John, the CEO, is absolutely furious: “We started implementing our ERP 18 months ago and we still haven’t gone live yet. What’s going on? Call everyone to a meeting this afternoon – I can’t put up with this any longer!”
If you, too, would love to attend such an ‘inspiring’ meeting, we’ll tell you all the steps you need to take beforehand! Here are 7 lessons to ensure that your ERP project fails.
Any resemblance to existing projects is purely coincidental! :o)
1. Believing that the requirements specification is optional
The first big mistake is believing that your requirements are standard and that putting them in writing is a waste of time. Likewise, simply giving a 15-minute verbal briefing is pointless, ineffective and could even be counterproductive.
Drawing up a requirements specification is VITAL for choosing the right solution for your needs, and for defining a framework for your project.
Whatever you do, don’t skip this step!
2. Failing to involve the key users
Implementing an ERP solution is a transformative project impacting all players in the company as well as its business processes. It requires a rigorous change management approach.
To gain the support of the solution's ‘key’ future users, you will need to involve them, listen to them, and offer them real solutions that will make their lives easier.
Any enforced change is bound to fail.
3. Underestimating the workload
By definition, the ‘key resources’ in a company tend to be very busy. The business is their priority.
If these resources are assigned to the project, you’ll be taking up between 50% and 100% of their time, depending on their role and the project’s phases.
You may be able to release them from their day-to-day duties so they can fully commit to the project. Alternatively, you may choose to outsource project management, training and change management. As a result, your ‘key resources’ would only be involved in identifying the requirements and approving the decisions to be taken.
Whichever scenario you opt for, make sure you allocate time for these resources. Their lack of availability is always the main reason for delays in implementation.
4. Not trusting your service provider
You may be tempted – often for financial reasons – to take shortcuts with your ERP implementation and impose your own deployment method on your service provider. This is another trap that could cost you dearly!
Each ERP project must go through a number of set phases: scoping study, configuration, data migration, training, provisional acceptance testing, live deployment, and final acceptance testing. Your partner has experience in implementing its own ERP solution. Just let yourself be guided. “Each to their own job” as the saying goes!
Focus on more essential factors for the project’s cost-effectiveness, such as how to avoid custom developments wherever possible, and how to keep interfaces to a bare minimum while aiming to fully exploit the ERP’s functional modules.
5. Opting for a discount project
You’ll always find someone willing to significantly undercut their competitors.
As in many areas, there are no secrets in the ERP industry: an excessively low price automatically leads to one or more traps. Does the solution only require minimal effort to be deployed? This sounds dubious: you may find that you have to use the software “as is” and can’t adapt it. Is there a low subscription/licensing fee? Have you fully explored the scope of functionality? Do the companies on the client list make use of all these features? Do all these features actually exist, and are they at least as advanced as claimed?
As Warren Buffett once said: “Good jockeys will do well on good horses, but not on broken-down nags.” Keep that in mind.
6. Confusing speed with haste
Choosing an ERP solution is a time-consuming process (well, yes, it's a serious matter!) and you may be tempted to shorten the selection phase to a minimum. Don’t do this!
Take the time to check closely whether the solutions proposed are suited to your needs. Contact existing customers of these solutions to check the quality of services provided by the vendor.
Don’t focus on surface details, don’t skim over the subject, and don’t make hasty decisions, otherwise your project could turn into a disaster.
7. Choosing an ERP that enhances your CV
There are some big names in the ERP industry who are key participants in any tendering process. Choosing one of them because of their strong reputation will definitely enhance your CV and make you stand out. It's tempting and very human to do this. Others may see this as a safe option, believing that no one can criticise them for choosing an unsuitable solution “because it's the market leader”.
In most cases, both of these ‘bright ideas’ are fallacies. Wouldn’t you agree that controlled risk-taking and a totally successful project are much more impressive additions to a CV?
Keep your initial options open and make enquiries with all types of players (serious ones with a credible client list, of course). You’ll be surprised at how suitable some of these lesser-known players can be.
In short, avoid making a ‘political’ choice. Focus instead on making a strategic choice for your company!
Major projects such as ERP implementation bring changes that are difficult to carry out. According to the Chaos Report by the Standish Group, 37% of projects are aborted, while 50% end up exceeding their budget and/or deadline.
So, now you know exactly what you need to do to prevent your ERP project from failing – and to avoid John’s wrath!