What’s the Best Approach to Project Management and ERP Implementation?
As an independent ERP consulting firm, Ultra has guided manufacturers with project management leadership for hundreds of enterprise software projects over the years.
Because of this, we know that competent project managers coupled with a proven methodology are the key to a successful enterprise software implementation.
Conversely, inadequate project management practices and inexperienced resources are proven root causes for the failed implementations we have seen and subsequently rescued.
A recent ERP implementation survey confirms this perspective and tells the full story.
Ultra Consultants commissioned researchers from Mint Jutras to conduct a survey of more than 300 manufacturers and distributors, focusing on the success of their ERP implementations in terms of schedule, cost and return on investment (ROI).
The survey, titled The Real Facts about ERP Implementations, reviewed goals and expectations, whether or not they were achieved, and why.
The survey revealed that reasons for implementation success had to do with people, process and effective project management – not just software. Key success factors include project organization and change management, which are at the core of a project management approach.
Reasons for lack of implementation success include inadequate project planning – once again the hallmark of effective project management.
Effective Project Management and ERP Implementation
When looking at the most effective approach to project management and ERP implementation, note that project management is an integrative endeavor, where every action, or failure to act, can affect your chances of success.
Key requirements of effective project management are as follows:
- The project manager assigned to the ERP project should be experienced and have a portfolio of multiple projects like yours.
- Your project manager should have a track record of leading successful improvement initiatives, enterprise software selection activities, enterprise software implementations and organizational change management projects with reference-able customers and measurable results.
- Consider structuring an enterprise project management office (PMO) that reports directly to an executive steering committee. This approach is paramount for managing resources and the project plan.
- In addition to having an experienced project manager, the PMO should include team members from across the enterprise who are accountable for the project’s success.
An Implementation Partner or a Transformation Partner?
When manufacturers and distributors turn to Ultra for project management of an ERP implementation, they benefit because our team is up to speed on the organization’s future state needs.
When Ultra guides enterprise software selection, our team is already embedded with key resources and functions as a transformation partner instead of a software delivery provider.
More than guiding the implementation alone, Ultra acts as a transformation partner by capturing the benefits of the new technology, which we identify during the business process improvement and selection phase.
The full transformation process continues after implementation where we seek to verify completion of significant Opportunity Matrix items along with Roadmap planning / Business Releases.
Ultra allocates only the staffing needed to ensure all critical implementation deliverables are covered – driven by a joint work-split analysis during the Selection Phase.
Comparing Approaches to Project Management
When comparing approaches to project management and ERP, it is useful to list out the various approaches available to the ERP project team.
We encounter three main implementation strategies in our engagements: using a software vendor, using a third-party service, and using internal DIY resources.
> Using a Software Vendor for ERP Implementation
Using a software vendor for ERP implementation is a typical approach in the marketplace. But the approach has its limitations.
While the software vendor knows the technology and its functionality, the vendor is only focused on the software implementation. Vendors, as a rule, do not engage in any business process improvement or transformation activities nor do they uncover opportunities for process change found during the BPI and Selection Phases.
Moreover, vendors do not always cover all elements needed for a successful implementation – many implementation risks occur in areas that vendors do not review in their implementation methodology.
> Using a Third-Party Implementation Service
Much like software vendors, third-party implementation services generally focus solely on the software implementation.
They frequently lack a strong project management capability, a robust methodology and a background in business process improvement/technology selection opportunity analysis outcomes.
Ultra has often encountered third-party implementation services that lack the full knowledge of a vendor’s software, which means the vendor needs to be involved in the implementation anyway.
> Using “DIY” Internal Resources
It is rare indeed to encounter a manufacturing or distribution organization that has sufficient staffing to run a successful end-to-end implementation without external support and expertise.
Using a DIY approach leaves the company open to critical risks, including difficulty identifying correct internal skillsets, inability to staff internal resources already allocated on other projects, and no clear career path available to the internal team after project completion
Other issues with a DIY approach involve lack of internal methodology that covers all work streams to achieve a low-risk project, and a lack of the ability to manage the more technical activities of the software vendor.
Ultra has been called upon many times to rescue manufacturers taking on an internal enterprise technology implementation project.
The Ultra Approach
Designed to counter the limitations described above, Ultra’s ERP project management services support the entire scope of the project to deliver business process improvement. The Ultra approach:
The Ultra approach:
- Goes beyond simply using a method — our tools and templates accelerate delivery
- Spans and integrates multiple disciplines, allowing us to approach the implementation from multiple perspectives and use the full breadth of Ultra’s capabilities
- Is scalable to allow for different types of projects, including an implementation with a single release, multiple releases or roll-outs, a business process transformation, a reimplementation, or an ERP upgrade
- Provides a rich information repository that is continuously updated based on our implementation experiences. This repository is captured and shared with our clients as projects progress and all work products are available long after your project is completed
When Ultra guides an implementation, the on-boarding is a specific Selection Phase deliverable and covers risks and risk migration. The most common risks – delays, cost overruns, and undue complexity – can be mitigated with proper preparation and by weaving organizational change management into the entire fabric of the project methodology. Ultra stands by its proven methodology of business process improvement and technology implementation coupled with risk mitigation.
6 Software Selection & Implementation Pain Points + Solutions
Software selection and implementation processes often present challenges of their own. To steer you around trouble and help you drive success, Ultra’s experts compiled a list of pain points and solutions to be aware of as you embark on this journey.
Jeff is the founder of Ultra Consultants, a well-known voice in the ERP consulting industry and an expert on ERP solutions for discrete and process manufacturers. Over the last 40-plus years, his companies have helped more than 2,000 organizations improve their business processes, select ERP software and implement advanced solutions.