30 Tactical Mistakes During ERP Implementation

8/8/2019 30 Tactical Mistakes During ERP Implementation

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Abstract:

ERP Implementations are typically well planned using various implementation

frameworks, templates and concepts, howevernearly 70-80% of all ERP

implementation programs fail, go-over budget or go live past original

deadline1. This is mainly due to the fact that while tackling strategic issues and

their risk mitigations, program teams often miss out on the tactical nuances of

implementation. Through this paper, we have tried to highlight theTop 30

Tactical Mistakes that lead to ERP Implementation failures. The data

presented in this paper is corroborated with 21 experienced ERP Practitioners

at Infosys.

This paper does not cover the mitigation of these mistakes, as mitigation will

vary program to program and can be best formulated by the team on the

ground.

30 Tactical Mistakes during ERP Implementation

- Abhishek Goyal & Prashant Rohatgi


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Contents

1. Introduction ................................................................................................................... 32. Approach ....................................................................................................................... 43. ERP Implementation Stages .......................................................................................... 64. Survey Findings ............................................................................................................. 75. Conclusion ................................................................................................................... 136. References ................................................................................................................... 13


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1. Introduction

ERP systems are capable of providing rich customer experience, high productivity and significantreturns on investment (ROI) to organizations. However, if not managed & implemented correctly,

they can also cause sleepless nights to stakeholders and can lead to massive organizationalupheaval. Many ERP implementation programs do not see the light at the end of the tunnel due toseveral tactical mistakes and oversights made along the way. Even if implementation programgets completed with agreed scope, it is believed that 41% of ERP implementations fail todeliver at least half of the stated benefits, around 57% of ERP implementations take longerthan expected and around 54% of implementation cost exceeds the budget

2. Thus, its

important for managers to understand strategic and tactical plans, success factors and bestpractices before launching a new ERP implementation program.

Through this paper, we have tried to highlight the Top 30 Tactical Mistakes that lead to ERPImplementation failures. The data presented in this paper is corroborated with 21 InfosysERP Practitioners who have vast experience that they have gathered through multiple ERPImplementations.


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2.Approach

1. The Authors based on their own Implementation experience (cumulative around 20 years

spanning ~ 10 end-to-end Programs) put together a comprehensive list of Tactical Mistakes

during different stages of ERP Implementation.

2. 21 Infosys practitioners from Manufacturing/Hi-Tech, Energy & Retail Verticals with an

average of 10 years experience each were selected to review the above list using a

Framework where each mistake was evaluated for applicability/relevance on 2 dimensions :

Dimension 1: High Probability of Occurrence of the Mistake during the Implementation

Dimension 2: High Adverse Impact due to mistake on the overall Implementation

3. The ratings obtained thereof were analyzed and bucketed as follows :

i. Mistakes which were chosen by more than 50% of the respondents as having high

probability and more than 50% of the respondents as having high impact. These were

called TROUBLEMAKERS

ii. Mistakes which were chosen by more than 50% of the respondents as having high

probability and less than 50% of the respondents as having high impact. These were

called TRIVIAL but FREQUENT

iii. Mistakes which were chosen by more than 50% of the respondents as having high

impact and less than 50% of the respondents as having high probability. These werecalled CRITICAL butINFREQUENT

iv. Mistakes which were chosen by less than 50% of the respondents as having high

probability and less than 50% of the respondents as having high impact. These were

called MARGINAL

4. The survey results revealed the following :

i. There were 20 mistakes with Low Impact and 10 with High Impact.

ii. There were 12 mistakes with High Probability of Occurrence and 18 with LowProbability

of Occurrence.

iii. There were 5 mistakes of utmost concern (having high impact and high probability)


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Mistakes Low Impact High Impact

High ProbabilityTRIVIAL but FREQUENT

(7 Mistakes)

TROUBLEMAKERS

(5 Mistakes)

Low ProbabilityMARGINAL

(13 Mistakes)

CRITICAL but INFREQUENT

(5 Mistakes)

Table 2.1: Mistakes represented in Probability-Impact Matrix

5. The subsequent section of this paper elaborates these 30 Tactical Mistakes in relation to the

various stages of the ERP Implementation Program.


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3. ERP Implementation Stages

Typical ERP Implementation Program will comprise of the following stages:

Figure 3.1: Implementation Methodology Framework


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4. Survey Findings

Based on survey done amongst 21 Infosys Program Managers/Project Managers, following are

the findings:

AA.. PPaacckkaaggee SSeelleeccttiioonn,, PPrrooooffooffCCoonncceepptt aanndd BBuussiinneessss CCaassee1) Missing Validation of Non-Functional Requirements (NFR) (TROUBLEMAKERS)

Most of the time, large ERP programs are funded by business and thus the key drivers

for ERP selection and implementation emanate from the business imperatives.

