ERP: Avoiding PitfallsGeneral ERP Implementation Observations

Kirill Popadyuk

“When anyone asks me how I can describe my experience of nearly 40 years at sea, I merely say – uneventful.

Of course, there have been winter gales and storms and the like, but in all my experience, I have never been in an accident of any sort worth speaking about...

I never saw a wreck and have never been wrecked.”

From a paper presented by E J Smith, 1907

On 14 April 1912, HMS Titanic sank with the loss of 1500 lives. One of which was its captain…

…E J Smith

Statistics Is Far From Encouraging

worse than planned as planned

source: Panorama Consulting Group 2008 ERP Report

time

money

benefit realisation 79%

59%

93%

Top 7 ERP Failure Factors

source: ERP Asia

Failure to train users sufficiently

Attitude to implementation as an “IT” project

Inability to secure cross-functional commitment

Lack of disciplined project management

Unclean data

Risk management being patchy

Excessive customisation

source: ERP Asia

Deadlines missed

Ambiguous requirements

No visible executive commitment

General absence of milestones

Employee turnover

Reporting is poor

Early Warning Signals

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project governance

change managementp

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risk management

change managementp

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risk management

project governance

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The Ship Will Not Sail Until…

Board takes clear ownership of the project

Board provides dedicated resources

Board determines the quality criteria and tolerances

Board commits for contingency planning and audit

Board provides dedicated resources

Board determines the quality criteria and tolerances

Board commits for contingency planning and audit

Board takes clear ownership of the project

The Ship Will Not Sail Until…

So What This Mighty Board Is?

manages provision of

resources from multiple suppliers

governs the entire project to

ensure delivery of benefits

can well be IT or consultants

shall not be IT, as conflict of

interests is possible

delegated by the users to

represent their interests

project board roles

senior supplier executive

can be sales, marketing,

finance, etc.

senior user

Board takes clear ownership of the project

Board determines the quality criteria and tolerances

Board commits for contingency planning and audit

The Ship Will Not Sail Until…

Board provides dedicated resources

Stable Crew Throughout The Project

team member profile

in-depth knowledge of functional area

ability to see beyond functional area

excellent communication skills

does not have to be a process owner

a team player

Board provides dedicated resources

Board takes clear ownership of the project

Board commits for contingency planning and audit

The Ship Will Not Sail Until…

Board determines the quality criteria and tolerances

Perfect Clarity On Where We’re Going

automating key processes

implementing a benchmark ERP

implementing an ERP to turn it into

a star later

we’ll see, we have time

Board determines the quality criteria and tolerances

Board provides dedicated resources

Board takes clear ownership of the project

The Ship Will Not Sail Until…

Board commits for contingency planning and audit

Contingency Planning

Cortez was sent to colonise Mexico in 1518. On April 22, 1519, he landed with a large armed contingent near the site of Veracruz. There he disassembled his ships – thus ensuring that his team would stay and fulfil their objectives.

contingency options

start late and then... run

implement partially

change the scope

delay go-live

Prevention Is Better Than Cure But…

project governance

change management

risk management

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Taking The Ship To The Destination

the “what” – getting the system up and running

the “how” – project manager’s toolkit

the “how” – project manager’s toolkit

Taking The Ship To The Destination

the “what” – getting the system up and running

From The General To The Particular

time

% c

ompl

etio

n

start-up &familiarise

risk

analysis

Enough Detail To Freeze Scope

time

% c

ompl

etio

n

start-up &familiarise

design &prototype

draft

transition

strategy

signed-offrequirements

(incl. reports &interfaces) plusfully integrated

prototype

The System Is Ready For Go-Live

time

% c

ompl

etio

n

start-up &familiarise

design &prototype

final

data

transition

plan

fully configuredsolution that

passedtesting by

project teamdevelop

Go-Live And First Period Closure

time

% c

ompl

etio

n

start-up &familiarise

design &prototype

develop

data convertedUAT passedusers trained

power users placedfirst period closed

implement

support

plan

Handover To Support

time

% c

ompl

etio

n

start-up &familiarise

design &prototype

develop

implement

close

support

contract

the “what” – getting the system up and running

Taking The Ship To The Destination

the “how” – project manager’s toolkit

Project Manager Thinks Work Packages

work packages

finance sales purchasing andinventory

payroll data conversion transition

Functional Work Packages Are Similar

a functionalarea

work package content

capturing/validating requirements

defining user roles (SoD)

creating test case scenarios

customising training materials

identifying interfaces

controlling

prototyping

and

development

Data: Volume Brings Complexity

data conversion

work package content

enriching masterdata

cleansing masterdata

developing masterdata strategy

transferring opening balances

transferring transaction data

liaising with

technical

consultants

re data

specs

In The Suit Of a Transition Manager

transition

work package content

overseeing user integration test

overseeing user acceptance test

overseeing handover to support

coordinating ramp-up plans by area

maintaining go/no go checklist

prioritising

remaining

issues with

technical

consultants

project governance

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ject

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Making The System Stick

knowledge transfer strategy

communication and involvement strategy

communication and involvement strategy

Making The System Stick

knowledge transfer strategy

pumping knowledge in

Particularly Important For Dynamic Business

managing training

overseeing user manuals

creating power user institute

placing project team back

knowledge transfer strategy

Making The System Stick

communication and involvement strategy

Mapping All Stakeholders Affectedh

igh

im

pact

low

im

pact

high influencelow influence

project governance

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Risk Identification From The Beginning

description impact probability mitigation responsible

insufficient internal resources

3 3 senior executive ownership

project Board

absence of agreement on the project plan

3 3 proper planning project manager

disintegrated design of finance & business functionality

2 3 exhaustive list of deliverables agreed with

business

project manager

worsening of control environment

2 2 formal system audit before go-

live

project Board

sample risk log

Raising Issues ASAP By Anyone

sample issue log

description mitigation status responsible

absence of a single master plan

? open ?

segregation of duties: masterdata and P2P and O2C

? open ?

systems to support other legal entities in other countries

? open ?

Monitoring Project Risk Profileh

igh

im

pact

low

im

pact

high probabilitylow probability

2

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