“Worst case scenario.” Those are never the words you want to hear when starting an ERP implementation. However, implementations too often lead to moderate or extreme failure.
In unfortunate cases, these implementations turn into lawsuits. Over the last several years, we have had a front row seat to over a dozen of the highest profile lawsuits in the world as an ERP expert witness. Some interesting lessons come along with our forensic reconstruction of what went wrong in each of these cases.
Below are five things to keep in mind as you’re building – or defending – a potential legal case involving ERP software:
- A successful case begins with avoiding ERP failure in the first place. Of course, the most effective case is one that doesn’t get escalated to attorneys in the first place. Planning a project with reasonable assumptions, expectations, resources, budgets and both team roles and responsibilities will dramatically decrease the likelihood that your implementation ends up being told as a story in the courtroom. Most importantly, it is important to recognize that as the company implementing new enterprise technology, you and your team are ultimately responsible for the success or failure of the project.
- ERP failures and lawsuits typically come down to issues with people and processes – not technology. Many cases that we’ve been involved with attempt to focus on technical issues such as whether or not the software “works” or whether or not the new system could handle the data requirements of the business. However, these issues rarely make or break an implementation. Instead, these are more commonly symptoms of deeper root causes related to people and processes, such as failure to engage in effective business process reengineering or organizational change management. Whether you are implementing SAP, Oracle, Microsoft Dynamics or any variety of Tier II ERP systems, your chances of success are likely to have little to do with the software itself.
- Organizational change management is a key issue in every ERP lawsuit. Speaking of organizational change management, this is an area that is commonly one of the most important issues in a case – if not the most important. In every case that we have provided expert witness testimony on thus far, a project’s failure to address the people side of the equation is one of the key root causes of failure. Whichever side of a lawsuit you may be on, it is vital to carefully explore what may have gone wrong in your change management initiative.
- Both the implementing organization and the systems integrator are typically at fault. You typically hear two extremely different stories of what went wrong. It goes like this: company hires vendor or systems integrator. Project fails. Company tries to pin all blame on vendor or systems integrator. Systems integrator attempts to deflect blame back to the implementing company. While it takes two parties to make an ERP implementation successful, it is possible that a project can fail mostly due to the acts of one party or another.
- Recognize that ERP failures don’t happen overnight. It can be tempting to blame an ERP failure on a single, catastrophic event, but in reality, ERP failures brew for quite some time before they reach the breaking point. While managing your project, look at all the little things – which in fact are big things – that slowly kill your project. And if you have reached the point of litigation, fully analyze and understand all the little things that added up to one giant failure rather than honing in on one singular cause.
There are many more lessons to be had from these cases, but these five tips will help ensure your organization is able to build a strong case, or better yet, avoid failure in the first place.