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Autopsying Troubled ERP Deployments: Not Planned Failure, But a Failure to Plan

3/20/2010

In recent months, various news outlets have reported on companies’ failed ERP deployments, including Waste Management’s $100 million lawsuit over a failed implementation, and Select Comfort’s decision to halt its $20 million, multi-module ERP project

The reality is these deployments were most likely a failure from the very beginning. That’s because ERP projects fail at the start, they don’t fail at the end. If there isn’t a clear vision for the outcome of the project and how to get there from the start – they will ultimately (and cataclysmically) fail.

New ERP deployments are often undertaken to replace existing ERP systems that are so antiquated they no longer support business requirements or have become too costly or unwieldy to maintain. The process then becomes all about ditching the old system and getting a new system online – with goals no loftier than being on time and on budget. Taken at face value, there is absolutely nothing wrong with these goals, however, when you dig deeper, you see these goals fail to map to outcomes such as productivity gains, process automation and quality improvements.

At Epicor, we firmly believe a rigorous business case for ERP projects is vital to provide a strong foundation for a successful implementation. This is a key principle behind our Signature Implementation Methodology. Establishing a firm business case for ERP projects -- complete with return on investment and total cost of ownership calculations -- ensures the right data is collected (and the whole picture formulated) regarding both the cost and the outcome, so the ERP solution is architected and deployed to meet business needs from the get-go. Our TCO Calculator illustrates specifically how using Epicor’s solution to streamline processes and reduce off-contract spending translates into real bottom-line impact.

Education and training is another key element to successful ERP deployments and should not be overlooked. If employees are undertrained, they will often fail to take full advantage of the tools they’ve been given, and can become frustrated, abandoning the system and resorting to manual work-arounds that drain time and resources and create islands of information. It’s important that a training program is established that is appropriate to each user’s role within the company, with specific goals and outcomes defined. Unfortunately, this is an area where some companies tend to be short-sighted; they often see training as a line item that can winnowed down to save money. This in turn, ends up cannibalizing the returns on their ERP investment. Long story short, when it comes to ERP deployments, it’s important to understand when to sharpen the pen and when to put it down.

Posted by Craig Stephens, Vice President, Professional Services, Epicor

 

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