The sheer size and complexity of enterprise resource planning (ERP) implementations makes managing these projects difficult. An ERP package touches the entire organization and can affect nearly every employee. These projects involve all aspects of a company – including people, processes and technology.
An ERP system facilitates the flow of information across business units. It allows for seamless integration of systems and creates a holistic view of the enterprise to support decision making. In many organizations, the ERP system is considered the lifeblood of the enterprise. Problems with this key operational system will have a dramatic impact on the ability of the enterprise to survive and grow.
In order to mitigate the risks involved with implementing an ERP successfully and ensure the company receives the benefits of a successful ERP solution, every project needs solid and effective Project Management. An experienced project manager will ensure that risks are identified and responded to throughout the project lifecycle.
Some of the common risks to an ERP project include:
- Large project size and complexity- Many companies underestimate the magnitude of an ERP project. A Project Manager will assist with ensuring that a realistic project plan and timeline are developed that consider the scope and impact on a company’s resources.
- Needs to be business lead – Often IT is given the ownership of the project without being armed with the resources and capabilities to execute on the project. A Project Manager will assist with ensuring that there is Executive Sponsorship and that there is appropriate representation from all business areas.
- Staffing – Due to the sheer size of ERP projects, there are many tasks involved over an extended timeframe during the implementation. Company resources are usually given these extra tasks on top of their day to day duties. It is imperative that enough resources are dedicated to the project and they get sufficient time and support to complete their tasks. Effective Project Management will ensure this happens.
- Organizational Politics – Alignment and stakeholder involvement is critical. A Project Manager will involve stakeholders from functional department’s right from the start to increase chances of project success. Involving stakeholders to help increase project buy-in and ensure alignment throughout the life of the project is essential.
- Unexpected Gaps – It is very difficult to assess 100% software / business fit during the sales cycle. Once a project is launched and the team has the time to delve into the details, gaps are often identified. Effective project management will ensure that gaps are tracked and decisions are made on how to address them based on impact to budget, timeline and resources.
- Scope Creep – Controlling the project scope includes influencing factors that create changes to the scope, as well as managing change requests and controlling their impact. Project Managers will be able to identify scope creep, process the scope change requests through an integrated change control process and manage the implementation of scope changes after approval.
- Resistance to change – It is human nature to resist change and the impact the user community has on an effective implementation should not be underestimated. Change Management – an effective approach to change in an organization, is something that an experienced Project Manager will address during the implementation process by defining organization readiness and managing communications.
BDO offers effective Project Management support through the ERP implementation by providing resources that offer essential leadership and people skills, in addition to a sound methodology and project tracking tools.