How to Avoid ERP Implementation Failure

Best Practices To Steer Clear of Implementation Failure 

The media consume some of us. It is here where you will read or hear of countless stories on botched ERP projects. Who is suing who this week? Don’t panic, and certainly don’t believe everything you read. It’s more likely the media only report on ERP disasters!

Take examples from 360 Cloud Solutions who talk of Hershey and Nike implementation failures, amongst others. What are the leading reasons for a project not going to plan?

• Problems with integration
• Not enough testing
• Being overly ambitious
• Not scoping out requirements correctly
• Cost considerations of both time and money
• Issues with data quality

There is a difference between things not going to plan and the plan going completely wrong. Failure doesn’t usually happen overnight. It’s a result of an accumulation of things, which we will refer to as root causes. From our experience, we have determined recurring root causes of ERP implementation failure as:

• Poor project management
• Misalignment
• Choose the appropriate methodology
• Bias

Bias

Whether you choose your new business systems independently, through a vendor or with the help of a consultant, it is essential to fulfilling a purpose. What does this mean? Let’s consider you’re working with a vendor who is partnered with a software author; then they are going to be more likely to recommend that software, sometimes regardless of whether it is suitable or not. Likewise, a vendor sells several app integrations to complement the system. The vendor representatives aren’t going to recommend other products over its in-house products, again even if the products are not of the best suitability.

Yes, take recommendations as otherwise how else will you make a final decision? However, please ensure you do your research to make an informed decision. Seek advice from current users of the software, read reviews, demo with your company’s data – don’t always accept a trial with test data as this won’t necessarily reflect the businesses operations. In a crowded market where there is a lot of choices, we want to ensure you make the one that’s right for you.

Misalignment

Is each department working towards the same goal? Is each employee clear about the company objectives? According to Workamajig, only 55% of people involved in projects – team leaders and project managers – feel that the project’s business objectives are clear to them. Kicking off a project like this is like taking a hike without the right attire or a map. Your people have no idea where they are heading or how to get there. The purpose is critical on any project, ensure people know their use but also that of the team or ‘group’ as a whole. As a result, you will all be working to towards the same outcome.

There is also external misalignment which can affect a project – are the external resources you hired clear of your expectations? If not, you might not only end up footing the bill but also with a business system that is not fit for purpose. If Sales love the new system, but it adds no value to the Marketing department, who is going to be more likely to accept new ways of working? You need to ensure the software you choose compliments each part of your business you want to optimise.

Poor Project Management

A project manager can make or break a project regardless of whether you’re working with internal or external support. There are endless characteristics to look for and to avoid. In terms of ERP project management, someone who possesses a combination of qualities below is crucial:

• Experience
• Knowledge
• Ability
• Leadership
• Flexibility

Founder of PMWorld 360 Magazine, Moira Alexander states ‘from the hiring stage to project execution, all too often project management offices have focused time and energy on primarily technical aspects of project execution. This focus on primarily technical job-related activities can leave a gap in areas like soft leadership skills’.

A focus on technology might help to change your processes, but it won’t help you to understand them. As a team, you must ensure you fully scope out where your business is now, where you want it to be, and how to get there. Unless the team are clear that these questions have had a response, don’t progress until they are. You could end up with a poorly managed project either because you hired a poor project manager or, and most likely – you didn’t express your businesses requirements fully, and gaps were formed in the knowledge of the consultant. If you don’t tell them, who will?

Remember that people are at the centre of any business project you undertake. You may have change management challenges to contend along with way. If you lead with time constraints and budgets at the forefront, likely, your stakeholders won’t be impressed. To maximise the potential of your project team and staff, it’s up to you to make them feel involved, and communication is key to this. It’s easy for a project to deviate from its original scope when project managers aren’t discussing additional requirements and change requests with the project stakeholders.

Choose the Appropriate Methodology

It would be best if you chose from either the Agile or Waterfall method. Selecting which approach, in most cases, is governed by the mind-set of the project management team. If there are clearly defined requirements and we know that there will be not many changes involved, then we may select Waterfall. If time is an important consideration, then you may opt for Waterfall over Agile, purely because the deadlines are decided in the early stages. Also, Waterfall is sequential, meaning that “phases” of the project need to be completed before the next one starts.

In comparison, Agile ERP Project Management offers flexibility while still encompassing controls and procedures. Agile recognises that the key to successfully managing projects is to divide them into stages, plan each step in detail while maintaining flexibility about subsequent stages. If we are not clear on the need and we understand that the scope of the project can change at any given time, we would want to be as flexible as possible, going with the Agile approach.

We would recommend a flexible approach to any business implementation project as we know that businesses demands and goals change so quickly these days. Businesses cannot afford to spend months designing the perfect business system only to find the scope is not the same as it once was. An Agile method builds minimum viable processes and deploys them quickly, intending to test the results against the old procedure. Mistakes and modifications are spotted rapidly, and any amends made quickly.

Ok, What’s Next?

The most effective way to avoid failure is to get it right the first time. This statement is not necessarily accurate for a business change project though, especially a new software implementation. The key is to adapt and prepare your team to be adaptable. The scope of a project will never be the same at the end as it was, to begin with. So long as you choose the most suitable method, keep stakeholders informed on progress, manage change, you are not easily influenced, and business value is held at the centre of the agenda then you can avoid project failure. Don’t always believe what you read. Project failure is easily avoidable.

We hope that the points we have made are clear and help you to make a more informed decision when you next need to take on a new project. For further tips on ERP Implementation, click here.