Implementing a new Enterprise Resource Planning (ERP) system is a challenge commonly faced by businesses.
But with 65% of ERP implementation projects reported as not going to plan on average, there is significant room for improvement in the way businesses prepare for and execute these projects1.
Regardless of the size of your ERP project or programme, whether you are implementing an off-the-shelf solution or one that's being developed in-house, and whether it is being hosted on-premises or in a cloud environment, our experience shows that the underlying issues, and their root causes, almost always come back to the same common project pitfalls.
Before embarking on a complex ERP project, or to address issues you might be facing while implementing an existing project, we recommend that you combine the key lessons learned from our common pitfalls with a suitable project management methodology. This way, you'll increase the chances of your project succeeding, limit your exposure to risks, and significantly reduce the all-too-frequent cost overruns, delays, changes and unforeseen issues that these common mistakes cause.
During the initial discovery phase, the ERP project team needs to present a high-level business case to senior management, justifying why they should proceed with the project. It is often stated during this phase that a more detailed analysis of the project's budget, timings, staffing, scoping and other unknowns will be made at a later stage. Ensuring enough time is allowed for this detailed analysis, and resisting senior stakeholder calls for quick and visible wins, is often missed.
Moreover, the rise of agile methodologies, such as scrum, has also contributed to the view that there is no requirement for detailed documentation, scope, planning or design, and that the scrum team does not need to be managed.
Those adopting this approach of planning at only a higher level are increasing the likelihood of encountering the following pitfalls, which will make failure more likely before the project implementation has even started:
assumptions insufficiently robust
unclear or incomplete scope, requirements and constraints
unclear roles and responsibilities
Over-customisation is another pitfall whereby people hold up to outdated ways of working. Especially with cloud implementation, which requires the business to “adopt” out-of-the-box functionality rather than “adapt” the software through customisation and development. Therefore, the way existing processes and ways of working fit together needs to be understood and managed effectively.
We also see organisations failing to create a solid foundation for their implementation project due to a lack of alignment with the overarching IT strategy roadmap, goals and objectives.
It can often be tempting for senior stakeholders to hand over the day to day management of their implementation project to a third-party contractor or systems integrator. This can be a great solution, allowing you to maintain focus on the day to day business.
However, without thorough governance planning and clear allocation of roles and responsibilities, issues can arise. Thus, achieving the right balance between retaining control and accountability internally whilst leveraging third party delivery expertise is key to successful projects and good risk mitigation practice.
Poorly defined delegation or sharing of authority and oversight is one of the most common causes of project pitfalls and can result in the following issues:
Over-reliance and delegation to third party provider(s)
Unsuitable programme manager, shared ownership
Low senior management involvement and ownership
Maintaining appropriate oversight and communication as the implementation project progresses is key to staying in control. It is important to have a clear and real-time understanding of critical path issues and how they are being mitigated, whilst being flexible to changes within the project.
The other common pitfalls fall within the governance, collaboration, clarity and control categories:
Lack of control and visibility
Under-estimated systems integration complexity
Poor issue management and associated re-planning
Inefficient change control process
Team communication, collaboration, working pace alignment and trust issues
Unsuitable data migration quality and lead-time
Organisational Change Management under-investment
Technical versus business outcome focus
Underestimated BAU (Business as Usual) support needs
From the early days of system specification and selection process, all the way through to post-implementation support, there are many areas where things can go wrong. It is important that your team is well equipped to identify and address these common pitfalls as early as possible, so they can be proactive rather than reactive.
To stay in control of the process, having clear accountability and being able to make informed decisions in a timely manner is key.