Why are some ERP implementations doomed from the start to crash and burn? The team neglected to draft one of the smartest and most profoundly vital instruments available in project management: the ERP project charter.
By taking the time to plan and identify the ERP team’s concise roadmap of core goals, objectives and intent, enterprises save themselves wasted time and effort, not to mention headaches and implementation failure. Such a business process review sets the tone for the entire implementation.
What’s an ERP Project Charter?
In precise terms, an ERP project charter is the governance document for the deployment and completion of the project after the ERP selection takes place. It defines the roles and responsibilities of the implementation partners, from the ERP vendor/solutions team and the manufacturer to an ERP consultant and other participants.
The ERP project charter defines roles and deliverables for each party, whether distinct or shared. Moreover, the charter monitors the vendor’s performance throughout the implementation, with agreed upon terms and milestones. It not only provides a tracking tool but it lends accountability to all parties involved in the project.
ERP Project Charter Must-Haves
First and foremost, all members of the ERP team must agree to the ERP project charter. Buy-in from all stakeholders must occur before the team starts the first phase of the implementation. It gives the project manager the authority needed to manage and oversee the project and it delineates all of the resources required for all ERP project activities.
What are the absolute must-haves for an ERP project charter?
Endorsed by the entire project organization, the charter should include the following elements:
- Project mission
- Organization (resources)
- Organization responsibilities
- Alternative solutions
- Benefits of new system
- Costs (over 5 years)
- Expected returns (over 5 years)
For additional insight, see an archived blog post entitled “The ERP Implementation Charter: A Necessary Ingredient for Success” for why a project charter is so vital.
How Do We Start A Project?
Doug Ayers, an SAP consultant, suggests that a project charter “answers the question ‘How do we start a project?’” He goes into further detail about the essential elements of an implementation charter. A key detail not to be missed is the identification of the senior-level project sponsor who has the authority to initiate and evaluate the project, and who has budget authority. He recommends that a project charter must have:
- Project name and description
- Project purpose, justification or business case of the project
- Project manager
- Authority of the project manager
- Responsibilities of the project manager
- Measurable project objectives (no vague or general statements)
- High-level requirements
- Where products or services are involved, product or service requirements
- High-level schedule
- Initial budget
- Criteria for project success
- Name of manager who will decide if the project is successful or not
- Name of manager who is authorized to sign the project completion acceptance
- Name, title and responsibility of the project sponsor or the person authorizing the project charter
- Signature of the project sponsor
An ERP Project Charter in Action
As part of Ultra’s library of ERP case studies, the Ultra team recently worked with a Midwestern manufacturing enterprise looking to replace its legacy ERP, a CRM solution that couldn’t share data with the ERP program, various CAD programs, and MS Office and Outlook email. It was difficult to access data, the data didn’t move easily from one functionality to another with data being re-keyed multiple times, and it required data manipulation and reporting outside of the system.
In the ERP project charter, the team agreed with the following statements:
The document will govern the management and assessment of the ERP implementation and associated change management, as well as the overall project management of the multiple moving parts of parallel projects. The document is required reading by all project participants.
In the project charter, the team developed the business case for every process, from sales and marketing, quoting, and forecasting, to scheduling, engineering, design and manufacturing, keeping quality in mind throughout. They identified the justification and impact of the new solution and enumerated the KPIs for each business process. Business process transformation was an overarching goal.
The project charter clearly spelled out the mission, objectives, critical success factors, potential project risks, responsibilities and time commitments for each party and fully explained the technology management strategy, change management plan, and project methodology, with quality assurance built into each step.
Start Your Project Charter
Considering an ERP Project Charter? White paper helps you get started.
Creating an implementation charter is only one of seven key steps a company should take when undergoing an ERP selection project.
- Download the informative white paper “7 Steps for Organizing an ERP Project” to see all our recommendations.
- Ready to forge your own ERP project charter? Contact the Ultra team to get moving.