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The ERP Project Plan - First Signs of Trouble
Friday, July 26, 2013

On my recent overseas tour of industry and ERP sites I have come across a number of ERP projects that are running into trouble. The same problem with companies buying ERP systems and over-relying on the honesty and integrity of the vendor to provide the right product for their needs is the common theme. ERP vendor’s salesmen are there to sell you a product. The assurances that the systems they sell can do what the client wants is rarely challenged and rarely verified before the contract is signed.

The “Proven Paths” for implementation are proving to be hype that is never delivered as every company will have their own specific issues that may never have been encountered and therefore throws the so-called proven path off track.

More telling is the ERP Project Plan prepared by the ERP Vendor that would appear little more than a standard plan populated by the buying companies name and couched in such complexity and jargon it is almost impossible to follow. The ERP project plans that I have looked at in detail and compared it with the actual work being carried out in the organisation showed a vast difference between the plan and actual work. In a lot of cases there was no attempt to even update the project plan.

The response from the ERP vendor’s project manager was that the ERP project plan was a guide and not a bible to be followed.

I have spent many years working on major projects around the world and the project plan is the document that shows progress and highlights areas that are falling behind. The project plan was updated monthly and carefully examined as any delays can have major implications.

To be told by the ERP vendors project manager that the plan is a guide and not something that needs to be followed carefully highlights a major flaw in the approach to an ERP project. There are so many different elements in an ERP project that need to be managed and to suggest that the project plan is not a control document begs the question “How do you manage the project if you don’t have a plan to follow?”

The approach made by ERP Vendor provided project managers regarding project planning and control is an extension of the attitude vendors take to contracts for supply of software and services. The contract tends to be non-specific in terms of deliverables, timing and cost which leaves the door open to a continual escalation of costs all to the account of the buying client.

The onus rests with the buying client to ensure there is a clear spelling out of what the client is buying, the timing of the implementation deliverables and the cost or suffer the consequences of escalating costs and poor outcomes.

There is no substitute for defining your requirements and testing the software against those requirements on a model, and ensuring sufficient detail on what is expected at each step of the way to ensure the buying client remains in control of the project. The operating requirements, the outcomes and the costs must all be tied up in the contract so everyone is clear on what is being delivered at what cost. While ever the contracts are worded in nonspecific outcomes then ERP projects will continue to have massive budget overruns, delays in live running and poor overall project outcomes.

The clear lack of project management against the plan is a good indicator your project is not been effectively managed or controlled!