1 15040 Six Software Implementation Errors to Avoid

8/3/2019 1 15040 Six Software Implementation Errors to Avoid

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Six fatal mistakes to avoid in ERPimplementations

Peter Clarke, IBS Australia


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Six fatal mistakes to avoid in ERP implementations

Six fatal mistakes to avoid in ERPimplementations

Introduction

It is a well known fact that there are hundreds of horror stories out there of

things that have gone wrong with ERP systems implementations and like all

bad news it is often exaggerated so as to guarantee a dramatic effect on the

recipient audience.

The bad news is you cannot turn round and say nobody told you when you

also make the same mistakes and it is yourorganization that is being

discussed and fingers pointed or worse still; heads rolled. Just to make the

message even more dramatic, it is never the head of the senior sponsor that

rolls. Sobering food for thought so that you take just a bit more care in

preparing your implementation plan.

The good news? Getting it right is a reasonably simple thing to do; infect the

keep it simple approach is probably the best piece of advise you could give

anyone who is about to embark on a system implementation.

Nobody likes talking (or writing) about mistakes so please excuse the poetic

license when I approach this by explaining what you should do to avoid the

top six most common mistakes.

Fatal mistake number 1

Failing to ensure your implementation consultants fully understand your

business and stay for the project duration.

You and your people know your business inside out and every day you walk

the walk and talk the talk without having to think about it. Your implementation

consultants on the other hand do not know your business that well so it is

important that you schedule time to bring them up to your level of knowledge.

This applies obviously to processes, policies and procedures but most

organizations fail to include people and culture in the mix and in some cases

that results in consultants with the correct technical skills but the wrong

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behavior style. Believe me, it is worth the extra effort to make sure your staff

and the consultants are comfortable with each other.

While we are on this topic, you should make sure (as best you can) that your

consultants are with you for the duration of the project. I have just proposed

that you invest time to educate your consultants in the ways of the business

and the last thing you need is to find they are part of a consulting pool and you

are now faced with explaining everything again to the next consultant who

arrives on your doorstep.

Best advice

1. Hold your system provider accountable for continuity of project

consultants and if necessary make this a contractual obligation with

financial penalties each time you have to re-educate or re-orientate a

new consultant

2. Ignore your system provider if he tells you they have a formal handover

process for new consultants on your project unless:

It is an agreed part of your project plan

It takes place on your premises

Your people are present and part of the process


Lack of frequent and realistic milestones throughout the implementation

project.

Your implementation project will take anything from 6 months to well over a

year to complete and it will directly impact changes to the 4 Ps (People,

Processes, Policies and Performance). So, in developing your project plan

you should always have the ability (at any time) to answer three critical

questions:

1. Where are we?

2. Are we there yet?

3. How do we confidently know we are there?

By setting frequent milestones at key points along the project timeframe you

will be able to quickly measure your progress and more importantly celebrate

achievement with the team (and everyone else) as the project evolves on time

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and on budget. Of course, this is also the time to make adjustments if for

whatever reason the project is not going to plan.

The main thing to remember in setting such milestones is the KISS principle,

to make sure the milestones you choose are simple to measure and better still

obvious even to blind Freddy. That way your project team and your staff will

be able to see the progress and they will maintain high moral (confidence)

even during difficult phases of the project.

Best advice

If you do not set simple and realistic milestones then measuring progress will

be similar to plotting a ships forward course by studying its wake!


No dedicated, high quality people in your implementation team and no

compensation scheme in place for them.

It is an unfortunate reality that the people you really need in your

implementation team are undoubtedly your best people and it is pretty much

guaranteed that they are also the busiest and least able to find additional time

for the project. The best thing you can do is find ways to offload some of their

daily workload onto junior staff so they do have time to focus their expertise

on the implementation project. Better still, by giving junior staff the chance to

prove themselves at a higher level you also gain wider spread of skill in the

business and identify potential promotions at the same time.

One thing for certain is that both the junior people and you are newly found

project team will learn from their experiences and be a more valuable asset to

you in the future so if I can offer some very simple advice: be ready to

compensate them for their increased efforts and new skill sets.

I have seen many different ways of rewarding project staff ranging from

revised job descriptions and salary scales to higher duty payments but by far

the most effective is the double whammy bonus. For a major European

pharmaceutical company this meant putting a cash bonus against

achievement of each major milestone event in the project and making each

achievement a very public celebration with the appropriate drinks and nibbles

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included. A final well done bonus at the end of the project together with a

long weekend break (an extension to their normal annual leave) made sure

that everyone realized they were respected for their efforts.

Best advice

1. In the overall scope and cost of your project the additional bonus and

public recognition will pay dividends well past the life of the project and

in ROI terms the results are priceless.

2. Make sure any bonus has a WOW factor, for example, it includes an

amount that makes the recipient proud to have been part of the team

and that they are being respected for the long hours and hard work.