Therefore the package selection, proof of concept for the chosen package and the

solution thereof focuses heavily on meeting the business requirements and tends to

miss out on the aspect of ERP solution scalability, integrity and flexibility. This may

lead to ERP not being able to meet the Non-Functional Requirements (NFR) in the

long run, thus leading to issues around System Performance, System Upgrades,

System Integration and System Maintenance.

2) Missing Business Metrics Benchmarks (TRIVIAL but FREQUENT)

Customer Organizations typically do not have good benchmarks and baselines for

various Business metrics like # of Inventory Turnovers, % Quote to Sales Order

conversion. While writing Business case for ERP Implementation, it becomes difficult

to envisage and quantify the Business benefits, thus making the credibility of the

Business cases perceived benefits like NPV, ROI etc. doubtful.

3) Sub-Optimal Package Evaluation (CRITICAL but INFREQUENT)

There is limited clarity on the goals and objectives the organization would achieve with

package implementation. This shows up during package evaluation stage when there

is a conflict on drivers for package implementation between business and IT. This

leads to lack of comprehensive and well thought through criteria for package

evaluation and selection. This leads to a significant gap in organization requirement

and package solution delivered.

4) Package Bias and Oversell (CRITICAL but INFREQUENT)

Sometimes Implementation Partners may be biased towards one of the competing

packages due to its own internal imperatives to promote a particular package,

irrespective of the customer needs. At other times, they along with the Package

Product vendor oversell the product in their over zealousness to procure the deal.

5) ERP Implementation Efforts Under Estimated (CRITICAL but INFREQUENT)

Implementation Partner and the Customer Program Leads underestimate the costs

and scope for the ERP Implementation. They tend to go very aggressive on the cost in

an attempt to make the Business case metrics attractive and saleable to the Customer

Executives and Sponsors, only to reveal the challenges, incorrect assumptions, and

cost escalations eventually.


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BB.. SSccooppiinngg aanndd PPllaannnniinngg6) Customer Side Under Staffing (TROUBLEMAKERS)

While Implementation Partners have mature staffing estimation models for executing

the ERP Implementation, customers often struggle to get their business SME and IT

staffing right. Customer Program Managers are not able to envisage the magnitude of

work and required participation from their teams. To get upfront Organization buy-in

for the ERP Implementation, the Customer Program managers often underestimate

implementation cost and under staff. This leads to bottlenecks at several stages

during the implementation.

7) Estimation Based on Best Scenario (CRITICAL but INFREQUENT)

Due to various cost and business pressures, projected ERP Implementation timelines

and costing assume best case scenario with no obstacles and constraints and do not

take care of any contingencies, scope creep or time lags. This leads to frequent

rescheduling of the Project Plans and revision of implementation budgets leading to

dissatisfaction at the customer organization level. Typically program teams

underestimate the following in the planning stage:

i. Time and effort required for End User Training and Adoption

ii. Time and effort required for Performance testing and engineering

iii. Time and effort required to stabilize new technologies

iv. Time and effort required to involve the B2B Trading Partners

v. Time and effort required to do Conversion data validation by Business teams

vi. Time and effort required to coordinate with Product Vendors

8) Scope Volatility (CRITICAL but INFREQUENT)

ERP Implementation scope remains volatile and open for long time. It is not agreed

upon by the key stakeholders at beginning of the implementation. This leads to

midway changes leading to rippling negative effect on timelines and cost.

9) Capability and Bandwidth Overestimation (MARGINAL)

In a bid to justify their own worth, customer s IT Program teams often overestimate

their own capability and team bandwidth and thus go miser on vendor (Implementation

Partner) staffing. This leads to sub optimal staffing, program delays and associated

un-necessary tension in the program.

10) Low Priority to Peripheral Tools Deployment (MARGINAL)

Very often, the IT teams focus on the core ERP. However they pay less to no attention

to the procurement, deployment and testing of the peripheral/auxiliary tools (e.g.

testing tools, DBA tools, Job scheduling etc) until the very last stage of the Program.

This leads to overall system and solution instability and associated delays.

