Enterprise Resource Planning (ERP) systems play a significant role in modern businesses, acting as a central hub that streamlines and integrates various departments' activities. The integration of ERP systems with your organization's core processes results:
- Improved efficiency and productivity
- Improved decision-making
- Enhanced communication and collaboration
- Improved inventory management
- Enhanced supply chain visibility
However, implementing an ERP system is a complex and challenging process, and in some cases your implementation may fail to achieve the desired business benefits. Many researchers even state that between 50-75% of ERP implementations fail, citing reasons as varied as ineffective project management to an underestimation of the complexity involved or budget overruns1. This can result in an underutilized system, lack of ROI, or with the ERP project stalled completely. With the proper steps, these failed ERP projects can be rescued and positioned for business success.
What is ERP Implementation Rescue?
ERP implementation rescue is a set of strategies and actions that your organization can take to rescue or recover a struggling or failing ERP implementation project. An ERP implementation may fail due to a number of reasons, including:
- The project not being your organization's top priority
- The project being viewed as strictly an IT project, lacking the needed input and
ownership from process owners
- Inadequate internal resource support
- The project being rushed
- Not assessing your organization's current state pain points and must-have requirements "The top reason for an ERP project failure is the project itself. Wrong projects are ones
"
that defy conventional business rationale, creating outputs that either few people want, that add little to no real value, or that undershoot the desired benefits because they are so difficult to achieve."—Ram B. Misra, Harvard Business Review2
An implementation rescue helps to get the project back on track and ensure a successful implementation of the ERP system.
Who Requests an ERP Implementation Rescue?
When an ERP deployment starts going off the rails, who within your company typically recognizes the need for outside intervention?
The Voice of Corporate Leadership Surprisingly, it's rarely the project manager leading the implementation efforts that first raises the alarm. Often, they are too entrenched in dealing with the day-to-day fires to objectively assess the bigger picture issues compounding over time. More frequently, the calls for potential rescue come from higher up the corporate ladder — C-suite roles, such as:
- Chief operating officers (COOs)
- Chief information officers (CIOs)
- Chief executive officers (CEOs)
- IT directors
These senior leaders are better positioned to identify when the project is in danger of failing because of their greater operational oversight and strategic vision. They are able to notice that the original promised benefits that were used to justify the relatively high ERP investment are no longer achievable based on the current trajectory. Their ability to analyze from both a financial and operational lens allows them to make the critical decision to pursue implementation rescue options.
Private Equity's Vested Interest For companies backed by private equity firms, the investors themselves may be the catalysts for an implementation restart. With cash flows and ROI targets tied to specific value creation milestones and timeframes, a floundering ERP project that continues unchecked could completely derail their investment thesis.
Rather than putting their upfront capital injections and anticipated returns at risk, PE firms have every motivation to scrutinize a struggling implementation's prognosis and insist on professional rescue services to get it back on track for successful delivery.
Incomplete Consulting Engagements Clients that engage an ERP consulting firm—like Ultra Consultants— to drive their business transformation projects may choose to proceed to their Implementation phase without the consultant's support. These clients frequently experience project failure and request implementation rescue support to get them back on track. Ultra Consultants offers our services to companies needing ERP implementation rescue. Additionally, we have formed strategic and targeted partnerships with vendors to develop services that are complementary to the services they offer, including support for implementation rescue.
When is ERP Implementation Rescue Typically Required?
It is difficult to anticipate exactly when to bring in an ERP implementation rescue team. However, the typical entry points may be:
- During solution design
- Prior to and during the validation/testing phase
- Prior to and during the final deployment / cutover preparation phase
During the design phase, your organization may experience one or more factors such as: missed critical requirements, scope creep, lack of business process owner involvement or poorly understood cross-functional process flow needs. The validation phase exposes these flaws through end-to-end business flow testing of the full solution (processes, data readiness, systems integrations, and people readiness), but your organization may lack the expertise to validate the new solution correctly and then course-correct any critical failure points found. The final deployment ("go-live") phase is a crucial period where final process solution, data migrations, system integrations, and lack of organizational readiness can derail months of work.
