Almost all project management disasters have a common pathology. Even if the participants are well-intentioned, the same issues surface in the after-action reviews of failed projects. Poor project management is composed of seven common sins that organizations should review before and during a project to avoid ERP failure.
Envy. The first deadly sin is a weak software evaluation and selection process. Organizations often select ERP software based on price, professional/personal relationships or envy (e.g., “That’s what our competition uses.” Weak software selection usually stems from poor requirements definition, a misunderstanding of software functionality or poor role definition between client and vendor. While most failed ERP implementations have other more severe issues than those related to software, poor software selection is often a contributing cause.
Pride. The second deadly sin is having unrealistic implementation expectations. ERP implementations always seem to take more time and money than initially planned. If the implementation is complicated by multi-site or multi-organizational requirements, reigning-in expectations is vital. Clients and vendors often lie to themselves and say, “Our ERP solution will be 100% ‘out-of-the-box’ with minimal training and no software configuration or customization.” While this is a way to slice time and budget off the project, a sober and stern assessment is critical to shaping expectations.
Avarice. The third sin on the road to perdition is unclear business requirements and greedily defining requirements by site rather than across the organization. Disastrous projects usually follow a predictable path so heed the warning signs before it is too late. Business processes need to be consistent, locked-down and agreed upon across the organization in the early stages of the project, for it is the foundation of the hard work to follow.
Sloth. The fourth sin is a lack of executive sponsorship. If the executive team is taking a hands-off approach and pushing responsibility down without authority, the project is destined for failure. Without executive participation, decisions are slow or nonexistent. An ERP implementation without strong leadership tends to have infighting and internal misalignment.
Gluttony. Too much customization is a bad sign. A good rule of the thumb is that your organization should not have more than 10-15% of its requirements as customizations. You want to implement ERP, not create your own custom software.
Lust. Poor risk management takes the number six spot and never is absent from a failed ERP implementation. Struggling project teams tend to have overly optimistic (lustful) goals and nonexistent mitigation plans or risk management because there is no room for these items in their scope, milestones or go-live dates. When the go-live approaches, the team is left with an untested system, inadequately trained end-users and a preoccupation with going live despite assumed risks. An ERP project team should expect things to go wrong and take longer than originally planned. Although your project budget and timelines may move to the right, it is a much more palatable position to have the time and money to deal with issues rather than having zero project safety margins.
Wrath. The ugliest stepsister of the seven deadly sins is poor or nonexistent organizational change management – resulting in end-user wrath. Hardnosed executives may dislike organizational change management and dismiss it as “touchy-feely” or “paying for hugs,” but this could not be further from the truth. Change management is the foundation and scaffolding that supports leadership, both vertically and horizontally. It prepares the users for the inevitable change and helps answer the question, “What’s in it for me?” A lack of change management not only breeds friction or outright resistance, but often leads to excess customization and a poor understanding of project goals. Of all the tools in the ERP Devil’s toolbox, poor change management is the nastiest knife in the kit and inflicts the most damage.
While it is tempting to heap all the blame on the project manager, a failed ERP implementation has plenty of blame to go around. With indifferent executive sponsors, disinterested or disenfranchised project team members and overzealous budget cutters, it is not uncommon for a project to fail.
A failed project is not a complete waste of time. Often the lessons listed above are burned deeply into the psyche of team members and are not repeated on future projects. As a wise man once said, “Most people learn from bad experiences, but wise people learn from other’s bad experiences.” Avoid the seven deadly sins of poor project management and you will save your project from failure.
Learn more by watching our on-demand webinar, How to Spot ERP Implementation Warning Signs and Integrate Quality Assurance Into Your Project.
Written by Rich Farrell, Senior Manager of Client Services at Panorama Consulting Solutions.