Perfect paranoia is perfect awareness.
ERP projects have a notorious history of failure. Most ERP projects go over budget and over schedule, and worse, most ultimately fail to ever deliver on the business requirements. Even so, a modern backbone is crucial to de-risk a business and enable future growth. A solid ERP system foundation can make a business more efficient and operate effectively around the globe.
To be successful, an ERP project requires management to embrace their paranoia. These projects are mission-critical. They require meticulous planning and highly experienced resources. Be prepared to trust no one—govern the governors and check the checkers.
In our experience, there are five key factors that determine if a project succeeds or fails:
- Business outcome alignment
ERP projects are not IT projects; they are mission-critical business projects. Maintain your focus accordingly. To executive management, a project like this should look more like an M&A process. Establish governance accordingly and be prepared for executive leadership to spend considerable time on the initiative throughout the project.
- Quality resources
In any initiative, the difference between success and failure is the people. Spend the time to be critical of the resources assigned internally—by the software vendor and system integrator. These resources should not the people driving the sales cycle, but those who will execute your project. You will also likely need help from an independent third-party; don’t pinch pennies to get it.
- Risk management
Know your risks at every turn. Unpack them to ensure you have a full grasp of the repercussions for every decision made, considering the presented risks. Risks come in many forms and can impact the project budget, timeline, and complexity, such as the ability to be flexible in the future. Each red and yellow item on your project plan can have a major financial impact on your business results.
- Project management
You can easily find yourself in a situation where you are asking, “Who’s on first? What’s on second?” Make sure every party involved, both internally and externally, understands the full scope of their responsibilities. Keep a clear line of communication across the project team to ensure timely decision making, full transparency, and accountability. Nearly everyone involved in an ERP project, except the customer, has some form of incentive to extend a project past its deadline.
- Change leadership
A new ERP deployment or upgrade requires significant change management. This is an opportunity to question your business assumptions. Can you adopt more standard business processes to improve efficiency? The quick answer will always be no. Change management is key. To be successful, the business must see and feel the presence of management to drive the change. Additionally, adept and experienced resources (see quality resources above) must be able to convincingly drive change in the business.
It bears repeating: ERP projects are massive undertakings. Due to scale alone, risks are bound to surface at every step. However, paying keen attention to these key areas will secure your project’s success. Once you have these considerations squared off, you can start your project with confidence.
If you need help at any step along the way, don’t hesitate to give us a call.