Implementation Nightmare

April 5th, 2010ERP, Project Management, Software Selection 2 Comments

March 2010 from IndustryWeek – IndustryWeek posed the following hypothetical problem inviting solutions to the problem which have also been published on their site.

“One year ago my company embarked on an enterprise-wide implementation, selecting an ERP system and a suite of software to address our primary business functions. This decision was not made lightly. Lestornia Lighting is a $120 million manufacturer of commercial and industrial lighting fixtures and components (e.g., sockets, lampholders, wiring harnesses, reflectors). We’ve grown incrementally over the past two decades, and our business practices and processes — and the information technology (IT) that supports them — has grown piece by piece as well. I finally concluded that the Frankenstein IT infrastructure we had cobbled together needed to be destroyed. Now I greatly regret my decision…”

Literally from the outset of our enterprise implementation, the scope of functionality, customizations, and departments and personnel engaged in the effort have spread like wildfire. Lestornia expected to be operating with our new systems six months ago; now we cannot get a projected date for when we will hit the switch. The escalation of costs specific to software licensing and the implementation have blown beyond anything I’d ever imagined. And with the infectious spread of applications and department-specific functionality and customization, our training and maintenance costs are doubling by the day.

I swear that every person in the company is working on this system and software implementation in some way or another, and no one is focused on making lighting products or focused on our customers. I am afraid that this project will, quite simply, kill Lestornia before we ever see a dime of return from our investment. How can we subdue the new monster we’ve created?”

180 View – Although the problem is hypothetical, most people have heard of similar nightmares. Our opinion is that the risks of these problems occurring have been significantly reduced, but not eliminated. There are many ways to reduce the risks but the one that seems most relevant in this case is lack of scope and requirements definition prior to the selection of the new system.

2 Responses to “Implementation Nightmare”

  1. April 7th, 2010 at 7:54 am
    Michael Pearson – CONTAX Inc. Says:

    Failed or runaway ERP implementations should never happen in this day and age. ERP systems and implementation methodologies have matured to a point where each project should be based on a clearly defined plan based on a template from repeatable past experiences.

    To address the immediate issue: Stop work on the project immediately. Call in an outside expert if necessary to accurately assess the status of the project and clearly define all remaining tasks and work items. There should be little unpredictability or uncertainty in doing this. Develop a realistic and achievable plan with dates, milestones and deliverables. Stick to the plan and go-live according to schedule.

    To address the bigger issue of how to avoid this situation in the first place, you need to go back to where the problems began – in the selection process.

    Choose a vendor and software solution that has a proven track record of success in your industry. Speak to references (yes, actually call them up and talk to them). Focus on the implementation experience and the end result, not so much the technology and the software.

    If you’re a manufacturer and distributor, stick to what you do best. Work with experts who have a proven track record of success, and let them guide you as to how to ensure the project’s ultimate success.

    Keep your vendors honest by clearly documenting and defining your requirements and write down all decisions, discussions or agreements made along the way.

    There are no good excuses for failed ERP implementation projects these days. Many before you have succeeded at this. All you need to do is leverage the experience and knowledge of those who have done it before, and you will find that your project will be done on time, within budget, and will be an outstanding success.

    Michael Pearson
    President
    CONTAX Inc.

  2. April 7th, 2010 at 9:20 am
    David Blinick Says:

    The main problem, in my opinion, is a “deep” change related problem exacerbated by the size of the project. Whether doing ERP or implementing a large, single-focus, best of breed application, the same problems arise. In my experience in doing software implementations and development projects, it is very hard to satisfy operators and managers when both tools and processes are changing. Most people can only deal with a single vector of change at a time. Large projects that do not take this real implementation constraint into account are more likely to enter the serious problem zone. Almost all discussions in this area tend to focus on the issues of good project management practices (which are fundamental to a good implementation) but do not discuss the issue of behaviour of the user community and the real constraint that this imposes on implementation options.

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