The Basics of Implementation Rescue
Stages of Project Failure
The first stage in ERP project failure is characterized by a mild concern that things seem to be progressing poorly, even though your organization may lack the specific facts to pinpoint exactly why. Warning signs for this stage include, but are not limited to:
- Missed interim deadlines
- Lack of transparency on the "real" status
- Communication issues
- General sense that the implementation is
lagging
If your organization does not address these issues, the second stage commences and is characterized by missed major milestones that provide clear evidence of failures that were present for some time. Common signs for the second stage include:
- Blown deliverable deadlines
- Missed go-live date
- Missed validation testing goals
- Exceeded budgets
- Apparent gap between the project's
expectations and reality
Having experienced the results noted above, your organization begins to understand the key leading indicator failure points that have been present all along and derailed the project. Leading indicators that something may have failed could include one or all of the following:
- Inadequate planning
- Lack of stage / gate discipline
- Lack of leadership buy-in
- Poor data quality
- Insufficient training
- Technical issues with the ERP software itself
Implementation failures tend to manifest gradually rather than all at once, providing multiple opportunities to identify and address issues before they chain-react to a complete project failure. The general rule is that the sooner interventions occur, the better—rescuing a failing project is far preferable to having to restart from scratch after a catastrophic failure.
Common Reasons for ERP Implementation Failure
While every organization is unique, every ERP vendor has different challenges and every customized ERP solution is not the same as another, ERP implementation failures have some common traits. Understanding them can help you avoid making the same errors or help you see clearly through a possible ERP implementation failure situation of your own:
- Routinely Missing Milestones
When key dates are missed and the root causes are not thoroughly investigated, the stage is set for further delays to cascade. Leaving issues unresolved has a domino effect that can derail your entire implementation.
Maintaining an uncompromising governance process with tactical visibility and strict accountability is essential. Milestone misses must be treated as red flags, triggering comprehensive root cause analysis and concrete corrective action plans. Failure to course correct puts the transformative goals of your ERP implementation at risk.
"If issues start to come up, deal with them as quickly as you can. Don't let them fester. It does help to have an outside independent consultant help you do that. This gets a third
"
party involved—engaged by the buyer—to act as an intermediary to address issues if problems are coming up and sets remediation projects in place before they get out of hand."—Brooks Hilliard, Expert Computer Witness3
- March to Timeline Without Regard to Acceptance or Tolerance for Change
Sticking to original timelines even when your project's requirements and scope evolve is a recipe for failure. This "march to timeline" approach frequently leaves process owners and front-line users disenfranchised as critical inputs are disregarded in the relentless pursuit of go-live targets. An inflexible timeline that doesn't adapt to changing needs yields suboptimal ERP configurations unable to adequately support operations, resulting in an implementation perceived as a source of disruption rather than tangible improvement.
- Lack of Buy-In and Engagement
If you do not involve stakeholders who are directly impacted by the ERP system during the implementation process—even if it's the most robust ERP platform—the project will fail. Failing to build awareness, collaboratively design new processes, collaboratively validate the new solution, and properly train end-users results in user resistance.
Lack of buy-in inevitably leads to key process owners attempting to use the new ERP environment as an overhead replica of the antiquated systems it replaces. The transformational advantages of ERP are lost without proactively driving participation from impacted process owners and diligent change management.
- Poor Attention to Data Migration and Master Data Governance Requirements
Many ERP implementations treat master data migration as an afterthought rather than a critical path workstream. A patchwork data migration characterized by quality issues, reconciliation headaches and stubborn legacy coding will corrupt your core business processes and render new software ineffective.
Your organization must establish a clear plan for migrating master data from day one of the ERP project and must thoroughly vet any needed third-party migration tools to ensure proper functional support. Additionally, a strategy for governing Master Data is required to make sure the ERP system outputs remain valid and the proper business stakeholders actively manage any changes to master data.
