It’s been several months since we published our 2013 ERP Report in which we divulged that most ERP implementations take longer than expected, cost more than expected and fail to deliver expected business benefits.
We haven’t yet fully explained the story of why these troubling statistics transpire.
Here’s a big part of the scoop: poor project planning is one of the primary culprits for high ERP failure rates. The foundation for proper project planning is a solid, realistic and complete implementation plan, which is one of the chief calamities of many ERP implementation project teams. Simply put, project managers, team members or even ERP consultants that don’t have the experience or discipline to develop a respectable project plan aren’t likely to succeed in their enterprise software initiatives.
So what comprises a “good” project plan? Here are a few tips to ensure that your ERP software initiative is built on the foundation of a solid ERP implementation strategy:
Ensure that you have a comprehensive ERP implementation project plan. Pitfall #1 in the ERP planning process is overreliance on the myopic and incomplete project plans provided by ERP consultants and system integrators. These plans are typically focused solely on the technical activities required to get the software working – an underachieving goal that theoretically doesn’t require anything but basic software design and configuration. These common plans typically do not include other critical implementation activities, such as business process reengineering, organizational change management and project management or execution of non-technical project activities. When coupled with contractual terms that place many of these responsibilities squarely on the shoulders of the implementing organization, this is a surefire recipe for disaster. In short, it is worthwhile to throw darts at any proposed ERP implementation project plans you receive to ensure that they address some of the critical success factors commonly omitted from poorly designed plans. Panorama’s PERFECT Path™ implementation methodology provides a useful benchmark to ensure you have integrated critical project activities into your project plan.
Confirm that your implementation plan is based on repeatable processes and tools. Given the complexity of ERP implementations and breadth of knowledge required to implement them effectively, no one person can possibly have all the answers on how to implement well. With this in mind, a repeatable process and toolset is critical, and there is an immense difference between a slick PowerPoint presentation overview of an implementation approach and a methodology that actually works. When assessing your potential implementation plan, it is important to ask how repeatable the process is, how well it could be executed if (and when) you experience turnover on your project team, and the degree to which it is based on implementation best practices. In other words, you should feel comfortable that while the implementation plan may be tailored for your organization’s specific needs, it is largely based on an approach that is being leveraged by dozens or hundreds of other organizations. For example, Panorama’s PERFECT Path™ technology-agnostic implementation methodology has been leveraged by organizations implementing SAP, Oracle, Microsoft Dynamics and a variety of Tier II ERP vendors.
Assume that your first draft is unrealistic. Unrealistic expectations are an undermining facet of many ERP implementations. When organizations based their budget and resource estimates on unrealistic assumptions, they typically experience a domino effect later in the project as activities are pruned and corners are cut along the way. These challenges tend to snowball out of control as the project team tries to do too much with too little, leading to an unfortunate disaster. This dynamic can be avoided by simply having a realistic view of what it will take to get the job done right. Rather than relying on sales reps’ overly optimistic predictions, it is important to benchmark against a multitude of companies similar in size and complexity to discover a more accurate estimate. Panorama’s 2013 ERP Report provides some data points that may serve as useful inputs.
A successful ERP implementation project plan won’t guarantee success but it will provide your organization with an ante or permission to play to and at least offer a chance of success. When coupled with an operative and well-defined methodology and toolset, a project plan should make execution that much more successful.
Learn more by downloading our free, on-demand webinar, ERP Project Planning.