Critical mistakes in projects implementation of business systems

When you start a project, you do not know for sure the obstacles you will face. You don't know whether the project will be difficult or easy, whether it is successful or not, whether people will accept the system or not, whether it will be used actively or remain just another work struggle in the office. Even the most well-funded projects and the highest class systems may be not good enough or even actively lower productivity and bring huge maintenance costs. Even the most well designed solutions and best-prepared projects can sometimes be too difficult to implement or even unsuccessful.

Why is this so? It is true because serious business IT projects carry a high degree of complexity. An ERP system, for example should be able to work within all major departments of the company - supply, sales, finance and accounting, warehouse, production, projects, analysis and reporting. The problems in that only one of these departments can make the system unusable, delay of only one element of the project may delay the start of the whole system or even put at risk the success of the project. In view of the complete change that such systems usually bring, you can say that there is no lack of situations where such errors can happen - on the contrary. That is why I decided to talk about some of the errors that may happen in the implementation of business systems, I hope this will help companies implementing business systems. It is impossible to tell in one article all possible errors, but I still hope this writing will be helpful. The stories described below are largely based on actual implementations, the names of the companies of course are not discussed.

Error 1 - What is the purpose of the system

Company X, which has majority of its shares owned by a foreign company, decided that they need an ERP system implementation, which will be used to integrate financial and accounting data. The chosen system is similar to that of the parent company and is an ERP product of highest class. The purpose of the implementation is one - reported financial results to be transferred quickly to the head office, which should also have all accounting data available.

Unfortunately the objectives of the project do not include the adaptation of the system to local realities, nor does the project include any other department besides financial and accounting, the project does not include adaptation to local accounting procedures, which were applied in the company before the implementation. The project has only one target - bringing the necessary data and reports to head office.

The project is successful within the defined goals. From a user perspective - they now have a system much more difficult and not very well adapted to their own chart of accounts and accounting policies; integration with any other systems - including production and warehouses is missing, and in practice the work of people has become more difficult. The cost of implementation is substantial - both for hardware and licenses, and ongoing maintenance of the system. Practically the only people to whom the implementation makes sense to have are the employees of the parent company.

From my perspective the project was formulated incorrectly still from the beginning. Yes, of course the parent company should receive the necessary information, but this should not be at the expense that dozens of people will have much difficulty in work and the company will take huge costs to gather this information. Today's ERP systems, even those in the mid level, give plenty of opportunities for the preparation of accounting information at the depth needed for owners, while able to adapt to the real needs of users and to cover a large part or all of their operations. When this happens we achieve the best results from such a system. I believe is it necessary to set optimal and meaningful goals in front of the project, errors here can affect the end result negatively.

Error 2 - We are waiting for things to happen

Many people believe that when a software is expensive, it must be able to do everything. Also, many people believe that when you pay for a service it means you get a running system without much of your participation. Both are false - no software, no matter how expensive it is, who can do everything that you want. And if you do not actively participate in the project, the likelihood is that it will not be successful.

Company Y begins implementation of an ERP solution. The beginning is approved and is quite expensive - licenses are paid in advances - and the total number purchased is equal to the expected users, although the system supports concurrent users and the actual load will be much less. A well-paid Project Manager is appointed to move the implementation forward.

The Project Manager, however, has almost no experience with this class of solutions, and the employees have very diverse views on the question of who wants what and when. This goes also for the decision of who should attend which meeting and when.

As a result, the project was delayed enormously by trivial problems and several months planned duration increased to several years. Worse of all, the results of the project are missing - the system is not running, there is a plan to go live with some of the departments, but without a clear vision of how it will work for the whole company, the outlook is not good. The Project Manager, although well paid, began looking for a job, because on one hand it is clear that things are not moving well, on the other - even he got tired wasting his time and waiting for something to happen.

Where is the error in this case - they are actually a lot of errors, but the main ones are that the leadership of the company underestimated the complexity of such a project, over trusted the provider about what costs should be made at the start, and the person chosen to manage the project is not the right one. As a result, the cost overruns are several times the original cost expected, but even with them it is not clear how the project will finish successfully.

Error 3 - The right partner

Company Z has decided to implement a complete solution for mobile sales and service store. The solution seems perfectly nice on the presentation, but after the start of the project, things turned not to be so easy.

First, integration with the ERP system in progress in the company had proved more complex than anticipated. The solution it turned does not have the details needed for the ERP system. And the very business functionality that were presented on the presentations seem not to be fully developed and tested. As a result the provider of the solution had to write and debug no small amount of code before the system becomes usable and fits with the launch schedule.

In reality, however, it turned out that the supplier had no capacity to prepare all the necessary changes at the right time. As a result, the duration of the project increases in times compared to the preliminary planned period, whilst it became clear later on that the already planned solution will not not have the ability to submit correct information to an ERP system launched. Company employees were forced to re-enter all the information in the ERP, which essentially duplicated the work of their colleagues across the country. With a huge delay in the end the system was started, but the price was extremely busy employees, delay beyond all planned deadlines, delay in the reporting of the company with months, poor planning of supply due to lack of necessary operational information - and generally ineffectively used resources.

These are just a few examples of serious errors in the implementation of business systems. The purpose of these examples is to give you a real idea of how diverse and unexpected problems you experience at work may be, and I hope this will help you avoid similar mistakes in your business IT projects. Clearly, we can not cover all possible errors even in a book, but I would be happy if after reading this you can at least avoid these problems, I should also mentioned it would be good if you plan carefully who will lead your business software projects.

Stefan Markov, Manager at Rinamar Ltd.
Source: CIO

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