A roadmap for success
There are three basic building blocks to a successful ERP implementation: define the requirements; develop a plan; and implement. The marriage of these three components, coupled with technology integration and user training comprises the total effort. If an organization does not make conscious decisions regarding what to architect and what benefits must be received, the organization cannot hope to realize the maximum value creation from implementation.
The first step, requirements definition, is often given the most superfluous attention. There are a number of different types of requirements, each of which should be addressed and discussed with key stakeholders. Technical requirements will define expectations in terms of processing time, reliability, maintainability, and technical support. Functional requirements should be derived from the overall business process and gaps in ERP software. Functionality that must be included based on the business requirements should be identified and catalogued.
Finally, programmatic requirements take into account all of the implementation's end goals and the team's actions from a value perspective. The development and implementation plans should grow from these requirements and form a lifecycle implementation plan for the technology. Adopting a structured approach to managing this lifecycle implementation plan will help the team understand the decisions that are being made and, importantly, reduce the risk of failure.
Common barriers to success
There are three process barriers that are the real culprits for ERP failure. These barriers cause an elongated development cycle with poorly defined requirements and, as a result, poorly defined measures of success. The implementation team often is tasked with chasing a series of floating requirements, no optimizing process, and a false belief that technology alone will provide a silver bullet. These teams are, without fail, disappointed with the results. Specifically, the three most common mistakes of ERP implementations are the following: The technology "silver bullet" approach is one that is sometimes sold by vendors. However, there is no evidence anywhere in the history of IT that software alone will solve a business problem.
1. Focusing on technology.
Organizations too often ignore the need to define an optimal process and then use the technology as an enabler for the process. In too many instances, organizations either try to adopt a process that is inherent in the ERP solution, even if it does not fit their business requirements, or they try to shoehorn their legacy processes into a software package that is not designed to support their processes. In both cases, they sub-optimize the capabilities in the technology and don't take advantage of the opportunity to streamline their business process the entire point of technology implementations.
2. Ignoring the importance of requirements definition.
Pressed to deliver systems against pre-defined timelines that don't take into account all of the necessary implementation steps, organizations often rush the process, neglecting to build a solid implementation plan and neglecting to establish solid agreement across the organization as to what it will take to develop and implement the solution prior to implementing the technology.
3. Jumping from the requirements definition to the development phase.
ERP program remediation is required when an organization has a significant investment in an ERP implementation that has not delivered the anticipated ROI. (see Seven Reasons Big Consulting Firms Fail
In some cases, these programs are abandoned entirely, costing organizations much more than dollars. Ancillary effects include the erosion of corporate confidence in the IT function, as well as an erosion in IT staff morale.
An independent third party, skilled in program management, can preempt these negative consequences by providing a clear and honest evaluation of the current situation. This third party, however, can not be a software vendor and must have no stake in the process other than delivering business value. Looking at the current cost and schedule overruns associated with ERP implementations, as well as the number of implementations that are abandoned mid-stream, it is obvious that the business world is missing an enormous opportunity to harness technology as the business evolves and a golden opportunity for IT to deliver business value. Failure is not a given.