In my research and consulting activities, I have worked with the largest enterprises to smaller and mid-sized manufacturers. One of the more intriguing issues I’ve seen is ERP implementation risk during solution discovery.
No matter the size of the organization, it’s not uncommon for teams to consider their previous ERP implementation a failure. In fact, Gartner has found that approximately 75 percent of all ERP projects fail, despite the industry’s focus on delivering better customer service and advanced IT systems.
Without assistance from individuals who have previously performed an ERP implementation, a miniature to the medium-sized company could potentially be doomed before the project is initiated.
When considering ERP implementation risk during solution discovery, noted here are four factors that could potentially cause a project to fail before the software contract is signed.
In some failed ERP projects I have observed, the Project Management duties have normally been assigned to the Director of IT or IT Manager. Though this individual may be competent to perform these duties, I have witnessed instances in which the venture became delayed and ran over budget because the Project Manager was continually trying to balance the implementation against his or her daily duties throughout the life of the project.
Thus it is key for the project to be managed by experienced resources with previous IT implementation practice, such as a team of experienced ERP selection consultants.
During the Solution Discovery Phase, the most successful projects are led by a resource with extensive experience in various disciplines. This resource will travel to each site, review each process, and communicate with the end users regarding their pain points with the in-progress processor software application. Subsequently, the resource will then document the current state and future state to include within the RFP.
Smaller to mid-sized companies often fail at this process by neglecting to bring in subject-matter experts to assess current business processes. To combat the resource constraints of subject-matter experts, some SMEs will bring in any available resource from respective departments due to the fact that the subject-matter expert must perform his or her daily duties.
During the vendor-review process and sales cycle, some organizations opt for the out of the box option as of the cost aspect as compared to a full ERP implementation.
Even though IT managers understand the importance of an optimal ERP solution, CFOs and Executive Management incur a knee-jerk reaction when comparing the cost of the “out of the box” versus customized solutions.
Finally, when allowing for ERP Implementation risk during solution discovery, it has been my experience that risk follows when management looks at an ERP project as solely an IT project.
For many organizations where the executive management has no experience with an ERP implementation, leadership might view an implementation as an IT project instead of a company-wide project.
We see time and again that the largest key to avoiding implementation failure is executive buy-in and support. Success follows when all departments within an organization are mixed up within the implementation, making it important to ensure the subject matter experts of each department are included throughout the life of the implementation.