Over the last several years, I have been fortunate enough to be hired as an ERP expert witness in over a dozen high profile cases. While it is unfortunate that there have been so many well-known failures in the market – many that you have probably read about in the media – it is fortunate in that I have been able to have a front-row seat to some of the most widely publicized ERP failures in recent memory.
Since the courts order an extremely high degree of confidentiality in each of these cases, I am not able to discuss or share specific details of any of the situations and corresponding facts that I have observed. However, I have found that there are a number of common threads and patterns across the various cases. These patterns can serve as extremely valuable lessons for organizations about to embark on an ERP implementation of their own.
Below are a few of the most common lessons from my experience as an ERP expert witness:
Most ERP failures could have been avoided. When you read about any of the cases that we have been retained for, you would think that it was a disastrous anomaly created by some kind of evil, external force. Surprisingly, this is typically not the case. Instead, implementing organizations and their ERP consultants more often contribute to failure through a series of poor decisions, unrealistic expectations and too much focus on the wrong activities. For example, instead of focusing on critical organizational change management and business process reengineering activities, failing parties myopically focus on the technical aspects of the implementation.
ERP failures occur regardless of the ERP software being implemented. The media is more likely to cover failures and lawsuits related to SAP and Oracle, simply because their clients are more likely to be the high profile, Fortune 500 types. However, when we have looked for patterns among publicized failures across various ERP vendors, we have not been able to find any meaningful correlation between software implemented and failure rate. In other words, your project is just as likely to fail whether you are implementing SAP, Oracle, Microsoft Dynamics or any other software solution. Rather than pointing to your specific software solution to determine your likelihood of success or failure, it is more effective to look at the way that your software is being implemented.
Most failures can be traced back to unrealistic expectations. In each of the expert witness reports and testimonies that I have provided in these cases, I identified unrealistic expectations early in the project as a root cause of many problems later on. Beginning a project with unrealistically low time, money and resources leads to a series of bad decisions and cut corners – and those decisions are what lead to failure. For example, when operating under a severely compressed timeframe, project managers are more likely to cut organizational change management, training, testing and other key activities that are likely to make or break the implementation. When reviewing proposals from your software vendors or system integrators, it is critical that you question assumptions and add a dose of reality before staking your career on them.
I don’t know that ERP implementations will ever have a zero probability of failure, but our expert witness experience has helped us learn enough to create an ERP implementation framework and approach that gets our clients as close to zero as possible. By looking to the mistakes of others, we can all plan and execute our projects in a way that make us more likely to succeed.
Learn more by registering for our upcoming webinar, Confessions of an SAP Expert Witness.