My last blog covered 10 things that contribute to ERP failure or success. After reading this list, you may wonder what you can be doing differently to ensure your ERP implementation is successful.
Most poor decisions made during a project don’t become evident until later – often after it’s too late – so it’s important to recognize some of the risks and common pitfalls that less experienced practitioners often fall prey to. With a solid understanding of these risks, you’ll be able make more effective decisions that are more likely to lead to success and are less likely to undermine your ERP initiative.
Below are five decisions that may be jeopardizing your ERP implementation without you even knowing it:
1. Lack of Focus on Organizational Change Management
Sometimes no decision can result in a poor decision, as is often the case with organizational change management. Executives and project teams don’t always recognize the need or importance for change management. Worse yet, some decide not to invest the time and resources required to ensure that this critical success factor is properly addressed. If you’re not actively focusing your team and resources on organizational change and its impacts, then your decision is actively undermining your chances for success.
2. Deferring to ERP Software to Develop Your Future State Business Processes
While detailed transactional workflows will largely be dependent on the software being implemented, it is a mistake not to define your desired business processes and workflows to some degree. If you think about your business processes in the context of how they should operate regardless of technology, it will give you a clear direction on how your new software should be configured and implemented. Most modern ERP systems are far too flexible to assume they will provide a “silver bullet” in defining your future state processes.
SAP vs. Oracle Case Study
SAP and Oracle both invest heavily in cloud technology. However, our client was skeptical about cloud scalability and unsure if the products were mature and proven.
3. Relying too Much or too Little on Outside ERP Consultants
Some executives and IT heads assume they can handle these sorts of ERP and digital transformations themselves. Others assume they can completely outsource the initiative to outside ERP consultants. Either extreme is ill-advised, so it’s important to find the right balance. You need to leverage outside help along the way, but you also need to ensure that your team owns the project and its results. This is the only way to ensure a sustainable solution that doesn’t require consultants for the long term.
4. Failing to Implement Formalized Project Governance and Controls
ERP project governance and controls are at least as important as the project manager you put in place – if not more so. These controls ensure that the project team stays focused. There will be requests that increase scope (think customization requests) so the management of time and cost must be deliberate ensuring the project stays on track for the long haul. This should be included as part of your charter during the early stages of your transformation.
5. Sticking to Hard and Fast Budgetary and Project Timeline Expectations
To use a common saying, “executives are often guilty of stepping over dollars to pick up pennies.” In other words, they focus too much on containing short-term implementation costs, even if the end result is higher long-term costs after implementation. This risk is further complicated by the fact most budget and time estimates are unrealistic or arbitrary to begin with, so adhering to them can be extremely risky.
Making good decisions also requires a strong diverse project team with skill sets that complement each other. Forming a winning team takes thought and commitment. I once worked alongside a project team that recruited team members by specifying that they only wanted internal members that would be “desperately missed” by their departments. Their goal was to form an “A” team. This initiative had project team charter and had planned for backfilling. You have often heard me say that ERP initiatives should not belong only to the IT department.
In this blog we’ve talked about some of the decisions and details that will be crucial to the result of your project. While executive oversight is imperative, adding the outside perspective of an independent consultant is a best practice to help alleviate risk while adding knowledge.