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IT Failures are Common
Wednesday, October 30, 2013

Another year end is rapidly approaching and we have the same old stories of ERP disasters with vendors, integrators and customers all blaming each other for the problems experienced in trying to implement ERP systems.

Each ERP project starts out with such optimism that usually ends up in some form of disappointment for the implementing company.

A major problem is the conflict of objectives for the different players in the project. The ERP vendors, sales team pitches a system based on the concepts of integration and what the system can do for the buying company. Their job is to sell the software and services to the prospective customer and accordingly will put present their system in the
best light in order to achieve the sales. They may make claims on the capability of the system which may be technically correct but not achievable due to budgetary constraints imposed by the client, or other reasons.

The customer has a vision based on external and internal information, including the sales pitch, on what the company will achieve based on some form of cost justification or management expectations of an ERP rollout or upgrade. The expectations are often that the software company or their partners will deliver to their expectations.

The software company consultants or third party consultant’s job is to implement the system and get the software working. Getting the software running and achieving the company’s objectives is not the same thing. The results of an effective running ERP system is as much about how you use it as having the software running.
Poor data maintenance such as bills of materials, inventory records, routings, master schedule validity, capacity planning, time fences, delivery promising etc., can run on ERP software and will process it but the output will be incorrect. This is not the fault of the software.

The software house once the software is running has performed their function. They are not responsible for running the day to day operations of the business. The ultimate results obtained from ERP is up to the company to achieve and it takes time to obtain the benefits from the ERP project.

The conflicts that arise is a misalignment of objectives from the parties involved. There are many complaints and allegations coming from ERP projects that have poor outcomes or are abandoned. The include; Allegations of fraudulent and misrepresentation from customers aimed at ERP vendors, software misalignment, inexperienced consultants,
incompetent project management, lack of implementing company management involvement, company missing deadlines, scope creep during implementation, poor training, poor data clean-up and migration, shortcuts taken to compress the implementation time and massive budget overruns. These complaints are common place and may involve some, all of the above or other issues
that have affected the outcome of the ERP system.

Any analysis of an ERP project will show that all three parties, the software vendor, the integrators/consultants and the implementing company all share responsibility for the problems encountered. This has been termed the devils triangle and is the source of a lot of acrimony and in worse case scenarios the parties end up in court presenting their arguments and letting the courts decide the level of culpability.

The reality on the ground is the ERP project has not delivered to expectations and in some cases financially injure or even bankrupt the implementing company.

We continue to argue, based on our many years of research and involvement in integrated systems that the approach taken in ERP projects is too narrow in scope and ignores the many other issues that can undermine and bring a project undone. (see article on 26 steps)

Experience worth listening to!

Ray Atkinson