Why big IT projects fail…and how to prevent it!

touch- tablet in hands Business man

touch- tablet in hands Business man

The implementation of an ERP system is a large and complex task. Such software controls virtually all day-to-day business activity and has a direct impact on the productivity and profitability of an entire organisation.

Unfortunately, such large implementation projects often strike problems. These can range from minor cost or time overruns to major failures that result in significant delays and financial losses.

Often, the problems arise because of misunderstandings between the software vendor and the customer. Each needs to be very clear about their role and responsibilities, and be sure the same holds true for the other side. Misunderstandings can occur either when the vendor fails to explain the processes and requirements of the deployment, or the customer fails to fully understand them.

Customers may assume certain things are going to happen, or certain resources are needed for the project when in fact reality is very different. Untested assumptions can have a dangerous impact on the project’s success.

There are a number of key factors to consider before embarking on an ERP implementation, or any large software deployment project. They include:

1. Start with the vendor
It can be tempting to focus on the capabilities of a particular software application and not pay sufficient attention to the vendor behind it. Undertaking thorough vendor due diligence before any decisions are made is vital.

Ask your prospective vendor about the processes they have in place and the methods and documentation they use during a deployment project. Ensure you are comfortable with their knowledge of your business and the benefits the software will deliver. Only once you are satisfied that the vendor is the right fit for your organisation should attention then shift to the detail of the software.

2. Undertake gap analysis
Once a vendor has been selected, the next step is to undertake gap analysis. This maps out the business process requirements of your organisation and determines exactly whether the chosen software will be a good fit. Gap analysis can take place in the form of a series of workshops during which both sides run through their expectations and assumptions for the project and its outcome.

Management of assumptions at this stage is vital for project success. Some vendors fear they will miss out on a sale if they point out the true requirements from the customer, both in terms of staff and commitment, however this is particularly important.

3. Perform preparation testing
Preparation testing is the next step. This involves talking to all key stakeholders about what to expect from the project, what will be changing, and what this means for them. Early buy-in from all affected employees can help greatly in a successful deployment.

During this step, the vendor should make recommendations on the number and types of customer staff that will need to be involved in each phase of the project.

4. Beware of scope creep
Most ERP deployments will require software to be tailored to match the specific requirements of an organisation. It’s important to understand how these customisations will be handled by the vendor and what time delays and expense might be incurred during the process.

The organisation must also be clear on the impact of any changes to the initial deployment agreement. Adding additional components or features, known as ‘scope creep’, can significantly slow a project and cause cost overruns.

It’s also worth understanding the implications of working with a global rather than Australian-based vendor. Customer of global vendors may find themselves competing with other larger customers for support rather than having local access to required resources.

5. Assign staff to the project
This is one of the most critical steps in the deployment project. You should identify key personnel who will take on the roles of users and super users. There should also be a project leader who needs to have a thorough understanding of business processes as well as the authority to make key decisions during the deployment process.

Care should be taken to ensure the selected staff actually have the time required to perform their new duties. Assigning new tasks to already busy people tied up with regular day-to-day operations can cause significant problems during the implementation process.

6. Undertake user acceptance planning
This is a critical part of the project and often under estimated in terms of the time that should be allowed. Sometimes, customers are unsure what to do in this phase and don’t ask the vendor for guidance. This is a mistake.

7. Keep asking questions
It’s important to continue to ask questions throughout the deployment as it removes assumptions and misunderstandings on both sides.

How is the project tracking? Are we meeting our list of requirements agreed at the start of the deployment? Are critical decisions being made in a timely manner?

By following these steps the risks associated with large-scale software deployments can be significantly reduced.