ERP Project Failure is the Standard
Thursday, March 13, 2014
Constant surveys on ERP continually show ongoing problems with adoption of the technology! After many years of ERP experience you would think that we would be getting better at implementing the technology successfully. Not so! Panorama’s recent survey is still showing ERP takes longer, costs more and does not deliver expected tangible results. No
surprise here! The approach being taken has not materially changed to way the technology is being adopted since the 1990s.
The model of customer producing a list of requirements, sometimes with consultants help, is followed by a response from potential vendors, highlighting the positives in their package and downplaying the negatives, supported by claims of “Proven Paths” implementation methods and claimed expertise, suspect as best, and customers paying large sums of money
for implementation still produces the same disappointing results.
The reality is ERP is not simple, requires the collaboration of different players with different agendas and that does not include the change difficulties of internal company politics.
The term “Devils Triangle” refers to the key players with their different agendas; The ERP software vendor who is trying to sell their product and may stretch the truth or downplay issues with the software against the requirement in order to get the sale and at the same time creating an expectation with the client. The software integrators who are expected to implement the expectations sold by the sales people which may not be achievable. The
company who has not really understood the real need, underspecify the software at the front end resulting in downstream implementation problems, restrict resources, take shortcuts and lack effective management involvement all contribute to the disappointing end result.
In theory each of these players should come together to achieve a satisfactory outcome but in reality they rarely do as the drivers for each part of the “devils triangle” are working on different priorities.
We have constantly seen disputes where each party blames the other for the problems and in some cases these disputes end up being fought out in the courts where a confusing range of evidence is submitted, all of which relate back to the “devils triangle” and taken in isolation, depending on where each party sits in the scheme of things, has validity.
Our prediction is ERP will continue to cause major problems of delays, unacceptable cost blow-outs and little tangible benefit until the approach to acquisition and implementation of the technology undergoes a fundamental change. It is too late when the project has come apart during the implementation. The delays, costs and end result can only be reduced and not avoided even when timely intervention is made to change the course of the implementation.
The overreliance on software vendor integrator’s to implement ERP systems has to change and a fundamental realisation by organisations that just paying someone large amounts of money is not the answer. The answer is for the party most impacted by success or failure to take a different approach and accept the responsibility for all aspects of the project. That party is the buying client as they will be left with whatever legacy is left behind at the end.
Is there a real solution to this? We have been working with ERP and the forerunner MRPII for the past 35 years and our mediation and expert witness work with organisations in dispute has resulted in significant analysis across a broad range of industries and common themes have emerged that relate to the devils triangle and the failures of the different parties. We have put together a series of steps that must be taken to systematically ensure each
stage of the project, beginning with the acquisition strategy, to ensure the company is in control at each step of the way and can successfully direct the outcome and not leave it to chance.
The outline of the steps following is supported by a free self-assessment which is available to compare what you are doing against the assessment criteria. Organisations that have used this free assessment have invariably changed direction and report positive outcomes. To
access this free ERP implementation self-assessment goto www.atkoglobal.net.au and send us an email.
1.ERP Acquisition Rationale
2.In House Expertise in ERP
3.ERP Cost Justification & Budget
5.Request For Proposal (RFP)
6.Software Selection Criteria
7.The ERP Contract
9.Go Live Date/s
15.Software House Expertise
16.Software Imp Team Expertise
23.Management Action to Issues
24.Go-Live Readiness Reviews
25.Live Running Cut-over
26.Post ERP Cut-over
This approach is holistic and provides a clear path for the implementing client to take control of the project and ensure success the first time.
Experience worth listening to!