Project Management Issues in Implementing ERP

1. Project Management Issuesin Implementing ERP Frédéric ADAM, David SAMMON & Fergal CARTON Business Information Systems University College Cork, Cork, Ireland

2. 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

3. 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

4. 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)

5. PMBOK

6. Case Study organisations

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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)

14. 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

15. 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)

16. Additional Areas Specific to ERP projects • Project Rationale (global versus local) • Project Review • Global Project Management

17. 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