We have all heard the phrase “time is money.” One of the main issues plaguing ERP projects is that they take longer and cost more than expected.
Often, project scope is based on simple assumptions, such as number of modules or number of users. However, these assumptions don’t consider operational complexities, resistance to change and standardization among various locations. These variables impact the duration of your project, as well.
Here are five tips to keep in mind when scoping your ERP project:
- Account for the complexities of your business. Is your business relatively simple, or is your business a complex set of business processes supporting a diverse line of products? Be sure to get an independent view of your organization’s complexity when planning your ERP implementation In other words, seek input from someone besides the person selling you the software.
- Include business transformation activities that will make or break your project. Technical activities are rarely the cause of project scoping issues. Instead, business process reengineering and change management are more likely to drive your cost, duration and ultimate success. When scoping your project, be careful not to myopically focus on technical aspects.
- Be realistic about your project assumptions. It is vital to recognize whether or not your assumptions are realistic. For example, many organizations enter their implementations with the assumption that there will be no customization. However, according to our experience and research, most organizations end up customizing their ERP software to some degree. Take the time at the beginning of your project to ensure your assumptions are accurate.
- Benchmark against other organizations. We have all heard the anecdotal stories about what to expect from ERP implementations. However, these isolated examples are rarely indicative of what the average project looks like. Be sure to look at broad data sets of organizations similar to yours to get a good understanding of what your implementation cost and duration may be.
- Watch for the “it looks good on paper” trap. On paper, it may appear that you could save millions of dollars by removing all organizational change management activities from your project plan. However, this doesn’t reflect the financial impact of employee resistance, project delays, lost sales and other common risks of failing to address change management. Just because something looks like it may save you time and money on paper doesn’t mean it will. Ensure that your scoping assumptions account for the long-term costs of saving money in the short term.
To avoid cost and duration overruns, be sure to accurately scope your project by accounting for your organization’s unique complexities. Also, don’t forget to improve your processes and mitigate change resistance.