This month Paul is looking at why ERP projects can fail.
I’ve been involved in a number of ERP implementation projects, from two perspectives; as the client to whom implementation is “being done “, or as a consultant, supporting the doing. There is a general view, which I’m certainly not going to contradict, that ERP projects are stressful to be involved in, and that they usually run over budget and time.
Why is that? Why is it so difficult to set up, test and activate a piece of software that is usually sold as providing a means of making everyone’s life easier, and a business more profitable?
Well, ERP projects are very complex – that is absolutely the case, usually with many people involved, and multiple tasks and strands that have to be woven together successfully in a timely fashion to produce a glitch-free experience for the end users – some of whom may well be resisting the change from the beginning.
There are numerous valid articles that highlight key reasons for ERP project failures (use your favourite search engine or AI tool to answer the question “Why do ERP projects fail?” for a selection) but I want to highlight what, for me are key ones, to make an overall point:
Lack of Executive Support
Senior managers and directors are usually very happy to be nominally involved at the start of a project, and will often get drawn in if it goes off the rails, but their invested involvement during a project’s execution is vital. Its not micro-managing to ask for regular updates, to be present at Steering Meetings, and interacting with the team regularly in project offices. It is good leadership that shows you are interested and concerned.
Lack of Key Requirements
Why is your project being run? It may be as simple as the fact that your last system is out of support, and that is often a driver, but you’ll always be looking for more than a simple like-for-like swap. During the Sales process, potential vendors will have given you plenty of reasons as to why their system will improve your business. If any of those are compelling for you, write them down and then ensure you hold the vendor accountable for their delivery. You should also have your own, internally developed reasons. Publish, monitor and track them throughout the project – it helps keep the team (including the vendor) aligned, and focused and prevents scope-creep.
Poor Project Management
Sometimes this can be used as an easy excuse for failings in other areas. Someone once described the PM role to me as being a “blame manager”, which can be true, but don’t use that as a reason not to have one! It is a critical role, to keep the project on track, monitored & to provide focused reporting for the Steering Group and the whole project team. A feasible, living, breathing plan which includes resource allocation is vital. Oh, and be aware, if you are on your third or fourth project manager, perhaps the problem isn’t there?!
Effort underestimation
This doesn’t often appear directly in the “primary reason assessments” you’ll find online, but for me, it, or its symptoms, are nearly always seen. Believing that you’ll be able to continue to run the business without an ERP project implementation impacting it, perhaps also having other strategic projects running alongside it, whilst demanding tight timelines and minimised cost, is naïve, in my experience, to say the least. You might expect or, worse, simply hope, that your system vendor will do the real legwork. This isn’t realistic. Only your organisation knows what good data and processes look like for your business, and will know whether your team have been trained adequately on an appropriately configured system.
Expecting your internal resources to do their day job (which presumably is already an essentially full-time activity) alongside an ERP implementation, and potentially other projects is not reasonable! At best you will be disappointed and feel let down, and at worst your people will experience stress and burnout and the whole company will suffer.
So, what to do if you are ramping up for an ERP implementation or upgrade?
Well, firstly, be aware of these and the other potential pitfalls. Then, to counter the three mentioned above, I would strongly advocate the following:
- STOP, if the whole executive team are not aligned and supportive (with a genuine understanding and commitment to what that support could involve). Continue to persuade and convince until they are. A superficial agreement is not enough
- Document and make sure that everyone on the management team has signed up to the project’s objectives, key requirements and means to measure them. Make sure the whole team, including 3ʳᵈ parties, is fully aware of and committed to them.
- Appoint the best, most experienced project manager you can find. The investment will reap dividends. Ensure they have a good understanding of Critical Chain Project Management so that resources and tasks one being planned properly throughout the project lifecycle. My next blog will look at the Critical Chain Project methodology in more detail, as I believe it holds some key insights for planning and running successful ERP projects.
And finally, most simply…
- Do not underestimate the effort involved! It is unrealistic to expect your team to “fit in” their work on an ERP project. Allow them to dedicate the time required and do not demand unworkable and ill-considered project durations. A good project plan and management allows this (CCPM helps here), and a less stressed and pressured team will result – bringing better engagement and commitment. Happy team, happy business, successful project!
Perhaps unsurprisingly, we can help with all of these things: We have years of combined experience running ERP projects, and utilise CCPM alongside best practice Change and Risk Management to ensure the best possible chance of low-risk, stress-free but effective projects.
Get in touch, it’ll be worth it.