How to have a successful ERP project ?
When implementing new ERP software, companies often spend a lot of time identifying their requirements but relatively little assembling the team that will drive the implementation.
Yet, the ERP project team is without question the biggest success factor, one that can make the difference between on-target implementation and a project that goes sideways.
Deceptively simple, here is the formula for a successful implementation: the right people, with the right skills, following the right steps. Make sure you start your ERP planning in tandem with the team selection process. These eight steps will help you structure your project team, create your plan, and put the right measures in place.
The formula for a successful implementation: the right people, with the right skills, following the right steps.
1. Recognize that it’s not an IT project
Because ERP systems are based on information technology, people often assume that ERP implementations are IT projects. Not so. An ERP system is the backbone of your company’s entire operation so you need engagement and commitment from every department. Without sufficient organizational support, an IT-driven implementation is likely to result in expensive delays, user resistance, dissatisfaction, or even outright failure.
Your IT department will take care of hardware and software installation (if the new system is installed on-premise). IT will also be responsible for compatibility and integration with other data-dependent systems and equipment – both within and connected to the enterprise. However, the responsibility to define the new business processes that will drive system configuration falls squarely on the shoulders of the system users.
2. Secure executive commitment
While your CIO or CTO undoubtedly endorsed the implementation project, their involvement does not end there; signing off on the ERP investment is only the beginning. Executives must understand the impact of a large implementation project, be willing to make the necessary trade-offs to allow people to devote time and energy to the project, and provide visible evidence of their support.
Executives should voice their commitment from the earliest kick-off meetings. They should stay involved, following the team’s progress and offering encouragement when and where appropriate. They must also serve as the final authority when conflicts or issues arise that cannot be resolved without executive involvement.
In any project there will be times when other priorities interfere with project commitments. Customer demands, training sessions, or competing projects can easily pull team members away. Employees will be hard-pressed to resist those distractions without visible executive commitment and “permission” to stay focused.
3. Choose the right project team leader
An effective project team, led by a smart and dedicated project leader, is required to drive an ERP project to successful completion, on time and on budget. The team leader should come from the operations side of the business and be the person that most people turn to when they have a question or a problem, someone who knows the company’s business, internal politics, and how things work in your organization. The project leader could be a department head but in many cases will not be. If possible, identify this person as early as possible to allow for participation in the selection process.
The team leader must be – or become – proficient in the use of project management software for tracking tasks, schedule, and costs. Previous project management experience is helpful but not required; there are plenty of resources available to train the designated individual in project management techniques and tools.
4. Get the right people on your ERP implementation team
Your implementation team structure should reflect your organization. Project team members should represent all major functional departments, particularly those that are primary users and beneficiaries of the system. Departments may include engineering, sales and customer field service, procurement, finance and accounting, IT, physical plant and maintenance, human resources, or others depending on how your business is organized and the breadth of your system’s reach.
The team is responsible for planning and organizing the project and should meet regularly to review progress and address any issues that arise. Each team member will assume responsibility for coordinating activities within their functional area, often establishing and leading individual task teams to accomplish various tasks. Members will report back to the project team as these tasks are undertaken and completed.
In most cases, the project team will meet weekly – or more frequently during critical or high-activity periods. While C-level executives are not expected to attend team meetings, they should be kept aware of all implementation activities and decisions through regular reporting by the team leader. Company-wide status reporting is also highly recommended to help keep enthusiasm and interest high.
5. Follow a structured and inclusive implementation planning process
Planning must start early, when the project is first suggested or identified. The project plan will be continually updated as new information becomes available – but it should be “locked in” at the start of each phase. While additional changes may be necessary after that point, changes in mid-process should be avoided if at all possible. “Scope creep,” the tendency to keep adding to or changing the project’s objectives, is probably the greatest threat to successful project completion. Good ideas will likely emerge during the process but even seemingly small changes can slow down or derail your project. Set these ideas aside for phase two.
