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 gt
  dysfunctional ERP
• Very low levels of end-user satisfaction are
  reported
• Essentially different from traditional IS
  projects gt need for a different approach in
  terms of project management

3
Concerns with ERP Implementations Summarised
Intelligence
Design
Choice
Review
Problem Finding Business Case Alternative to
ERP Prerequisites
Best Fit Analysis Competition Clear decision
making ZERO choice Resistance to change
Measurements of success Benefits realisation On-
going Development Of ERP (ERPII)
Business Map Package evaluation Complexity of
packages Sales Offerings Marketing hype
Vendor-independent, methodology-independent analys
is
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 neednt 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 gt 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