These are six sure signs your ERP project will fail

Gerrit Olivier, founder and CEO of About IT

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You may be forgiven for stigmatising ERP projects. They’re like trucks – there may be fewer of them on the roads than our family cars and most actually arrive at their destination safely. But when they crash, the results can be far more spectacular than a car bumper bashing.

Even a mid-size company (about R100 million turnover) can lose as much as R3 million or more in failed ERP implementation costs. Plus, the company ends up right back at square one, with an outdated system and processes they already know needs replacing.

One of the major causes? When senior executives, managers and employees aren’t aligned behind the project.

If you’re considering, already embarking on, or deep into an ERP implementation, it may be worth your while to heed the clues and set yourself up to succeed.

ERP projects are enormously complex. They cannot be undertaken by one person or even the vendor or implementation partner alone. They require the collaborative team effort of the client’s shareholders, senior executives, managers and employees as well as the implementation partner’s people.

It’s no surprise that they sometimes go wrong. What’s new is that technology is no longer one of the main culprits behind the failures. Today, as with many things in life, it’s more often than not the people involved who bring these projects to their knees.

Signs the project is going wrong (and what to do about it):

• Senior executives aren’t available for meetings – if the CFO can’t reply to mails and cannot make time for a Zoom or Teams meeting to cover important information, it’s a sign. The implementation partner needs a line of communication, supported by senior executives, that commits to the project’s success.
• The vendor is told to get on with it. Managers don’t have the answers and cannot or will not access their executives so the vendor must make business decisions on the customer’s behalf. That’s only going to end in tears because the implementation partner cannot determine the policies and processes that will successfully govern the client’s business. The customer’s leaders need to be involved, regularly touching base with the teams and making a small portion of their time available to deal with important issues.
• Training is not completed. We’re all busy, everyone’s under pressure, no more so than in this time of COVID-related and other economic upheaval. But, without giving proper attention to training, the project will fail. Because the project must, at some point, be handed over to the client, unless they want to keep the implementation partner on in perpetuity (which is expensive) to run the system for them.
• The implementation partner is dancing around tough issues that keep cropping up. Customers often want to minimise the expense of ERP implementations. One way is to eliminate a third-party project manager who would otherwise act as the interface between customer and implementation partner. That’s a crucial function. Without it, the two parties must have a solid working relationship. It’s a delicate act, balancing the need to move the customer forward versus risking alienating the customer’s people by asking difficult questions. When people start digging their heels in, the risk of failure rockets upwards.
• When the client says: “Why am I paying you if I’m doing all the work?” Implementing ERP is complex and requires skill, expertise and commitment. From both parties. The implementation partner must handle much of the complexity, a lot of it behind the scenes. The best solution is to discuss this additional commitment upfront, with all parties, and remind them throughout that the project’s success is due to their collaboration.
• When you start hearing phrases such as: “Just a suggestion,” or: “Use it, don’t use it,” in meetings that perhaps the company should go back to the way they were working before, then blame usually follows close behind. That blame is almost never directed internally, for obvious reasons. It’s a sign that there was lack of commitment, the knowledge and understanding of what the ERP system does, how people should use it, and what they need to do to take ownership from the implementation partner nearing the end of the project. The correction is more costly than continuous engagement throughout the project – you will have to train your people, which can be costly. Or retain the implementation partner’s services beyond the initial scope that was agreed on at the outset.

It’s easy to think that these are “soft” issues that you would want a psychologist to handle. But getting them right can be more of a project management oversight activity that focuses the commitment, involvement and collaboration of senior executives, managers and employees with the implementation partner’s people towards a common goal.