What Is The Root Cause Of ERP Project Failure?

ERP projects are failing to deliver customer value. I believe, we have a long way to go to get it right.

Here are few references to support the fact:

https://www.erpfocus.com/ten-erp-failure-statistics.html

https://www3.technologyevaluation.com/research/article/erp-software-facts-stats-and-lessons-learned.html

https://www.erpvar.com/blog/bid/108723/9-VERY-Scary-ERP-and-ERP-System-Implementation-Statistics

https://www.enterpriseirregulars.com/11871/erp-failure-new-research-and-statistics/

To save the failing projects, we need to understand root cause of the failures.

The Root Cause:

I believe, the root cause is customer’s big assumption that we can do it all. Customers assume that they just need to select an ERP – Implementation partner and assign few internal resources to the project.

The fact is that ERP implementation requires specialise set of skills:

  1. Business architect: To assess what capabilities your business needs to develop to thrive today and tomorrow? Business Architect is a big picture thinker. He/she helps to think your business as a one cohesive unit. Business Architect guides you about the data, information, business capability, processes, business initiatives, value streams, organisational structures, stakeholders etc.
  2. Project Management: Customer Project Manager is responsible for day to day management of the project. This is to ensure that all client tasks (data, reports, stationary, testing, internal investigations and decision making) are completed according to the plan.
  3. Subject Matter Experts (SMEs): The SMEs are responsible to make key decisions on the configuration of the ERP. Each area of the business must have a dedicated SMEs (Finance, Operations, Field Service, Asset Management etc.). The SMEs own their area of expertise and collaborate with the each other to define the needs of the ERP.
  4. Project Working Group: The working group is responsible for undertaking all the ground work under direction of SMEs. For example, data cleaning and migration, define business requirements for stationary, reports, document existing business processes, security and access, assist throughout the project on various business-related queries, discussions etc.
  5. Testing Team: Responsible to plan, prepare and execute test the ERP system configured by the vendor.
  6. Technical Team: Develop reports, stationary, set-up security, migrate data, customise user interface to suit business needs. These activities help reduce cost of consulting services and enhance ERP system understanding within the business.
  7. Training and Support Team: Plan and deliver the end-user training and support to the business. Support the roll-out of the ERP within the business.
  8. Change Management: This is a key role within is any ERP implementation. The ERP projects are the change projects. The success is in adoption of ERP capabilities as they are designed and avoid customisations, where possible.
  9. Project Sponsor: Strong and experienced Project Sponsor is the key factor in success of the project. Project Sponsor is responsible to drive the change, take key decisions, resolve conflicts and set clear expectations about the outcome of the project with everyone.
  10. System Admin: After the vendor handovers the solution to the business and project is closed, the System Admin takes responsibility to support the product on ongoing bases. From Business-As-Usual (BAY) perspective, continuous improvement initiatives should be encouraged, proper governance procedures should be in place to ensure proper use of the ERP solution.

The bottom line is that it is Customer’s project sponsor responsibility to ensure the success of the project. The Sponsor must undertake internal assessment of the capability and availability of the internal resources before and during project execution. Any gaps in resourcing must be filled at appropriate time.

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