Note: there is no guide to the dollar reward but a recent company ensured

each member of its key project team a USD 20,000 bonus across the 16

month project.


Have an inadequate budget for training users on the new system.

The best way to offer this advice is by way of quoting from experience. Almost

every organization approaching systems implementation fails to budget

sufficient dollars and time for training and the end result is that uptake on new

systems, processes, policies is slow and the immediate effect is longer time to

benefit.

I remember attending several client project meetings with a former colleague

(we will call him Chris) who as a project manager had an impressive record of

implementations under his belt. His first advice every time was whatever

figure you have budgeted for trainingdouble it! and in almost every single

case he was spot on. The one where he was proved wrong? The CFO had

previously worked for another company where Chris had implemented

systems and he had already learned from Chris advice and budgeted

accordingly.

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Best advice

As soon as you have finished reading this article, go and have a look at your

implementation budget and pay particular attention to training, just in case

your project manager turns up and says HiI am Chris..


Making modifications to the standard system without carefully weighing

benefits against risks.

There is a wonderful tendency in many organizations to quickly modify the

system in areas where it does not match present business processes and the

end result is a system where future upgrades become extremely difficult to

apply and any help desk support you may have is always compromised

because help desk have to know about your modifications before they can

help you.

So the rule ofThe Three Ys approach is one I saw adopted by a wise CEO

that I had the pleasure of working with. His general approach to any request

was to see if it satisfied the three Ys:

1. Y are we considering this request and what is the proven measurable

benefit?

2. Y have we not looked at all the alternatives and their risk / benefit first

before choosing to modify?

3. Y do we not see what other companies have done in this areaunless

we are the first there must be lessons out there that we can learn from.

Best advice

1. Keep the three Ys as an integral part of your decision making on

anything that is a deviation away from the agreed project plan

2. Make a point of engaging with other companies in your industry who

may have gone before you and listen and learn from their experiences

Note: I remember one organization where the CEO personally invited key

people from another company to attend their project milestone meetings. The

purpose was for those invited to bring their knowledge and expertise to the

table but more importantly they were not constrained by internal politics so

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were inclined to ask the questions that everyone else wanted to ask but for

various reasons could not.


Failing to protect and insure the most critical parts of your business.

Theres a story with this one and like good stories, it is set in Paris. The

Managing Director of a large pharmaceutical firm is about to sign a contract

for new systems and he pauses before signing to seek three guarantees from

his software vendor:

1. A guarantee that his new system will never, neverput him in a position

where he could not take orders from his customers

2. A guarantee that his new systems would never, neverprevent him

from dispatching customer orders from his warehouse

3. A guarantee that his new systems would never, neverput him in a

position where he could not accept his customers payments and put

their money in his bank account

His requests were straight forward - selling products, delivering them to

customers and getting paid for it was the absolute core of his business and

he wanted guaranteed back up systems in each of these critical areas to

ensure he was covered in the event of any unplanned system failures. What

he was also saying was that other non critical areas could manage with

alternative processes at least for 12-24 hours without any major disruption.

Best advice

The lesson to learn is to take a long hard look at your business and identify

the critical areas that you need to have available 24/7 and then talk to your

hardware and software vendors to make sure they can provide adequate

backup / recovery options to keep you operational when sods law strikes.

Conclusion

Even with so many catastrophic examples of companies going bankrupt due

to failed software implementations, many companies still do not pay enough

attention to the risks involved. Adequate planning and preparation is essential

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to help you identify and manage the potential risks. A good implementation

consultant can help review your current business practices, goals, risks and

articulate a solid implementation plan.

One of the most important things you can do before commencing the project

is to select the right software package and vendor. An ERP system is a long-

term investment, so finding a vendor with the right fit for your business

requirements, and with whom you can build a partnership for the next

5-10 years is essential. Talk to other companies who are currently using the

package you are considering and look into their experience of theimplementation.

With some careful research and planning, you can avoid making the six fatal

mistakes!

Peter Clarke: With more than 20 years of experience in product and

applications development, project management, and customer support

management roles, Peter Clarke has led ERP and SCM projects for

customers such as The Laminex Group (Australia & New Zealand), Sigma

Pharmaceuticals (Australia), Miele and Hino (Australia & Asia). As such, Peter

can offer insights into supply chain collaboration and visibility, demand

planning and forecasting (inventory optimisation), e-Commerce, enterprise

applications integration, as well as business performance management. AsChief Technology Officer at IBS Asia Pacific, Peter directs the development of

integrated ERP solutions for optimising the supply chains of customers in

Asia, Australia and New Zealand, across industries such as automotive,

electrical, consumer durables, and paper & packaging.

Would you like to know more?

Contact IBS today:

[email protected]

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1 15040 Six Software Implementation Errors to Avoid

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