A group of high-performing executives sit in a conference room discussing challenges that inhibit their strategic decision making, and the general consensus in the room is to implement a new system that meets their business needs. Fast-forward one year from that discussion, though, and chances are that the implementation either failed, was seriously over budget, or was several months delayed and that many of the high-performing talent has left the company and processes have still not improved.
Gartner estimates that “20% to 25% of ERP projects deliver late and/or overbudget, fail to deliver expected benefits, or end up abandoned. A further 50% to 60% are viewed by the organization as compromised in some way, typically due to the erosion of, or the failure to define, expected benefits” (Gartner, The 10 Success Factors of Postmodern ERP, Denise Ganly, August 26, 2016). With growing customization capabilities, bolt-on applications, and industry-focused ERP and software solutions on the market, the staggering growth of implementation failures may seem surprising, but these failures often have several flaws in common.
If you take a deeper look at the reasons implementations fail and, better yet, the leading practices in implementations, your company’s likelihood of failure should substantially decrease. You will find that a lot of the tactics discussed here are not just related to technology but to people, process, and/or governance associated with the implementation.
Implementation requires the right decision makers present at the table. When it comes to change management, making sure that the voices of end users are heard, understood, and acted upon is essential to a successful implementation. It is important to have end users as well as upper management from both business and IT weigh in throughout the decision-making process. This creates a culture in which “we” as a team make a decision, as opposed to one in which those with the loudest opinions determine what should be implemented. Inclusivity also increases the likelihood of user adoption. The complete business (end-to-end) and technology requirements need to be understood. Though the process may be arduous and time-consuming, end-user discovery sessions are crucial for defining what is needed from a new system or software implementation. This exploratory phase could save time and help the team better understand how the system fits into the business needs. It is wise to undergo a process improvement effort for any areas most directly affected by a proposed new system before codifying the requirements. Choosing the right system stands to improve processes, but if implemented hastily or without due diligence, it can also worsen the process or automate inefficient processes.
Technology is an enablement. Just because you implement the best, state-of-the-art software or ERP solution does not guarantee a successful execution. Systems and software are not the silver bullet to company-wide problems. Rather, technology should serve as an enabler to operational and strategic tasks and decision making. You still need end users with the knowledge and expertise to appropriately navigate the tool. While often overlooked, training can empower users to see technology as an enabler.
Customization is not always the right answer. System and software companies provide options to create customizations to their out-of-the-box solutions. While customization may appear to be a quick answer, some customizations come with a significant price tag or even delay the implementation, especially depending on whether or not the customization has been built for other companies. Determining whether to customize a solution vs. implementing the out-of-the-box solution requires weighing many factors, including costs, timeline, resource availability, future upgrades, and prioritization of system capabilities to address business requirements. Customizations and bolt-on applications can always be developed following an implementation and once users are comfortable with the new system.
Emotional exposure may hinder the best decision. Too often, a team member’s previous exposure, whether positive or negative, to a particular system or software may unduly drive assessment of what is best for the current needs of the company. Performing a detailed, objective system selection can mitigate the impulse toward emotional decision making. It is imperative to gather the business requirements, perform demos, obtain responses and feedback, and conduct informational interviews with other companies that are currently using or have used the system or software being considered. Due diligence can increase the chances of user adoption.
Turnover is an implementation’s worst nightmare. Implementation may overburden critical end users, who could find themselves stretched between day-to-day responsibilities and the implementation project. While this issue can become a bottleneck to the implementation, it can also create an unhappy work environment for key talent and even drive them to leave the company. It is essential, therefore, to create succession planning for these key roles but, most importantly, to anticipate the need for assistance and provide it (e.g., additional staffing, alternative point of contacts).
Implementation requires structure. Implementation can take several months to several years, depending on the implementation’s complexity. Having a team, whether internal or external, to manage and serve as a project management office (PMO) during the complex process is vital. The PMO should hold team members accountable, raise issues before they become problems, and ensure that the implementation stays on track.
The PMO will typically create formal project plans, develop achievable milestones, and report the progress of the implementation. In addition to a PMO, it is important to identify the appropriate team members responsible for driving the implementation, including a project sponsor. This support at the executive level should encourage further user adoption throughout the organization. Some firms may also have improved results from the functioning of an IT steering committee that helps set priorities. While implementing a new system or software can be a big change for a company, keeping these essential steps in mind can help weather the challenges that may occur throughout the process. We encourage you to visit IMA’s Technology Solutions blog (http://bit.ly/2e7j4Z9) to share your implementation stories.
November 2016
