In the last few years we have all heard a lot of statements about failed ERP implementations. Some consultants state that 70% of ERP projects fail. Frankly, I think that number is overstated. Having said that, I think there is truth in the statement that ERP implementation projects often fail to meet management’s expectations.
So Why Does ERP Fail?
Again we ask, why is this?
- Is it harder than you think?
- Do the vendors make it look to easy?
- Are the buyers too naïve?
- Do the vendors oversell?
- Do the ERP selection teams and the ERP implementation teams fail to take all the necessary steps to be successful?
The answer to all these questions is yes! This means that everyone involved in these projects has made mistakes. But the one thing everyone has in common is – as a group they all failed to set the proper expectation.
In our interviews and surveys with manufacturing companies that have gone through an ERP implementation we hear some common comments:
- I did not think it would be this hard
- We made some mistakes
- I would have done it differently
What we learn is that expectations were not set properly up front.
What about software? We often hear the SAP stories or some company just threw out the ERP vendor because it did not work. ERP software works. All of these ERP vendors have thousands of users using their software, so it is not a software problem. But if we dissect each of these problems we continue to see a common failure – setting expectations.
So How Do You Properly Set ERP Expectations?
As you plan your ERP project you need to answer these questions:
- What will a new system cost?
- How long will it take to select and implement?
- Who will be on our team and what effort is required?
- What are the costs to implement and the ongoing cost of ownership?
- What is the benefit to be achieved and when will it be realized?
Consider the answers to these questions to be the expectations.
The answers to these questions will change and will become more clear as you do your planning and due diligence on the project.
The answers will vary from company to company. There is no standard answer. The variables will be application scope, company organization, users, your project team, and vendor chosen.
There a number of sources for input to your plan. The primary sources are ERP vendors, independent ERP selection consultants, and customers of ERP products being considered. The more sources you query, the more data points you will have to establish the expectation.
Your vendor evaluation process should include an ongoing review of these expectations. They will change as you gain more information and you do more due diligence.
The devil is in the details. You cannot ask too many questions. Do your homework and get your facts before you establish expectations.