Your ERP software consultants or vendor will not "live" with the results of a failed implementation; your organization will.
This means organizations must control their ERP project destiny by becoming more educated, self-reliant, fulfilling project responsibilities and properly utilizing consultants. After all, from the perspective of the organization successful ERP is software that actually satisfies business needs, employees that really understand the system, and implementation costs that are significantly less than "consultant driven" projects. The reality is ERP projects do not fail overnight; they fail one project management decision at a time. The good news is a high percentage of implementation costs, software disappointments and go-live disasters are avoidable
The scope of a typical ERP project impacts almost every aspect of the organization and the implementation risks are real. It is not unusual when actual project timelines exceed the original schedule by well over 100%. The cost of consulting services alone can grow to 4 - 5 times the cost of the ERP software (with even greater upside risk potential). Finally, we have all heard the horror stories...expensive ERP initiatives that never go-live, or worse yet those that do and hamper the business for years after cutover. That is in spite of all the proven implementation methodologies, an alarming number of ERP projects have unhappy endings.
While the help of consultants is probably required, leaving the fate of your ERP project in the hands of consultants may only create a false sense of security. Regardless of the right intentions, software consultants are not all knowing, are the beneficiaries of cost overruns, and in the end have limited control of the key factors that enable ERP success. These are just a few of the many reasons why no consulting firm will guarantee your success (in writing). There is no question that consulting firms want the client to succeed. Nevertheless, in world of ERP consulting make no mistake; the name of the game is billable hours. When it comes to ERP software vendors I can say only one thing: regardless of what the sales people claim the software can do, they will be long gone when it comes time to implement. The truth is once you bought the ERP farm, you now own it one way or another.
On the other hand consulting firms or software vendors often take the heat (and lawsuits) for ERP disasters when in fact it was the organizations own doing. Any list of the top five reasons for ERP failure makes it clear the organization is more than partially to blame. When the client becomes disengaged and the project falls hopelessly behind schedule, consultants are left with no choice but to do it on their own. This not only feeds the consulting cost frenzy but management is left scratching their heads wondering why their ERP software (used successfully by many in the same industry) failed to meet their business needs.
Yes, many clients like to blame software vendors and consultants for their ERP failures; and in many cases this may be true. However, guess who bought the software and selected the consultants? On the other hand, why would any consulting firm not want the client organization to be knowledgeable, feel accountable and fully engaged? Sure consultants make a lot of money on uninformed or disengaged clients, but no consulting firm wants a black mark on their resume.
The reality is consultants and software vendors have no direct authority to make management or anyone else in the organization to do much of anything. Sure consultants can provide expertise, perform tasks, make suggestions and can insist on many things; but at the end of the day only the organization can:
- Insure executives are educated, on board and understand their roles.
- Own the business case and drivers for the change.
- Clearly define, own and communicate project objectives.
- Implement internal measurements systems to support the desired changes.
- Approve and contain the project scope.
- Require (not just sell) the cooperation of employees at all levels of the organization.
- Assign the right internal employees to the project team.
- Free-up the required time for those assigned to participate.
- Expect (not just hope) the internal team and IT support eventually become software experts.
- Hire as internal employees people with the right skills and knowledge when necessary (you will need them longer than you think).
- Plan and utilize outside project management, application consultants, technical consultants and programmers correctly.
- Hold functional (middle) managers, the project manager, the project team and IT staff accountable for doing what they are suppose to do.
- Make necessary changes in business policies, practices and procedures to take advantage of the software.
- Limit software modifications through business justification or changing business processes.
- Remove the people barriers and naysayers that get in the way.
- Tackle project business issues and decisions in a timely fashion.
- Take end-user training seriously and require employees attend.
Again, regardless of how great your consultants or ERP software, these are things only the organization can really do. Also, these factors have the biggest impact on project success. Finally, they are just a few more reasons why consultants and software vendors cannot save the day (or own your project even if they want to).
No one said it would be easy; but an important question to ask is: Why would any management team spend hundreds of thousands or perhaps millions of dollars on ERP with the goal of failing? The other question is: Do people rise to senior management levels within most organizations because they are totally incompetent? Generally speaking the answer is no. So what gives? One answer is organizations do not plan to fail, rather they fail to plan. However, it actually goes much deeper than that.
Implementing an ERP system is not something most organizations do every day. Unlike more frequently occurring internal projects such as new product development or pure technology projects, everyone does not know the ERP implementation drill, subtle pitfalls and the consequences of certain decisions. ERP comes along every ten years or so and the opportunity for learning through repetition simply does not exist. Also, those involved with the previous ERP project have probably left the company or want to stay as far away from this project as humanly possible.
The good news is ERP project management deals primarily with management issues that decent managers can understand and do something about. The old saying you dont know what you dont know certainly applies. However, successful ERP does not require a PHD in computer science but an management team with practical insight, some common sense and one that is willing to expect something from internal folks. No doubt some outside coaching from consultants is normally necessary but this is very different than a consultant driven project.
Believe it or not, management can understand what needs to be done, the important questions to ask, the key decisions to be made and the potential implications of those decisions. Furthermore, this can be accomplished without spending a boatload of money on outside consultants. In addition, companies can develop and/or acquire the internal software expertise to be successful. Organizations have been doing this for years and ERP is really no exception. Contrary to popular belief, the need for the right internal skills and software knowledge does not end when the system is initially installed. That is unless you want to spend a fortune in consulting fees for many years after go-live for the support typical of any ERP system (on-going training, configuration changes, future phases, upgrades, etc).
In many ways controlling your ERP destiny is about getting "street smart" on how to implement ERP; since there are plenty of important things that consultants and software vendors are not going to tell you. This enables the organization to be more engaged with their project, mitigate risks, properly allocate internal resources, manage vendors, and make informed decisions that yield more predictable results.
For More Information visit Street Smart ERP: http://it.toolbox.com/blogs/street-smart-erp
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