- Test Management—Validating the Solution Readiness
A common misconception is that comprehensive testing before go-live is an expendable nice-to-have. In reality, lack of rigorous testing strategy almost guarantees destabilizing issues once your ERP solution is promoted to live production. Simply testing transactions in isolation misses interdependencies, integration points and real-world usage scenarios.
An ERP test doctrine anchored in traceability, full lifecycle validation—including nonfunctional demands and end-to-end process threads—is table stakes. To neglect this minimum requirement of due diligence serves up a sprawling ERP with crippling defects buried deep beneath the surface.
- Critical Paths Not Managed
Dedicated program management oversight with the authority to drive cross-functional alignment and decisiveness is vital in an ERP project. Lack of this key governance function is an impediment to surfacing issues, enforcing accountability and clearing obstacles.
Your organization must have a program management office (PMO) that is empowered to implement rigorous monitoring and control processes. A robust project governance model with an experienced PMO satisfies the need for transparency, proactively identifying risks and mitigating them before they adversely impact the project. An on-going understanding and reaction plan to critical path issues is compulsory to avoid potential roadblocks.
Why Companies Turn to Ultra Consultants for Implementation Rescue
When your ERP implementation starts failing—plagued by delays, budget overruns and uncertainty about reaching the finish line—your company needs to act decisively. If you do continue with the failing project, your business may end up wasting money on unrealized expectations and fall short of delivering the originally intended value proposition. Turning to Ultra Consultants can help your organization avoid this fate. Companies turn to Ultra Consultants for implementation rescue because:
- Prior Exposure to Ultra's Capabilities
The first place where our clients experience our services is either during our Business Process Improvement (BPI) or ERP Selection phases. During these phases, they get a firsthand preview of our extensive expertise.
Our BPI and Selection methodologies are comprehensively carried out by analyzing your organization's processes and requirements, then helping select and implement the optimal ERP solution that supports your business' future state process needs. When your organization works with Ultra from the start, you develop confidence that we are a partner with the experience, capabilities, and internal relationships to handle even the toughest implementation scenarios as true partners. So, when an ERP implementation rescue becomes necessary, turning to Ultra is a logical choice.
- Ultra Partnership and Trust
Ultra has cultivated a reputation as one of the most trusted names in the ERP consulting space. Our vendor agnostic approach—we are an independent firm that supports implementations across all leading ERP platforms—is a major benefit to our clients. Clients know that with Ultra, there are no conflicts of interest or veiled product agendas. Our sole motivation is the long-term business success of our clients, enabled by an ERP implementation that realizes maximum value for their company. This vendor-agnostic position coupled with the experience of our consultants in driving business change makes Ultra a safe and trusted choice for an implementation rescue engagement.
- The Need for Outside Consulting Becomes Clear
Even for clients new to Ultra, we take great care to thoroughly evaluate each implementation rescue opportunity. We apply the same rigor as we would to any new BPI or ERP Selection project.
Our rigorous assessment process leaves no stone unturned in assessing the current state of your project, identifying risks and challenges and developing a comprehensive roadmap to get implementations back on track. By the end of this process, your organization has a clear picture of Ultra's rescue plan and can feel confident putting your implementation in Ultra's hands.
How an Independent ERP Consultant from Ultra Helps in the Rescue Efforts
ERP vendors may provide consulting services if their software is not being successfully implemented. However, a successful ERP implementation project rescue is best approached by partnering with an independent, vendor-agnostic consultant to get the project back on track. These firms—such as Ultra—can provide a number of benefits:
- Objective, Unbiased Analysis and Recommendations
Ultra Consultants does not have incentives to advocate for a particular system or approach, and this differentiates us from vendors or consultants tied to a specific ERP platform. Our vendor-independent philosophy allows us to remain laser-focused on doing what's best for your organization, free from the potential conflicts of interest that can arise when a consultant is affiliated with an ERP vendor.