Get the (future) user community involved in the early planning process.
Get the (future) user community involved in the early planning process. Why is this so important? They are the main source of information for the “as-is” description of the business and its processes. You’ll need this in the requirements definition portion of your ERP request for proposals (RFP). You’ll want them involved in the selection process so they can tell you if the system really meets their needs in the context of their day-to-day processes. Most importantly, early and continuous involvement in the specification and selection process will help overcome any resistance to change that is often present among the user community when something new is thrust upon them.
6. Track your project plan
Use project management tools to schedule and track the project and its progress. There are many relatively inexpensive project management software packages to choose from. The software will help lay out the schedule, identify resource needs, and spot potential conflicts. Once the entire project plan is loaded, it will help you track each task and the overall progress against the plan, as well as identify the impact of any slippage – delays caused by the late completion of tasks that may affect other timelines. The tools will also track expenditures compared to budget and keep senior management informed of funding and resource needs.
As deviations from the project plan are identified, the project team must quickly address them. Small slips become major problems if not resolved while they are still small. Each task team leader should report up-to-the-minute status of active projects to the rest of the project team at the weekly meeting. The project team can then figure out how to bring any delayed or disrupted task back on schedule. The schedule is paramount – don’t let any planned activity slip as there will be other impacts downstream. (It’s okay to build a little cushion into critical tasks and phases of the plan. You might consider adopting some of the project management principles from Eli Goldratt’s Critical Chain, including ways to make these buffers more effective.)
7. Make sure that users “own” the system
This point bears repeating: the success of your implementation rests on the user community feeling a sense of ownership of the system. If users are a part of the process from the beginning, they will feel a greater sense of responsibility for its success – since it was their idea, at least in part, to choose this particular system and configure it as you did.
The success of your implementation rests on the user community feeling a sense of ownership of the system.
In any implementation, there will be moments when times get tough or unanticipated obstacles appear. If users do not feel that it is their system, it’s easy to blame someone else – executives, managers, IT, or the system itself – rather than digging in and fixing the problem. The key to gaining ownership commitment is early involvement in project planning and goal setting.
The “What’s in it for me?” factor is also important in earning that sense of ownership. Each user must see benefits from the new system – whether ease-of-use, convenience, more faith in the accuracy of information, the ability to accomplish more and have a bigger impact on the organization, or reduction of stress, overtime, and frustration. Some of these “soft” benefits are important in motivating users to adopt the system and make it a success. Education and training are key to helping users understand how the system will improve their work lives and job performance.
8. Measure your ERP project team’s success
The ultimate measurement of project team effectiveness is, of course, a successful implementation, completed on time and on budget. However, intermediate measures are just as important. The project plan is made up of a number of interdependent tasks laid out on a timeline, with resources assigned for each task. The team’s responsibility, after the plan has been approved, is to manage the completion of all tasks as planned.
Individual tasks, when completed, serve as milestones. Each week, individual task managers should report on task progress, including time and resource utilization as well as any challenges, conflicts, or issues to be addressed – so that the project team as a whole can decide on corrective actions or resource reallocation needed to keep tasks on target. The successful completion of all tasks along the way acts as a measurement for both the performance of task leaders as well as the larger project team.
Achieving ROI (return on investment) expectations is also a measure of team accomplishment, especially if those ROI expectations have been realistically time-phased to show progress or continuous improvement.
And finally, the project team’s communication, while a less direct measure, is another indicator of achievement. How well did the team communicate project status to the company at large and up the chain to department managers and company executives? Strong communication is an essential ingredient of a successful project.
ERP implementation requires enterprise-wide participation and support. The project team is at the heart of the implementation even though they don’t really “do” the implementation themselves. The team’s primary job is to plan and manage the project, to enlist support, and to keep the enterprise motivated and moving forward toward the achievement of all of the planned tasks and activities – until the project is successfully completed.
Source : SAP