ERP Problems Continue to Plague the Industry
Monday, February 25, 2013
Despite all of the information around about ERP success and failures too many companies are embarking on ERP projects ill prepared to meet the challenges facing them. The latest data continue to show the majority of projects being delayed, cost over-runs, shortcuts taken and in some cases abandoning the ERP projects altogether.
The basic attitude of paying someone for software and implementation services without a full understanding of the issues involved and an unclear set of objectives is a perfect platform for burning up loads of cash with no clear outcome.
An ERP project should be approached in the same way as any other major project:
Understand what you are trying to do and what outcome is expected from a strategic perspective.
Analyse the project in detail to determine how much it is going to cost in terms of time, money and resources before you commit to the project and buy ERP software.
Carry out effective risk analysis to identify potential problem areas and put in strategies to mitigate the risk.
Communicate to the entire company what the company is doing, why and the expected outcomes.
Select software based upon testing of the software through a model for fit and negotiate contracts based on successful milestone outcomes.
Don’t be swayed by the ERP salesman’s hype about fast implementation. Successful implementation takes around 18 months and this has not changed since the MRPII days of 35 years ago.
Management involvement in understanding what ERP is, the changes that need to be made and their willingness to get involved at each step is critical to the overall project success.
Budgets, live running and resource allocation without understanding the scope of work or the implications of formatting such information without firstly understanding the quantum of work to be completed ensures project failure from the start long before the software and project implementation activities even commence.
The latest survey results show clearly organisations have learnt little from the ongoing industry disasters and until organisations stop and take a close look at what they are doing and how they are doing it we will continue to have ERP disaster stories continue.
We maintain our stance! ERP is about effective project management of the right issues and not just a computer system.
The companies we visit to carry out or recovery work or case establishment for mediation or litigation could all have avoided their disasters by taking a whole company view of the ERP project to understand all of the issues that have to be managed and not just the narrow software perspective they have adopted.
We suggest you read our articles re the 26 steps and compare it with your project plan to identify your project gaps.