We have the freedom to critically assess all aspects of your project—the ERP system itself, the implementation methodology, organizational readiness, data and more—to identify gaps and roadblocks without being constrained by any prior decisions or agreements that may have been made.
- A Fresh Perspective and New Strategies
For ERP projects that have gone off the rails, one of the biggest values Ultra Consultants brings is an outside perspective unbounded by the original project plans or assumptions. We take a fresh, impartial look at the situation and chart a new, innovative path forward. This could mean renegotiating original statements of work, adjusting scope or timelines, or even re-evaluating the ERP system selection itself if a lack of fit is the core issue.
- Deep ERP Expertise for Course Correction
While objectivity and an outside perspective are clear advantages, independent consultants can't provide effective rescue leadership without deep ERP implementation knowledge and experience. This is another area where Ultra Consultants excels, with our deep bench of seasoned professionals that have executed multitudes of ERP deployments across a broad landscape of manufacturing and distribution industries.
Our consultants have strategic and tactical expertise across the full ERP implementation lifecycle—from underlying process needs analysis, system evaluation and selection to data migration, organizational change management to technical integrations. We apply best practices and proven methodologies to properly reset troubled projects.
This holistic expertise is essential for re-baselining your implementation. We will work to define and manage renewed processes, setting realistic expectations and establishing accountability for key deliverables with your leading project resources and with your governance teams going forward.
Rescue Steps Taken by Ultra Consultants
To help your organization with ERP implementation rescue, Ultra Consultants has carefully crafted a methodology founded on decades of experience tackling high-stakes implementations across various industries and technology landscapes.
Phase 1: Client Discovery and Scoping Ultra's rescue effort begins with a comprehensive discovery and scoping exercise. Our consultants work closely with your organization to gain a deep understanding of the project's background, objectives and specific pain points encountered thus far. This phase ensures that we have a firm grasp of the situation before charting the path forward.
Phase 2: Initial Implementation Risk Assessment Once the discovery phase is complete, we initiate a 4- to 6-week initial implementation assessment. During this stage, Ultra's experts conduct a thorough diagnosis of the issues plaguing your ERP implementation project. We leave no stone unturned, examining every aspect of your implementation—from technical architecture to project governance and stakeholder management.
The assessment culminates in the development of a comprehensive "re-set" plan, which serves as the blueprint for rehabilitating the project over the subsequent 8 to 12 weeks. This plan addresses the identified issues head-on and outlines the specific actions required to get your implementation back on target.
Phase 3: Implementation Rescue / Project Reset The reset plan helps us transition into the implementation rescue phase, where our consultants actively manage the transitions needed to course-correct your project's execution. Our extensive experience and expertise enable us to navigate the implementation through previously encountered obstacles, proactively addressing issues and mitigating risks.
During this phase, Ultra's team works hand-in-hand with your company's stakeholders to foster a collaborative environment and ensure knowledge transfer. We help your team to take ownership of the project once the project reset period is completed, and we assist in on-going management to a successful delivery. Conclusion A successful ERP implementation is critical for your organization to remain competitive and agile. However, when the implementation falters or fails, the consequences can be severe, often involving financial losses and operational disruptions. ERP Implementation Rescue is a lifeline for organizations facing such challenges to ensure a successful outcome.
Ultra Consultants has decades of experience with unparalleled success in business process improvement, technology selection, implementation management and value realization, bringing unmatched insights to get your project back on track. We conduct comprehensive assessments to prescribe the right strategy to help your organization through the difficulties and then facilitate the rest of the on-going project that will make you successful.
For more information and additional resources on how to bring our expertise right to your doorstep, visit us at ultraconsultants.com.
References
- https://www.linkedin.com/pulse/exploring-erp-implementation-unveiling-failure-rates-mike/
- https://hbr.org/2023/11/why-big-projects-fail-and-how-to-give-yours-a-better-chance-of-success
- https://www.techtarget.com/searcherp/feature/To-avoid-ERP-implementation-failure-start-with-clearly-defined-
requirements