11) Underestimation of Enabling Activities and Expenses (MARGINAL)

Implementation Partner team often underestimates the following due to lack of clarity

and experience at the beginning of the program:

i. Visa Lead times for its team


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ii. Staffing Lead times for its team

iii. Time and effort required for bug fixes

iv. Time and effort required for status reporting, team coordination and

communication

v. T&E expenses

vi. Time required for new entrants to onboard and become effective

CC.. PPrroocceessss MMooddeelliinngg12) Conflicting Multi Site Requirements (TROUBLEMAKERS)

In case of multi site, multi country ERP implementations, the program team is not

equipped to harmonize business requirements, which suits everyone. There are

multiple mandates for the team like:

i. How to have requirements which can fit within the vanilla ERP suite.

ii. How to have uniform set of requirements for all sites/countries

iii. How to have operationally efficient and best in class processes

Sometimes these mandates lead to conflicting pulls and pressures, leading to delay.DD.. DDeessiiggnn,, CCoonnffiigguurree && DDeevveellooppmmeenntt aanndd TTeessttiinngg

13) Low Priority to Legacy Data Cleansing (TROUBLEMAKERS)

While the IT teams focus a lot on Data Modeling and Data Mapping, they keep the

Legacy Data Cleansing as a low priority action item and not addressed at appropriate

time. This is due to lack of clarity & importance of data cleansing and lack of

ownership from Business and IT teams. This leads to data quality and consistency

issues post conversion and post go live.

14) Missing Process Throughput Time Benchmarks (TROUBLEMAKERS)

Customer Organizations typically do not have benchmarks and baselines for aprocess throughput lead time. Thus when they shift from Legacy IT systems to a ERP,

there is often lack of focus and capability to measure the throughput time of the TO BE

process and solution. Business Users often complain that the throughput lead time

has worsened after ERP Implementation, while the Program Teams struggle to

measure and control throughput time, leading to user dissatisfaction.

15) Fringe Business Scenarios Ignored (TRIVIAL but FREQUENT)

While the Program teams focus a lot on the core Business requirements at all stages

of the ERP Implementation, they often tend to ignore the fringe business scenarios.

These outlier conditions are also missed during system testing and user acceptance

testing. Most of the times, these conditions crop up post go live and the new ERP

system is not geared up to handle it.

16) Inadequate Data Usage During Testing (TRIVIAL but FREQUENT)

Often the program teams execute system and user acceptance testing with limited

data. Data is not properly prepared based on business requirements, test scenarios

and test cases planned. During testing, all possible scenarios are not touched upon


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due to missing data and testing is not full proof. This leads to surprises post go live

when different kinds of data sets are deployed and used.

17) Untimely User Responsibility and Menu Mapping (MARGINAL)

User Roles and Responsibility and Menu mapping is not properly executed. At times,

its not finalized till the last moment. This leads to access issues and user

dissatisfaction post go live.

18) Lack of focus on Accounting Reconciliation (MARGINAL)

There is lack of focus on end to end accounting reconciliation between sub ledgers

and GL for different transaction types. There are no proper reports & inquiries created

upfront to enable reconciliation. This results in Finance reporting issues and delays

during financial period closures.

19) Inadequate Auxiliary Tools and Applications Testing (MARGINAL)

Often testing of auxiliary tools and Applications like Taxation, Credit Card, Export

Compliance, Reporting, Data warehousing, Job scheduling takes a backseat whileentire focus remains on core package testing.

20) System Administration Aspects Ignored (MARGINAL)

System administration aspects (like system steps, purging and archiving strategy,

workflow planning and definition, etc.) are often ignored during this phase, leading to

non optimal system performance post go live.

21) Lack of Training Leading to Shallow Testing (MARGINAL)

During testing, business users often focus their energy on learning navigation and

form level GUI right, rather than hashing out the business functionality and logic. This

happens due to lack of training before the User testing and leads to shallow testing ofthe system and thus there are basic solution level issues which surfaces post go live.

EE.. DDeeppllooyy22) Impractical Contingency Planning (TRIVIAL but FREQUENT)

ERP cutover Contingency (Plan B) Plan is impractical, too theoretical and often slow

to respond. For example, if the contingency plan is to do shipping manually after go

live when ERP warehouse interfaces fail, typically the detailed steps of how to handle

shipping manually are not documented and even if documented, mentioned steps are

not easily implementable. So, if the contingency is really invoked, people struggle to

bring the contingency plan into action in a timely fashion.

23) Tight Timelines for Migration from Legacy (MARGINAL)

During ERP Cut Over window, often the Business Team lay down very stringent and

tight window for migration from Legacy to new ERP (mostly 2 days over the weekend).

