There are many reasons why ERP Projects either succeed or fail. However, the reasons can never be attributed or reduced to only one or two factors. It is also rarely about the technology and more often about the way the technology gets implemented.
On the surface, it may look like the ERP Project is failing is because:
- There is insufficient budget to complete the project.
- Staff are stretched for time and there are not enough resources.
- There are high costs associated with the amount of organisational disruption.
The above reasons are all enough to move a project from amber into red and for the Steering Committee to pause or stop the project, however, it is the underlying symptoms of the ERP iceberg that will need to be addressed if the project is to succeed.
Underlying Symptoms
There are common patterns that can be observed in projects that succeed and projects that fail. The symptoms underlying the reasons why projects fail usually include:
- Lack of Active Executive Engagement – complex ERP projects require proactive leadership and support
- Insufficient Integration Planning – underestimating the need to retain and integrate legacy modules or application
- Too Much Complexity and Unclear Requirements – leads to issues with scope and budget.
- Poor Project Management – lack of control without a comprehensive and detailed project plan.
- Unstructured PMO and Governance – lack of collaborative portfolio planning and use of shared resources.
- No Detailed Strategic Information Systems Plan – resulting in an incomplete or missing portfolio view.
- Minimal Focus on Change Management – underestimating the training and communications required and the changes to job roles and responsibilities.
- Inexperienced Project Team – without the right training, support and mentoring of resources.
- Underestimating Master Data Management – critical for accurate data conversion and business process flows.
- Lack of Business Ownership – minimal accountability for what the solution will deliver.
Corrective Measures
The most successful ERP projects adopt foundation principles that will ensure the solution is delivered as efficiently and effectively as possible.
The key is to start early with your planning and ensure that there is a structure in place that addresses the key risk areas around your specific business and process requirements, change management, technology adoption and cost visibility.
Ensure you have the following commitments in place with the business.
- Executive Engagement and strong leadership to promote a genuine interest in the success of the project.
- Attention to Detail particularly with scope definition, legal and commercial documents.
- No Surprises Policy by managing expectations with milestones at short intervals to demonstrate delivery and to build confidence.
- Experienced Project Team using the right resources and back filling, wherever practicable.
- Comprehensive Vendor Communications to ensure everyone on the project is working towards a common goal and you understand who is responsible for what.
- Strong Project Management Methodology with a focus on tight scope, budget, and timeline control.
- Collaborative Planning with a focus on work streams or parallel projects to meet timelines and complete tasks by due dates.
- Business Ownership of the Outcomes with an emphasis on accountability, mentoring and skills transfer within the team.
- Experienced Project Team using the right resources and back filling, wherever practicable.
- Commitment to Change Management and reinforcement for users to adopt changed business practices.
- Proactive Risk Management by monitoring, escalating, communicating, and reporting risks across all areas of the project.
- Governance and QA with formal approval points and a focus on earned value throughout the project life cycle.
- Start Work Early on Master Data, allocate and train staff on data clean up and conversion planning.
