Who runs the ERP implementation project: the consultant or the client?

An ERP Implementation project has an equal chance of success or failure in the beginning. What makes it go well and what makes it go bad?

There was an interesting post about the evils of ERP Consultants on ITToolbox: Are Some ERP Consulting Firms Crooks?

Reading it, you understand why so many ERP projects fail. It seems like that is all people talk about are the failures in ERP project implementations. Is it really the consultant who makes it fail? I think the real question is “who really runs the ERP implementation”.

If what you read in the above mentioned article holds true, then there should not be any successful implementations. I take a different stand and believe that most ERP consultants, and their firms, are trying to do the right thing, there are, however, circumstances that derail a project. Further, I believe that it is the customer’s responsibility to stand up for their rights and protect their investment.

When initiating the project, it is important that the project team interviews each of the consulting team’s staff-members around their experience and their ability to deliver in the role slated. If at any point in the project, you feel that any of the consulting team members are not performing or are being difficult to work with, bring it up to the consulting project manager or the firm’s account manager. They have a vested interest in you getting along well with the team so that the project runs well. Sometimes success or failure is a matter of personalities.
ERP implementation flow
Frequently, ERP implementation projects are run by the consultants who drive it based upon a methodology that has worked for them in the past. It is usually a derived form of Initiate, Design, Build, Test, and Cutover. These five steps have been used in variation for decades now. The methodology has moved from being a rigid waterfall method to a more agile iterative approach, but it still follows the same theme.

If consultants follow the same methodology (in one form or another), why do some projects go well and why do some fail? I believe the answer lies in the project governance. Who manages the project? Who takes ultimate responsibility? What is the culture of collaboration? These are all key questions that need to be addressed before the first day of the project and readdressed along each status meeting.

My experience has shown me that projects that go well are the projects where the client “owns” the success of the outcome, along with the consultants. If the client is not “bought into” their own success, then how can the consultant drive the project to success?

At the same time, there needs to be collaboration. The value of consultants is the experience they bring in executing implementations over-and-over. The consultants will tend to drive the project based on their methodology and their experience, however, the client needs to step up and ask “why?” and “how?” Then they need to assess if it is a sound direction. They need to either accept the recommendation, or push back if they think it will not work for their company.

A professional consultant should listen and explain their reasoning. It should not turn into an ego-fest of who knows best. Rather options and solutions should be presented. A lot of this collaboration depends also on the people involved in the project. Within the same implementation team, you may have a driver style personality who sees all client requests as out-of-scope and must push for a change order. At the same time you may have collaborative team members who gets what the client is asking and realizes that the request is part of the iterative process of reaching a desired solution.

A skilled project manager negotiate with the different personalities and must make the decision to determine where the solution is going. Is it outside the bounds of the work agreement? Or, if by following that path, will it lead to a joint success. This can only be reached through meaningful discussions.

There are consultants who focus too much on billable hours and not on client needs. There are other consultants who focus on client needs only and as a result blow-up the budget. In both cases, the client needs to call foul if they see project effort going too far in the wrong direction.

On a recent project, a client realized that the technical development was over engineering the solution. The client is not technical, but could see that the solution presented was too much for the goal. Working with the consulting project manager they refocused the team and got things back on track.

Bottom line, if you as the client are not collaborating, and working through issues daily with the implementation consultants, you will be driven to a solution that is not one of your own choosing. On the other hand, if you drive the project with too much zeal and force, you may miss the valuable design experience that the consultants bring.

The success of the ERP project weighs as much on the internal team and their project manager as much as it does on the consultants. Where projects go bad, it is often due to the lack of participation of the implementing company’s team or the lack of direction from their project manager. In these cases, the consultants end up driving and will likely make system decisions based on experience, but not based on the operations of the company. So if you want to have success in your ERP implementation, you must own the project and work collaboratively with the consultants each and every day.

Causes of ERP Failures

Here is an article that zooms right into the reasons for why ERP implementations fail:

Causes of ERP Failures
by: Bruce Zhang

ERP is the acronym of Enterprise Resource Planning. Multi-module ERP software integrates business activities across various functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP has transformed the way multi-billion dollar corporations conduct their businesses. Successful implementation of ERP systems could save tens of millions of dollars and increase employee satisfactions, customer satisfactions and sustain competitive advantages in every-changing marketplace. Corporate executives are often perplexed by the stories that how reputable corporations (Hershey Foods) have failed miserably and lost ten of millions of dollars in their ERP endures.

The failures of ERP projects are preventable if we can identify the common causes of the failures regardless the companies and industries that implement them.

An ERP system is the combination of ERP software, the business processes that the ERP transforms, the users of the ERP system, and the computer systems that run the ERP applications. The failures of a ERP project is often the result of the failures in one or more of those four components. The failures in computer systems (hardware and operating systems) are much easier to identify and to fix, so we’ll examine the failures in software implementation, business process and user acceptance.