During this window the IT teams have to close down the Legacy, conduct Master and

Transaction level conversions and validations, and do Controlled Testing, Open ERP

system access and other controls. In a hurry to meet the business demands of


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minimum downtime, sometimes IT teams overlook or compromise on cutover activities

(like validations & controlled testing) which may lead to bigger issues post go live.

FF.. GGoo--LLiivvee && PPoosstt SSuuppppoorrtt24) Organizational Change Management(OCM) Backseat (TRIVIAL but FREQUENT)

More often than not, we have seen the Program OCM teams go into oblivion

immediately after go live, assuming that the task of rolling out new ERP is done.

However, they do not realize that the challenge has just started with the end users

actually experiencing the new system. This is the time, where Change Management

and Communication activities need to step up their efforts to facilitate the adoption of

the new system and help overcome negative vibes in the organization. This also leads

to user dissatisfaction and slower adoption of the new system.

25) Not Measuring Business Benefits (TRIVIAL but FREQUENT)

When the Business Case is formulated, return on investment of the ERP and overall

ERP benefit realization plan is put down. However, there is little thought given to task

of measuring the actual business benefits accrued as a result of ERP Implementation.

Operational reporting and metrics to measure the business value delivered are not

properly planned and implemented. Therefore post go live, program team often

struggle to report out the actual benefits vs. the anticipated numbers.

26) Inadequate System Check and Monitoring (TRIVIAL but FREQUENT)

The program IT teams often miss to check how the system is scaling up as days and

weeks pass by after implementation. Interfaces need to be monitored and new

extensions need to be regularly checked for performance and common issue

occurrence. There needs to be set of reports/SQLs to monitor the progress and take

requisite action to maintain system hygiene. Since program IT team is not geared up,

it leads to system performance and other design issues post go-live.

27) Premature Closure of WAR Room Support (MARGINAL)

The IT teams underestimate the stabilization period post go live and tend to pull out

the WAR room support too fast. This can backfire as users take some time to go into

depth of system functionality and will typically start noticing the hidden issues after

weeks of go live. So it should be noted that smooth first week does not mean that the

solution is stable and fully understood.

28) Poor Ticket Management Planning (MARGINAL)

Post Support planning is not adequate. Transition planning, ticket managementprocess, etc. are not thoroughly planned. This lead to chaos and too much ad-hocism

when the issues start flowing in abandon.

29) Key Staffing Changes too Early (MARGINAL)


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Implementation Partner tends to release the senior folks too fast after implementation

even without proper Project closure and Knowledge Transfer to the Steady state

support team.

30) Inadequate Change Request Management & Governance (MARGINAL)

Proper governance to handle the Change Requests post go live is not established and

this leads to delay in addressing the change requested. Sometimes business critical

changes are not handled in timely manner which leads to system non-performance as

per business needs.


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5. Conclusion

The above 30 mistakes should serve as a checklist for ERP Programs. There may be variation in

probability and impact of these mistakes from program to program. Managers should understandthe occurrence and the impact of these mistakes in their program scenario and according plan

their ERP implementation. They need to give lot of emphasis to tactical mistakes made during

initial planning and scoping as it can have multi fold impact on subsequent phases of

implementation. Also other key stakeholders should be aware of such nuances and need to

collaborate at appropriate times to make the ERP program a success.

6. References

1. Critical Success Factors for ERP Implementations: Market Perspective, ERP deals

website, Feb 2010.2. 2010 ERP Report, Panorama Consulting Group, 2010.


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About the Authors:

Abhishek Goyal ([email protected]) is an Industry Principal in the Enterprise

Solutions Group at Infosys Technologies Limited. He has an overall 13 years of experience

post his MBA, which includes 10 years of experience in the Oracle Applications space.

During these 10 years, he worked in Japan, Europe, USA, Australia and India, and has

delivered and managed multiple ERP Programs for the Manufacturing Hi Tech vertical

clients. Prior to Infosys, he has 3 years of Industry experience in the Retail Industry.

Prashant Rohatgi ([email protected]) is a Principal Consultant in the

Enterprise Solutions Group at Infosys Technologies Limited. He has overall 12 years of

experience post his MBA, which includes more than 9 years of experience in the Oracle

Applications space. In this span, he has worked, managed and successfully delivered

multiple end to end Oracle Programs for Retail, Manufacturing and Hi-Tech vertical clients.

Prior to Infosys, he has 2.5 years of domain experience in Manufacturing Industry.

2010 Infosys Technologies Limited.

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30 Tactical Mistakes During ERP Implementation

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