5 Keys to ERP Project Management Success
ERP implementations are gaining momentum. As executives become more comfortable with volatility and as they think they have a better handle on what might occur in the future, they are starting to think about investing again. To add fuel to the fire, they are realizing that they’ll be left in the dust by their competitors who can deliver quicker, provide 24/7 access to shop and gain order status visibility etc., and so they are considering investing in technology. Thus, I’ve seen a sharp rise in requests to select systems and help with project management for upgrades and implementations.
ERP implementations rarely fail in formulation; however, they frequently fail in implementation. Almost every client I run across has heard a horror story of a failed ERP implementation – a supplier that couldn’t ship, a customer that couldn’t figure out what was needed, the business in chaos, etc. Thus, it makes imminent sense to consider the top keys to success for ERP implementations. Don’t even start down the path until you’ve thought through these keys to success:
- Focus on just the critical few key requirements: Although it is natural to think that every piece of functionality is critical (or why not include it since you’re spending money on a new system anyway), STOP! Take a step back and focus 80% of your efforts on the 20% of functionality that drives your business. Which profit drivers are important? Which customer requirements are key to success? Does your industry have any differentiators? How will the software functionality address these critical success factors?
In my experience with numerous ERP selection and implementation projects, this is one of the most overlooked yet vital success factors. Unfortunately it is easy to get swiped up in the bells and whistles the ERP software providers show you unless you have clearly defined which 3-5 critical requirements should be seen with a deep dive.
- People: Nothing else matters if the right people aren’t on the team. As with project success in general, it begins and ends with leadership! When implementing a system, it is 99.9% probable that something will go wrong during the implementation, and if you have the right people in the right positions (on the implementation team, focused on change management, leading the organization, etc.), they will turn these potential bottlenecks into minor bumps in the road.
- Functional-led: The project must be led by a core business function, yet the IT project manager must be integral to the process. I know might seem like a contradiction, but it is one of the most important elements to success. The business must lead the process to make sure it is focused on the key elements that will support the business and drive business value/ return; however, they typically are not the best equipped to ensure a successful execution. Therefore, finding an IT project manager proficient in bringing it all together (the business needs, project management, the IT elements, etc.) and facilitating the implementation (sometimes behind the scenes in a supporting role) is key to success.
For example, in my experience, if the ERP implementation was led by IT, the business leaders would blame IT’s lack of business knowledge on any issues that arose – regardless of whether they could have prevented them. Instead, if the business functions led the implementation, they brought up the business issues in advance. In those cases, if IT wasn’t integral, the issues were typically not addressed successfully – or in the most cost effective and efficient manner. Thus, the optimal solution occurred when it was a collaboration.
- Change management: Implementing a new system is one of the most significant change management initiatives a company can embark upon. People’s jobs change, processes are redefined, and the system is changed – not much stays the same. Thus, change management is vital to success.
Even though change management is a requirement to succeed, it isn’t necessary for the project leader and team to be an expert in change management to be successful. Instead, leadership is the key – communicate proactively, provide as much clarity as possible about the future state, communicate the roadmap to get to the future state, ask questions, incorporate input, and listen. Project managers and functional leaders will make or break your ERP project success.
- Training and education: This topic should not be overlooked. It is the only way to make sure the business results are achieved. Don’t just focus on the how-to’s. Remember the whys – we want people to think, ask questions, push back and work as a team to deliver the expected business results. Thus, processes need to be defined and understood. How will each person’s daily job responsibilities change? Do they understand the expectations? Do they understand how to perform the functions in the system? Do they know how to back out mistakes? Do they know how to run reports? Simple questions yet often overlooked.
As businesses upgrade and implement new systems, those who follow these keys to success will not only implement the new system without significant stress and failures but they will also have the opportunity to leverage technology to improve customer satisfaction and increase margins.
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