When a new sys­tem imple­men­ta­tion fails, it can be dev­as­tat­ing to the bot­tom line. It takes a lot of time, cost, and effort to start and com­plete a project. Yet still, we hear about ERP imple­men­ta­tion fail­ures more often than we’d like.

Joshua Green­baum, prin­ci­pal at Enter­prise Appli­ca­tions Con­sult­ing, knows a thing or two about ERP imple­men­ta­tions. He has more than 30 years of expe­ri­ence in the indus­try and works as an ana­lyst and con­sul­tant spe­cial­iz­ing in enter­prise soft­ware projects.

ASUG News inter­viewed him to gain some insight on why these fail­ures hap­pen and what orga­ni­za­tions can do to avoid them. In the first of this two-part fea­ture, Green­baum shared exam­ples of projects he’s been involved with and his thoughts on com­mon mis­con­cep­tions. This top­ic is espe­cial­ly impor­tant, con­sid­er­ing that many com­pa­nies are cur­rent­ly eval­u­at­ing a move to SAP S/4HANA.

Sharon: What are the top three rea­sons an ERP imple­men­ta­tion fails? In your opin­ion, how can orga­ni­za­tions avoid these?

Josh: The first is that the com­plex­i­ty of change man­age­ment wasn’t well under­stood, well com­mu­ni­cat­ed, or dealt with. It’s sim­ple to say, but not sim­ple to do. That can be solved by involv­ing all the stake­hold­ers from the start. Mak­ing sure that they are inform­ing the imple­men­ta­tion with what real­ly hap­pens in the day-to-day, but also look­ing at the solu­tion and say­ing, ​“Yeah, actu­al­ly that’s right. That’s the way it should be.”

The sec­ond rea­son is because a com­pa­ny hasn’t picked the right part­ner. You can avoid this by sim­ply mak­ing sure the part­ner­ship is sol­id and flu­id enough.

The third rea­son an imple­men­ta­tion fails is because a com­pa­ny believes it is done at the go-live date. You’re not. The go-live date is the begin­ning. Sprint­ing toward go-live and pre­tend­ing that’s the fin­ish line is anoth­er big prob­lem that com­pa­nies run into. You need to think about things like ongo­ing train­ing or new-hire training.

Sharon: Can you share a few exam­ples of ERP imple­men­ta­tion projects that have gone wrong? What could those clients/​system inte­gra­tors have done dif­fer­ent­ly to avoid these failures?

Josh: There are tons, but I’ll share three with you.

Bro­ken Promises

I was involved in a project where the orga­ni­za­tion was essen­tial­ly sold a bill of goods. The busi­ness want­ed to break down its silos, and was told, ​“We have an inte­grat­ed soft­ware prod­uct that will ex post fac­to inte­grate your com­pa­ny.” There were two com­plic­it par­ties in the sit­u­a­tion. One was the account exec­u­tive who made a state­ment like that, and the oth­er was the exec­u­tive spon­sor who bought into it. 

It’s just not true. No one should ever accept what they see in mar­ket­ing lit­er­a­ture or hear from an account exec­u­tive as gospel. A promise that inte­grat­ed soft­ware cre­ates inte­grat­ed busi­ness­es is some­thing every­body should be skep­ti­cal of.

I believe a sales­per­son or account exec­u­tive should not be ful­ly com­pen­sat­ed for a sale until the client reach­es some mile­stone that defines suc­cess. To be able to walk away from a sale and have no sense of respon­si­bil­i­ty for whether it was suc­cess­ful or not is a big problem.

Who’s Got Your Back?

Anoth­er good exam­ple is a project that had already fall­en off the rails and gone through tons of dif­fer­ent iter­a­tions of try­ing to restart. It was put on hia­tus for a while and even­tu­al­ly brought back to life. 

The cus­tomer brought on some­one with zero expe­ri­ence in IT projects as their project man­ag­er. That lack of expe­ri­ence real­ly added a fatal ele­ment. If you don’t have the right peo­ple, then it’s time to bring on a con­sul­tant who can play that role. You need some­one who can make sure you’ve got the right stake­hold­ers and the right knowl­edge. With­out that, you are at the mer­cy of what­ev­er the part­ner and the ven­dor can bring to the table. You must keep your eye on the ball con­tin­u­al­ly to avoid get­ting stuck.

The Scope Creep

There are thou­sands of these sce­nar­ios behind the third, which is the com­mon exam­ple of, ​“We didn’t real­ly under­stand what we were doing.” You need to have the right stake­hold­ers in the room. You need to make those hard busi­ness deci­sions before you look to imple­ment the software. 

The chief dan­ger for any of these types of projects is when a busi­ness exec­u­tive says, ​“I actu­al­ly want the soft­ware to work just the way the old soft­ware worked.” If you do that, you’re doomed.

If you do the hard work upfront, those types of state­ments come up ear­ly enough for some­one to shoot them down. Oth­er­wise, you’ll end up with things that keep get­ting added on until you get this giant hair­ball that can’t be imple­ment­ed, can’t be updat­ed, and can’t be used. The abil­i­ty to real­ly nail down what you’re look­ing for before you start look­ing for it is essential.

Sharon: What do you think are the biggest mis­con­cep­tions about an ERP implementation?

Josh: That ERP projects are not about peo­ple, or that some­how an ERP imple­men­ta­tion is like build­ing a build­ing. I know of a com­pa­ny that hired the per­son who built its fac­to­ry and put him in charge of its ERP project because the exec­u­tives thought it was the same kind of thing. An ERP imple­men­ta­tion is not the same as build­ing a build­ing. We’re build­ing some­thing that involves peo­ple. Tech­nol­o­gy is mere­ly the mediator.

I think anoth­er mis­con­cep­tion is that for a com­pa­ny to be suc­cess­ful, it must imple­ment the lat­est and great­est, shini­est object out there. Busi­ness own­ers think they must suc­cumb to the mar­ket hype about blockchain and machine learn­ing, and mul­ti­tenant cloud, whether that’s rel­e­vant to their busi­ness or not. Some­times you don’t. Some­times, in fact, the thing you need to do is update your busi­ness process­es with­out the lat­est tech­nol­o­gy. You can often do that by rethink­ing how you’re doing busi­ness and work­ing to make things more efficient.

If you work dili­gent­ly to clean up the qual­i­ty of your data in your sup­ply chain, it can have a huge impact. That’s basic block­ing and tack­ling. You don’t nec­es­sar­i­ly need new soft­ware sys­tems. You may need some tools to do it, but there’s a lot you can do to improve your busi­ness with­out rad­i­cal tech­no­log­i­cal change.

One more mis­con­cep­tion is that an ERP imple­men­ta­tion is going to be easy. It’s not. Be ready for tur­moil. Be pre­pared for the prob­lems. Don’t pre­tend they won’t be there. Acknowl­edge them and have the sys­tems in place to deal with them.

Sharon: What are three com­mon fac­tors that lead to a suc­cess­ful ERP implementation?

Josh: Trans­paren­cy and account­abil­i­ty togeth­er. That’s one. The sec­ond is hav­ing peo­ple-cen­tric process­es in place. The third is choos­ing part­ners care­ful­ly. That’s for the soft­ware ven­dor and the implementer.

Read part two of our inter­view with Josh Green­baum, where we cov­er what steps you should take before an imple­men­ta­tion and how to choose the right sys­tem inte­gra­tor and imple­men­ta­tion part­ners. We even have some tips for set­ting checks and bal­ances before you start a project.

Are you ask­ing some of these ques­tions as you plan for your SAP S/4HANA imple­men­ta­tion? Attend one of our road shows in a city near you.