ERP Implementation Completed on Time and On Budget?
I read an article on Proformative called ERP Implementation Failure Cost Me My Job- Here is What I learned. After the initial shocker of this headline I had to read more. Basically, the author, who opted to stay anonymous wrote the post as a benefit to other looking to embark on their own ERP implementation journey. His concerns are not without merit.
Last year, a McKinsey report found half of IT projects with budgets of over $15 million dollars run 45% over budget, are 7% behind schedule and deliver 56% less functionality than predicted. We look at those numbers and wonder: does it have to be like this? The answer of course is not a simple yes or no. Implementing ERP software is an extensive process, which takes time and a clear up-front understanding of the projected costs and timetable.
Here are some key-takeways to keep an ERP Implementation on Track
- Clearly define and outline the benefits of the system
- Assume the project will cost more than initially expected
- Keep customizations to a minimum, finish the project first before embarking on costly customizations
- Keep a clear and open dialogue between the implementation partner
- Make sure both parties are willing to admit and move on from mistakes and miscommunications
- Set aside enough time to review and test the software
- Plan on an education period for the staff users
- Delegate and have a solid in-house IT department on board prior to the start of the project
- Make sure the executive team is on-board for the duration of the process
Let me know what you have experienced in your ERP implementations.
3 thoughts on “ERP Implementation Completed on Time and On Budget?”
Matt, this is so true. So much of what I have read is negative with respect to tech-intensive ERP projects. If you come to the table with an understanding of the challenges that helps tremendously. And, if you have an understanding of what the project should look like, then perhaps the project will go better than expected. Getting the executive team on-board seems to also be a major cause for ultimate success or failure.
Green Mountain Coffee Roaster (GMCR) fired IBM after a failed SAP project. Rumor has it that 100 million has been spent and the project is running 9 months late, with nothing implemented in the last 2 years.. Green Mountain may be looking at suing IBM.
Farukh, thanks for the tidbit. We haven’t heard anything to that effect, but we’ll keep an eye out if/when details emerge. Certainly an extreme example of an implementation gone wrong, if confirmed.