Risk happens. Especially when a manufacturing company has the goal of effectively selecting and implementing a new ERP system — likely one of the most complex and resource-intensive initiatives a company will face.
Manufacturers can improve ERP implementation outcomes after carefully assessing and managing the most pervasive risks that typically cause cost overruns, project delays and other issues.
One of the major risks we watch for is when an ERP project loses the focus on the chance for improvement and transformation of business information processes. A successful ERP project should be thought of as a business transformation, which requires change that must be managed. We’ve been successful in helping ERP project teams get back on track, focusing efforts on business transformation instead of technology implementation.
Evaluating ERP Risk
To help manage risk, we believe change management should be woven into the fabric of the project methodology and be part of the transformation journey from the start.
Within our change management service, we undertake both an ERP Readiness Assessment, and evaluate risk in areas such as.
- Project Organization Risk – We look at the ERP Project steering committee, the project manager, and the team process owners. Are the right people in the right positions?
- Scope Risk – Is the scope of the project possible?
- Readiness Risk – Are there readiness issues and risk?
- Schedule Risk – Are schedule expectations defined and are they realistic?
- Budget Risk – Is the project properly funded?
We also look at the risks of poor end-user training, or the potential for user resistance of the new system. We take a close look at the ERP training and education program, to make sure users will be adequately trained in the use of the system. We’ve seen cases where an improved education and training program reduces the risk of end-user resistance.
Our assessment also addresses any risks associated with the full implementation plan including integration, testing and data conversion.
Reducing ERP Risk
We well know the time, resources, investment and other inputs needed for ERP selection and implementation, especially when business process improvement is the end-goal. Understanding and managing ERP project risk is an important part of the transformation journey.
Please share your thoughts about ERP risk in the comments below. Contact the Ultra team to review the risks your organization faces.