project management issues in erp is 6006

8/8/2019 Project Management Issues in ERP is 6006

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Project Management Issues

in Implementing ERP

Frdric ADAM, David SAMMON& Fergal

CARTON

Business Information Systems

University College Cork, Cork, Ireland


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Introduction

ERP Projects are large and Important projects

Critical in terms of their potential and actual impact

The track record is far from excellent

Benefit realisation is questionable Preparedness is critical but badly understood

This leads to problems during the implementation phasethat are not solved properly => dysfunctional ERP

Very low levels of end-user satisfaction are reported

Essentially different from traditional IS projects => needfor a different approach in terms of project management


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Concerns with ERP

Implementations Summarised

Problem

Finding

Business

Case

Alternative

to ERP

Prerequisites

Business

Map

Package

evaluation

Complexity

of packages

SalesOfferings

Marketing

hype

Best Fit

Analysis

Competition

Clear

decision

making

ZEROchoice

Resistance

to change

Measurements

of success

Benefits

realisation

On-going

DevelopmentOf ERP (ERPII)

Intelligence Design Choice Review

Vendor-independent,

methodology-independent

analysis


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As a result

Poor preparation for project

Lack of managerial awareness of risks / opportunities

Lack of understanding of how to select software

Lack of vision of the business impact

Poor rationale for ERP

Poor understanding of how to scope project

Poor perception of system a prioriin user community

Project management nightmare No guide book to find out where to start

Project leader may not be an experienced projectmanager (ownership)


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Case Study organisationsKey Features Firm A Firm B

Type of firm Multinational Public sector

Industry Pharmaceutical Education

Size (emp.) 100,000 2000

Turnover $21 billion (2002) Euro 200 million (approx.)

Scope of project Comprehensive Financials / Procurement / projects

Type of implement. Worldwide roll out in 4 waves Single site in 2 phases

Duration 5 years 9 months (expected)

Project leadership Steering committee Steering committee

Project managers Local top managers in sites Finance officer

Project teams Approx. 70 at each site + 45 in core team 15 full and part time

Key issues in ERP implementation

Rationale for project Seeking FDA compliance Old system crumbling

Key problems y Managing differences between sites

y Setting up the template and sticking to

ity Managing difference versions of SAP

y Saving local gains whilst implementing

single instance

y Deadlines imposed worldwide

y Communicating with staff / negotiating

changes to work practices

y Lack of awareness of magnitude of change

needed

y Managing expectationsy Trade off between doing the right thing and

doing it right

y Tight budgetary constraints and lack of top

management support

y Difficulties in getting every one to agree on

specification

y Managing different cultures internally

Deserve special mention No attempts to justify investment beyond

compliance

Comprehensive ITT process to select package


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Project Integration Management

General preparedness

Awareness of what projects entails volume of effort required, effect on staffassigned to ERP team, budget, training

Firm A: excellent on average but very

uneven between sites Firm B: no understanding of project / far

too much expected of inexperienced team


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Project Scope Management

Critical for ERP:

number of modules, number of areas, extent ofcustomisation, number of interfaces with legacs stem, size of user population

Surve s indicate most firms would change scope ininsight (*)

Change in scope mid wa through projectresponsible for most cost /time slippages

Firm A: well defined (template) but imposed by

H without consideration of local practices (timewasted)

Firm B: little thought given to scope / entiremodules added without considering impact


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Project ime Management

ERP projects are amongst the longest

Multi-wave global roll out up to years

Initial sites software versions behind last ones

In fact ERP neednt take so long

Firm A: all deadlines externally decided + no

choice

Some sites failed to keep pace

Firm B: core functionality on time, but difficult

areas (e.g.: research contracts) left behind


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Project Cost Management

ERP projects are costly or highly costly

Much of the costs are hidden to a certain

extent e.g.: training

Firm A: externally decided, but large

enough for all sites (pharmaceutical firm) Firm B: mean budget throughout

Both firms used super-users for training


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Project ualit Management

ERP projects require a serioustransformation process that must bevalidated e.g. invoicing, payroll

Many aspects require hard-to-getexpertise

Application / organisational knowledge

dilemma (eg: use of consultants) Firm A: COMPLIANCE

Firm B: new chart of accounts


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Project R Management

Project team (full time) + business as usual

dilemma who can you afford to use?

Support for project at local level

Firm A: very organised opportunities for

promotion after project no casualties

Firm B: the right people are not there + topmanagement think they can be on team and

pursue their normal duties


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Project Communication

Management Other side of coin: selling the project internally andexternally

Can change be negotiated?

How much will it cost?

Not always a case of stupid resistance to best practice

Firm A: full time consultant hired + monthly newsletter +many meetings behind closed doors

Firm B: fragmentation of certain functions makes

consultation process very tricky too many to please(on-going)


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Project Ris Management

ERP projects can jeopardise earlier work

They also disturb everyday work over longperiods

They can lead to unworkable situations(Hershey, workarounds)

Firm A: much to lose (can-do attitude)

Firm B: odds stacked against success =>actively preparing for failure by refusingproper budget allocation


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Project Procurement

Management Which one is the one? How are vendors really selected?

Firm A: SAP logical choice (FDA)

Firm B: thorough process of ITT +comparative analysis

But other cases were not so neat (politicalor unethical decisions non-decisionmaking)


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Additional Areas Specific to ERP

projects

Project Rationale (global versus local)

Project Review

Global Project Management


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Conclusions

Many common stories in the cases

ERP Projects are special

Many common stories in the ERPimplementation cases

ERP Project Management is tricky and

different Certain areas deserve additional scrutiny

project management issues in erp is 6006

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