Published on the 28/10/2015 | Written by Owen McCall
Many years ago, writes Owen McCall, a contribution to a study on ERP implementation failures threw up a completely surprising response...
Having been involved in a number of ERP projects over the course of my career, a researcher asked for insight into a project which hadn’t gone quite to plan. As it happened, the most recent project fell squarely into that category and, while my involvement was only peripheral, it remains as one of my less fine moments.
The outline looks like this:
- The project changed sponsors three times before the go-live. Two of the sponsors were CEOs who subsequently left the business.
- The Project Manager changed three times owing to a combination of reasons which included non-performance.
- The implementation partner, while skilled in the software, had no experience in the vertical industry or some of the critical modules implemented. When this gap was identified, the vendor did not bring in skills to address it.
- Several recommendations were made to reduce implementation risk. None were acted upon.
- While there was extensive involvement from across the business, including formal sign-off on designs and benefits, in hindsight it was clear that business owners had no idea what they were signing-off on.
- The project was late and cost about double the originally planned sum.
- On go-live, the business lost visibility of key business assets and processes and operations effectively ground the business to a halt.
The upshot of all this is that it took an additional two years of hard work and frustration to get the implementation to the stage where it was actually supporting the business, rather than holding it back.
Disaster and ruin…but not too bad
As can be imagined, this experience is the source of several of the ‘implementation scars’ that all experienced IT pros seem to carry. Having related this tale of woe to the researcher, his response was: “You know, when it comes to ERP implementations, this is one of the most successful I have heard about.”
The feedback was stunning. As an industry, we struggle to deliver on our projects…but to consider this a success?!
Our industry’s poor track record in delivering projects is well documented; examples like this one are all too common. The statistics are confirm the story, with most commentators pointing to an approximately 50 percent failure rate across all IT projects.
That is, one in two projects fail to deliver what they were designed to deliver in terms of their cost, timeline, desired outcomes or some combination of all three. To make matters worse, the failure rate seems to rise as projects grow in size and complexity; ERP implementations are among the largest and most complex projects that organisations ever tackle.
Usual suspects (and a wider perspective)
While most commentators seem to agree on failure per se, there is less agreement on the reasons why projects fail.
There are the usual suspects:
- Uninvolved or ineffective business ownership and sponsorship
- Lack of planning leading to unrealistic expectations
- Limited or no change management and training to support users, and (my personal favourite)
- Lack of definition about what the organisation is trying to achieve in the first place
While these issues are real, is there a more basic reason our largest and most complex projects fail so often? Perhaps it’s because they are, well, large and complex. Being large and complex, they are by their very nature difficult, particularly for organisations which haven’t done it before. It’s even true for those which only do it occasionally.
In other words, this is the case for pretty much everyone, as organisations don’t implement an ERP every day.
If complexity really is at the root of our problems is, then the best solution is reducing complexity and scale to levels that teams can consistently execute on.
This can be difficult for some projects, but for many it is entirely possible to plan a series of rolling implementations that build on that which was previously established. In so doing, we can begin to improve project success rate and move towards fulfilling the mandate of delivering value that differentiates our organisations.
Passionate about using technology to make a real difference to businesses, communities, families and individuals, Owen McCall has focused his career on understanding and answering this question: “How do you harness the power of IT to deliver value?”
An independent IT consultant, he is a former CIO of The Warehouse.