This is why you need to make your ERP vendor more responsible
By Gerrit Olivier, MD of About IT.
ERP projects are notorious for failing to deliver the goods. It's also an area in which only the biggest customers tend to have any experience.
That's one of the main reasons you can forgive them for failing to ensure vendors own the project. And vendors failing to own the project is one of the main reasons why ERP projects fail.
But we shouldn't necessarily jump on the vendor-bashing bandwagon either. Many vendors end up in this position even though they're honestly trying to avoid it.
This is an environment that can quickly become complex.
Even when it comes to implementing ERP, financial, or accounting systems, customers retain the ultimate decision-making power over what happens in their businesses and what does not. However, the vendor is the one with all the experience in providing the solution and the service necessary to get it in and running.
In theory, consultants and vendors would always take the lead on these projects, taking the role of trusted advisor to the customer who would, with necessary oversight, allow them to get on with the job.
But there are challenges that deny this perfect theory from taking shape. Skills shortages, tight budgets, misunderstandings, ignorance, failure to communicate or establish clear channels of communication, lack of experience, fear, politicking, shirking responsibility, poor ethics, and more.
Some of those challenges can be more troubling than others. How must a customer deal with a vendor that demonstrates poor ethics? Checking references can quickly clear up many hollow claims.
How to deal with some of the other challenges can be less obvious.
Sometimes what derails projects is a skills mismatch that's hard to notice. The lead consultant is sometimes an excellent product consultant. But they are not supported by a solutions architect who understands the customer's business or their industry, or how the client operates in that industry.
That often leads to accusations and finger-pointing at the end of projects, including suggestions that consultants weren't privy to certain information. But consultants should be asking the right questions upfront, prompting the client to divulge the information that they, the vendor's experts, know they will need.
Sometimes the project manager becomes the scapegoat. I know many excellent project managers but, with the best will in the world, they will never single-handedly determine the success or failure of ERP projects. They just don't have the direct control over the resources that puts them in that position. Good ones can make a positive difference to bad projects but they are so rare they're unicorns. However, on the flipside, less than stellar project managers can hasten a good project's doom.
Some customers insist on appointing project managers from within their ranks. That almost inevitably leads to failure. Usually that person is neither qualified nor experienced. Even when they are, they can be more easily swayed to put unreasonable demands on the vendor's team, leading to scope-creep and other maladies. Since ERP touches every aspect of a business, they'll also bear the brunt of pressure from business unit managers and other leaders. Project managers should be objective and a third-party.
Poor pre-sales can also undermine ERP projects. It is absolutely crucial that all the role players are present during discovery meetings. Customers frequently undervalue the presence of their mid-tier managers and processing employees, usually presenting their C-level executives to give direction. But these high level executives seldom understand the daily operations even though they may think they do. Unfortunately, ERP projects routinely fail at the processing level so it is absolutely crucial that those employees are there from the beginning.
How businesses ultimately handle these challenges differs. But experienced vendors who accept responsibility and take some pains upfront to prepare for the journey take customers many good miles farther along the road to project success.