Failure of ERP Software Implementation

Module-based ERP software is the core of ERP systems. Most ERP projects involve significant amount of customizations. Packaged ERP software modules have built-in functionality that work in a standard and simplified enterprise environment. However, every organization is unique in data requirements and business processes. It is the customizations that transform packaged ERP software into ERP software that meets organizations’ individual business processes and operations. Long and expensive customization efforts often result the pass of release deadline and budget overrun. Customizations may make the software more fragile and harder to maintain when it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations

Why New Systems Fail: An Insider’s Guide to Successful IT Projects

The integration of ERP systems (http://www.sysoptima.com/erp/erp_integration.php) with the IT infrastructures also challenges ERP project teams. The use of appropriate implementation methodologies can often make or break a ERP project. (http://www.sysoptima.com/erp/implementation_methodologies.php)

Failure of Accommodating Evolution of Business Processes

According to Anthony, R. A, business processes fall into three levels – strategic planning, management control and operational control. Organizations continuously realign their business processes of all levels in response to the ever-changing market environment. Many ERP systems aren’t flexible enough to accommodate evolution of business processes. many ERP system need a major overhaul in every a couple of years.

Failure of User Acceptance

The users of ERP systems are employees of the organizations at all levels. ERP projects usually modify the company’s business processes which create extra workload for employees who use them initially. They may not think that the workflow embedded in the software are better than the ones they currently use. Ongoing end-user involvement and training may ease the difficult in organization’s adaptation of new systems and new business processes.

About The Author

Bruce Zhang has over 10 years experiences in developing and implementing ecommerce and ebusiness systems in various industries.

He operates a website http://www.sysoptima.com that automatically aggregates the news and new articles in e-business (ERP, CRM,

Supply Chain Management and Knowledge Management) from over 50 sources daily (http://www.sysoptima.com/newsbot/) to help corporate executives, professionals and consultants to keep up with the latest development in enterprise software market. The website offers a knowledge base for understanding business software from a systems perspective.

Causes of ERP Failures

Causes of ERP Failures

by Bruce Zhang

ERP is the acronym of Enterprise Resource Planning. Multi-module ERP software integrates business activities across various functional departments, from product planning, parts purchasing, inventory control, product distribution, to order tracking. ERP has transformed the way multi-billion dollar corporations conduct their businesses. Successful implementation of ERP systems could save tens of millions of dollars and increase employee satisfactions, customer satisfactions and sustain competitive advantages in every-changing marketplace. Corporate executives are often perplexed by the stories that how reputable corporations (Hershey Foods) have failed miserably and lost ten of millions of dollars in their ERP endures.

The failures of ERP projects are preventable if we can identify the common causes of the failures regardless the companies and industries that implement them.

ERP Failures
Image by Behrooz Nobakht via Flickr

An ERP system is the combination of ERP software, the business processes that the ERP transforms, the users of the ERP system, and the computer systems that run the ERP applications. The failures of a ERP project is often the result of the failures in one or more of those four components. The failures in computer systems (hardware and operating systems) are much easier to identify and to fix, so we’ll examine the failures in software implementation, business process and user acceptance.

ERP Failures -Software Implementation

Module-based ERP software is the core of ERP systems. Most ERP projects involve significant amount of customizations. Packaged ERP software modules have built-in functionality that work in a standard and simplified enterprise environment. However, every organization is unique in data requirements and business processes. It is the customizations that transform packaged ERP software into ERP software that meets organizations’ individual business processes and operations. Long and expensive customization efforts often result the pass of release deadline and budget overrun. Customizations may make the software more fragile and harder to maintain when it finally goes to production. Major changes may be required in the later stage of the implementation as a result of incomplete requirements and power struggles within organizations

The integration of ERP systems (http://www.sysoptima.com/erp/erp_integration.php) with the IT infrastructures also challenges ERP project teams. The use of appropriate implementation methodologies can often make or break a ERP project. (http://www.sysoptima.com/erp/implementation_methodologies.php)

ERP Failures – Failure of Accommodating Evolution of Business Processes

According to Anthony, R. A, business processes fall into three levels – strategic planning, management control and operational control. Organizations continuously realign their business processes of all levels in response to the ever-changing market environment. Many ERP systems aren’t flexible enough to accommodate evolution of business processes. Many ERP system need a major overhaul in every a couple of years.

ERP Failures – Failure of User Acceptance

The users of ERP systems are employees of the organizations at all levels. ERP projects usually modify the company’s business processes which create extra workload for employees who use them initially. They may not think that the workflow embedded in the software are better than the ones they currently use. Ongoing end-user involvement and training may ease the difficult in organization’s adaptation of new systems and new business processes.

Bruce Zhang has over 10 years experiences in developing and implementing ecommerce and ebusiness systems in various industries. He operates a website www.sysoptima.com that automatically aggregates the news and new articles in e-business (ERP, CRM, Supply Chain Management and Knowledge Management) from over 50 sources daily (www.sysoptima.com/newsbot/) to help corporate executives, professionals and consultants to keep up with the latest development in enterprise software market. The website offers a knowledge base for understanding business software from a systems perspective.

Another Related ERP Failures post

Causes of ERP Failures

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