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Project Management Issues in Implementing ERP. Frédéric ADAM, David SAMMON & Fergal CARTON Business Information Systems University College Cork, Cork, Ireland. Introduction. ERP Projects are large and Important projects Critical in terms of their potential and actual impact
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Project Management Issuesin Implementing ERP Frédéric ADAM, David SAMMON & Fergal CARTON Business Information Systems University College Cork, Cork, Ireland
Introduction • ERP Projects are large and Important projects • Critical in terms of their potential and actual impact • The track record is far from excellent • Benefit realisation is questionable • Preparedness is critical but badly understood • This leads to problems during the implementation phase that are not solved properly => dysfunctional ERP • Very low levels of end-user satisfaction are reported • Essentially different from traditional IS projects => need for a different approach in terms of project management
Concerns with ERP Implementations Summarised Choice Intelligence Design Review Problem Finding Business Case Alternative to ERP Prerequisites Measurements of success Benefits realisation On-going Development Of ERP (ERPII) Best Fit Analysis Competition Clear decision making ZERO choice Resistance to change Business Map Package evaluation Complexity of packages Sales Offerings Marketing hype Vendor-independent, methodology-independent analysis
As a result • Poor preparation for project • Lack of managerial awareness of risks / opportunities • Lack of understanding of how to select software • Lack of vision of the business impact • Poor rationale for ERP • Poor understanding of how to scope project • Poor perception of system a priori in user community • Project management nightmare • No guide book to find out where to start • Project leader may not be an experienced project manager (ownership)
Project Integration Management • General preparedness • Awareness of what projects entails – volume of effort required, effect on staff assigned to ERP team, budget, training… • Firm A: excellent on average but very uneven between sites • Firm B: no understanding of project / far too much expected of inexperienced team
Project Scope Management • Critical for ERP: • number of modules, number of areas, extent of customisation, number of interfaces with legacy system, size of user population • Surveys indicate most firms would change scope in insight (*) • Change in scope mid way through project responsible for most cost /time slippages • Firm A: well defined (template) but imposed by HQ without consideration of local practices (time wasted) • Firm B: little thought given to scope / entire modules added without considering impact
Project Time Management • ERP projects are amongst the longest • Multi-wave global roll out up to 5 years • Initial sites 2 software versions behind last ones • In fact ERP needn’t take so long • Firm A: all deadlines externally decided + no choice • Some sites failed to keep pace • Firm B: core functionality on time, but difficult areas (e.g.: research contracts) left behind
Project Cost Management • ERP projects are costly or highly costly • Much of the costs are hidden to a certain extent – e.g.: training • Firm A: externally decided, but large enough for all sites (pharmaceutical firm) • Firm B: “mean” budget throughout • Both firms used “super-users” for training
Project Quality Management • ERP projects require a serious transformation process that must be validated – e.g. invoicing, payroll… • Many aspects require hard-to-get expertise • Application / organisational knowledge dilemma (eg: use of consultants) • Firm A: COMPLIANCE • Firm B: new chart of accounts
Project HR Management • Project team (full time) + business as usual dilemma – who can you afford to use? • Support for project at local level • Firm A: very organised – opportunities for promotion after project – no casualties • Firm B: the right people are not there + top management think they can be on team and pursue their normal duties
Project Communication Management • Other side of coin: “selling” the project internally and externally • Can change be negotiated? • How much will it cost? • Not always a case of “stupid” resistance to best practice • Firm A: full time consultant hired + monthly newsletter + many meetings behind closed doors • Firm B: fragmentation of certain functions makes consultation process very tricky – too many to please (on-going)
Project Risk Management • ERP projects can jeopardise earlier work • They also disturb everyday work over long periods • They can lead to unworkable situations (Hershey, workarounds…) • Firm A: much to lose (can-do attitude) • Firm B: odds stacked against success => actively preparing for failure by refusing proper budget allocation
Project Procurement Management • Which one is the one? • How are vendors really selected? • Firm A: SAP logical choice (FDA) • Firm B: thorough process of ITT + comparative analysis • But other cases were not so neat (political or unethical decisions – non-decision making)
Additional Areas Specific to ERP projects • Project Rationale (global versus local) • Project Review • Global Project Management
Conclusions • Many common stories in the 2 cases • ERP Projects are special • Many common stories in the ERP implementation cases • ERP Project Management is tricky and different • Certain areas deserve additional scrutiny