provide the objectivity, knowledge transfer, and guidance to help identify and address your organization’s blind spots during the ERP evaluation, selection, and implementation process.

These are a few steps to help you avoid making the same mistakes that other organizations have made in their ERP failures. Learn more about ERP project success by attending our ERP Boot Camp in September. We’re holding a special Preview of our 2011 Boot Camp webinar tomorrow at 10 a.m. MT to give a taste of what to expect at the event. Attendees receive $500 off Boot Camp pricing.

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