Although the bad news is that a large percentage of ERP implementation fail due to lack of effective recovery of the project, the good news is that troubled ERP implementations can be turned around and successfully completed and deployed, even if they are right now way behind schedule, has resulted in financial losses for the client and is creating great organizational strain for the enterprise. In these types of instances, Hashtag often advises clients to re position their projects as business improvement projects rather than ERP projects.
During or after a failed implementation, the software application is likely creating huge difficulties, rather than enabling the business. Just the mere mention of the letters E, R, and P, probably causes your employees to cringe, so it’s important to focus less on ERP per se and more on how you are going to fix your business operations. With this change in mindset, you use ERP only as necessary to make business improvements to get your organization back on track.
Steps to Turnaround a Failed ERP Implementation
- Assess each area and department of the business that is being affected negatively, given the lack of a working ERP system. What are your key performance measures (order fill rate, order accuracy, procure to pay cycle time etc.)? You must ask where are your biggest operational pain points? This will require you to reach out to key business stakeholders to get them involved, if they aren’t already.
- Develop two-tiers of potential solutions, namely stop-gap / “quick fix” solutions and long-term solutions. Determine the costs and time required to implement each of the options.
- Prioritize your problem / solution combinations to arrive at the top 15-20 areas, where you will realize the most immediate business impact at the lowest possible cost. Many of these solutions may or may not involve ERP functionality. It may require deeper understanding of possible gaps in business processes and solutions that can fix these gaps. Or, it may have to do with organizational resistance to adopt a new system. IT may even be attributed to poor performance from the current implementation partner, although the selected ERP system is still a good one. Business processes, organizational change management and poor partner performance are the most common problem areas in failed ERP projects, so the solution may not even involve changing the whole ERP system. It may simply require you to reflect and review the situation, to see that it may just require you to identify a really good implementation partner who can successfully deliver what you want or may be an ERP advisory firm who can turnaround the project by taking total ownership for the project delivery and offering an added layer of risk mitigation, even if another partner needs to come in to do the implementation, under the close monitoring and guidance of the advisory firm.
- Begin building organizational momentum and confidence with “quick wins by implementing functionalities under key modules that will address business critical areas, which will allow the operations to be carried out with a reasonable level of efficiency and accuracy. Once you get some quick wins in place with the shorter-term solutions, begin prioritizing and implementing your long-term, more permanent fixes, the same way you did with your short-term problems.
- Begin implementing long-term solutions, as more time and resources start to become available.
By following some or all of these approaches, you will better position your organization to make your troubled implementation, a success and optimize the business to truly leverage the real strength of an ERP system.