Over the last few months, one of our project teams began helping a client recover a failed ERP implementation. Like most ERP failures, this project is turning out to be an interesting and eye-opening story.
Long story short: this client’s ERP implementation has been a disaster from the start. The effort was spearheaded by an internal resource who didn’t have the right skill set. Their ERP software vendors hijacked the implementation process and got the client mired in a technological mess. They had no clear IT strategy or project governance. In a classic “stepping over dollars to pick up pennies” maneuver, they refused the help of outside ERP consultants (Panorama Consulting). They went live with the solution despite not being ready for prime time.
I could go on, but in the interest of time, suffice to say that this project wasn’t well managed. Software vendors pursued their own self-interests rather than the client’s. Internal resources thought they were far more capable than they really were. And finger-pointing among various software vendors of this best-of-breed solution ran rampant.
As painful as it is to see, projects like these can provide some great lessons for the rest of us. Here are five tips to avoid the same mistakes of this client:
1. Define a clear IT strategy and roadmap
Your digital transformation should support some sort of overarching business and IT and ERP strategy. If you haven’t clearly defined your implementation strategy and goals, then your project is doomed from the start. Ensure that you take the time to clearly define how your initiative ties into bigger-picture strategic objectives.
2. Never underestimate the need for organizational change management
In this case, the client’s sales team was hungry for a new solution, but they quickly turned on the project once it made their lives more difficult and they couldn’t figure out how to use the solution. It doesn’t matter how simple or unique your business is – or how committed to the project you think your employees are – because organizational change management will be an important success factor. Conducting an initial organizational readiness assessment is a great place to start (contact me for a sample process and deliverable).
3. If you haven’t clearly defined your business processes, then don’t even start your implementation.
In an attempt to trick themselves into thinking they were saving time, the ERP vendors bypassed the business process management aspect of the implementation and went straight to technical configuration. This is creating a ton of rework now that could have been avoided had it been done right the first time. Don’t fall for the old “don’t worry about documenting your business practices because our software will define your processes for you” trap, because it’s a complete hoax.
4. Implement strong project governance, controls, and checkpoints along the way.
Clearly defined roles, responsibilities, and escalation processes are critical to any successful digital transformation or ERP project. In this case, however, these basic project governance standards were not well defined or documented. This led to a great deal of finger-pointing and bad decisions with no checks and balances. This is a great example of how event the best software and good intentions aren’t enough to keep a project from going off the rails.
5. Hire independent ERP consultants to oversee your implementation
The ERP vendors involved in this client were like most: they were very good at technical configuration and customization, but they weren’t so good at the more important critical success factors. For example, organizational change, project management, business process design, data migration, and overall solution architecture were outside the wheelhouse of all the vendors involved. Be sure to hire independent ERP consultants (such as Panorama Consulting) to help neutralize these blind spots.
There’s no reason any ERP implementation needs to get as sideways as this one did. As the executive or project team member of your organization, you are ultimately responsible for ensuring that the team avoids critical mistakes like these – not your ERP vendors or consultants. Keep these five tips in mind and take control of your project to avoid the same fate of this particular client. It will cost you a lot less time and money, especially in the long-term.