Enterprise Software

The difference leadership makes when it comes to successful ERP projects

ERP projects can be complicated to implement, but sometimes it's not just technical difficulties that can derail smooth adoption. Andrew King illustrates the importance of leadership in a project plan.

A new client contracted with us to come in and clean up a really "bad" ERP implementation. By "bad," I basically mean the following:

  • the integrations between various systems sometimes worked and sometimes didn't
  • users lacked training in various elements of the system
  • management couldn't get timely or accurate reports out of the system

Like any other objective consultant, we first looked at the work that was done to integrate the systems, training, reporting, and general system operation. The system was Dynamics GP, a mid-tier ERP and accounting system specifically for small to medium-sized businesses.

Shockingly, we found little wrong. Technically speaking, the system worked well.

We then looked through all the documentation supplied by the implementation vendor and, to our surprise, found numerous documents outlining how the interfaces worked, the training classes delivered, and even exams that the staff had taken to ensure that they were comfortable with the application.

Baffled by the fact that we had looked at all the "technical" aspects of the implementation and come up empty, we then focused on the "people" side of the business.

We asked a simple question: "Who, in the company, was the project sponsor?"

It was as if we had dropped a bomb. No one could definitely answer that question. We probed further:

  • "Who is responsible for making sure that any interface errors are handled in a timely manner?"
  • "Who refines policies and procedures as part of a continuous improvement process?"
  • "Who trains new users when they join the company?"

No matter what we asked regarding the "people" aspect of the project, there were very few answers.

Bingo! We knew what had gone wrong.

So our simple recommendation was for someone to be designated as the "implementation sponsor," and we, in concert with this individual, designed a plan to clean up the existing interface errors, retrain the staff, and modify policies and procedures to address operational problems. We also designated individuals in the organization to be responsible for various aspects of the system (training, continuous improvement, policies/procedures) on an ongoing basis.

Ironically, there were few system changes that we ended up making.

Although it's not "rocket science" that every successful ERP project requires leadership and project sponsorship (something I've written about before), this was a great example of what can happen when leadership isn't present or fails. The only significant change that was made was in the leadership and ownership of the project. With an individual at the top to drive the results and hold individuals accountable, everything fell into line.

Sometimes the simplest things are the most difficult.

About

Andrew King is a Senior Partner with WebSan Solutions Inc. WebSan Solutions Inc. is a Toronto based Microsoft Dynamics Certified Partner with a focus on achieving significant business benefit for Professional Services, Manufacturing and Distribution ...

2 comments
dlovep
dlovep

If the project is only about ERP that's fine, but ERP actually is a gold mine for BI and many other fields, sadly company implement ERP dont realize that ERP not just a Technical Rule to the workflow but also by collecting those ERP data you can implement a better way to deal with many aspects of development and evolute the business into a different dimension. Just a simple Warehouse module can give you hints of how you manage and the way to get better of inventory management. If you dont have ERP you guess by what figure ? You cant control Market, but if your company have integrated ERP, at least you know what and when things happening it's a stepstone for departments like Marketing, Sales and Supporting Department.

TechRepublic
TechRepublic

I think that most of your major points can be said of any project. Every project requires a sponsor, a champion in a position of power from which you can gain legitimacy. Additionally, leadership, organization, management, and accountability are all vital parts of any project. So what makes ERP projects more troublesome than other projects? It has been my experience that ERP projects go off the rails for two reasons. First, I think that many organizations undertake ERP projects without any understanding, or worse, incorrect understanding of how their workflow and supply chain actually operates. The implementation happens at a technical and managerial level that is removed from the actual operational level to the extent that there are incorrect assumptions about how things actually get done. Then once the roll-out of the systems occurs, there is reluctance to use the new systems and extensive workarounds are created by the staff that uses the systems, negating the productivity gains that are hoped for. Secondly, as Eli Goldratt has taught us, when new technology is added a systematic review of the business rules that were in place that enabled the old technology must be reviewed and changed before the productivity gains of the new technology can be realized. Too often, an ERP is put in place that could give you instant feedback of production, sales, inventory, etc., but reports are run once a month just like they were in the old system because 'that's the way we've always done it'. Your tech just got more agile, but your decision-making capacity is just as slow as it was before because of the rules that make up your process. The multiplier in these difficulties is the visibility and costs involved with most ERP projects. There is added pressure for positive results when you have a project that is as costly and touches nearly every part of a company like an ERP project typically does. Technical excellence is generally not the complaint in a failed ERP project: The data is usually good, the page-load times generally snappy, the interfaces almost always better than before. The complaint is that the system doesn't actually make the decision-making process within a company any better and it doesn't actually make them more money.