Finally! A decision has been made and our company will move forward to implement a new ERP system. A common system was chosen which will allow us to gain synergies across the organization by accessing one source of truth and real-time data. What an exciting and intimidating journey in which we are about to participate. Implementing a new ERP system and transforming the business is not an everyday experience, but what an opportunity to shine. Yes, there are risks and we need to make sure we take steps to reduce the risk, but our success is really the only option. Let’s begin by making a list of our next steps:
- Assessment of our Companies Needs
- ERP system Evaluation and Selection
- Advise the Employees of the New ERP System
- Data Preparation
- Configure and Optimize New ERP System
- Upload Current Data to New ERP
- User Training & Education
- Go Live
- Ongoing support
We have assigned responsibility for the project to our in-house IT manager and we now have a plan on how to implement (above). I don’t understand how this could be so difficult; it is going to be a picnic. Let’s add periodic updates or checkpoints to guarantee the project stays on schedule.
Does the scenario above sound familiar to you? Well, here’s the reality: While you were sitting on your picnic blanket, snoozing against the oak tree and dreaming about the successful implementation of your new ERP system, you fell down into a rabbit hole. Just like that little blonde haired girl your kids read about. Pull yourself out of that dream before you lose your head to the Queen for a failed ERP implementation.
Project Failure is not likely because our organization is medium to small in size and we can force the project to be successful. Hopefully you did not say that out loud. Actually the project has approximately a 64% chance of success on average according to the PMI- Project Management Institute survey (PMI 2015). PMI surveyed 2,800 management leaders and practitioners worldwide. 52% of the companies had revenues below $1 billion and 43% of the companies were less than $500 million in yearly revenue. I would venture to say there is a good enough cross section for the stats to reflect your company’s chances of successfully completing your project.
I will try to keep the math talk simple; otherwise I will have to call my son who is majoring in math (my genes?).
PMI average of 64% project success rate has been extremely stable over the last four yearly surveys. Remember 64% is an average, there are companies on the high end and there are companies on the low end. A strong correlation exists between completing a project successfully and an organization’s skill in project management. The findings show that organizations with robust project management practices find themselves around 90% of the projects completed successfully. But organizations with little to no project management practices average 36% project successes. How comfortable have you been with your organizations skills in project management? Still feeling confident? To add to this information, organizations at the bottom of the barrel in project management skills will waste 13 times more money than the seasoned project management organization. Pull a number from the air like 5 times wasted money if your organization is average in PM skills. Still feeling confident?
If you are still not convinced the company needs skilled project management help, and I know some of you out there are named Thomas….”Mr. Doubting Thomas”, here’s some more information. You are thinking, It is a large IT project in which we will be fine with the implementer IT guys and our IT manager. Those stats in the PMI survey are for all sorts of projects whereas an IT project is easier to control….flip a few switches, test, fix, go live and we have success. Then you may want to read a little article (Bernheim 2012) by Richard Bernheim in which he points out IT project success rate is around 36%. Ouch. Success rates for IT projects are worse? But why? ……because “people issues” account for 80% of the IT project challenges. 80% of the project issues are contributed to people, which indicates that your in-house IT manager needs to be extremely good at stakeholder management & change management, while at the same time, balancing a robust project management process. I am not a gambler but I would be willing to bet that sometime during the project you will make a statement to your IT manager which sounds something like; “why do we never find out the project has gone off the rails until there isn’t enough time to save it”.
Project management services from a skilled consultant can eliminate the bias and internal company politics which usually hide issues until it is too late. The focus stays on the one project and the people in the entire organization. Let’s face it, installing an ERP system is not just a large software package installation, but a full transformation of the way the entire organization will work. This is NOT one of those times you want to live your life by the motto; “If you want anything done right, you have to do it yourself”. Get the project management help which will absolutely increase the likely hood of project success. Tired of reading about surveys and statistics? Then I have a teaching case (Xu et al., 2011) for you to read from the Journal of Information systems Education which is a perfect example of making the decision to implement an ERP system on your own.
Bernheim, Richard. “The Real Work of Project Management: Improving Information Technology Project Success Rates.” ProjectManagement.com. ProjectManagement.com, 17 Sept. 2012. Web. 29 Oct. 2015. http://www.projectmanagement.com/articles/284665/The-Real-Work-of-Project-Management–Improving-Information-Technology-Project-Success-Rates
PMI. “Capturing the Value of Project Management.” PMI’s Pulse of the Profession (2015): 1-27. https://www.pmi.org/~/media/PDF/learning/pulse-of-the-profession-2015.ashx
Xu, H., P.J. Rondeau, and S. Mahenthiran. “The Challenge of Implementing an ERP System in a Small and Medium Enterprise – A Teaching Case of ERP Project Management.” Journal of Information Systems Education (2011): 291-96. Print.