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ERP Project Ownership: Do Organizations Plan to Fail?

Steve Phillips | Jan 6 | Comments (4) 7

Street Smart ERP

by Steve Phillips IT Director and former ERP Consultant

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Within the ERP industry it is common to hear software-consulting firms say: The system failed because our client did not take ownership of their project. While this is often true, I find this statement a little perplexingdo senior managers in most companies spend millions of dollars on ERP with the goal of failing? Consultants sure make it sound like they do. Second, where were these same consultants when the disaster was unfolding? Suddenly in retrospect, they seem to have all the right answers. Maybe they should have told their client the truth in the beginning. After all, most firms sell their services to organizations under the premise we will take care of you, so sit back, relax and enjoy the show. However, once a project goes down the tube, now they are telling us something entirely different, which is... they never could deliver on their promises since it was really their client's game to win or lose. There must be more to the story. Of course, consultants cannot make companies take ownership or force them to do much of anything. Moreover, many are their own worst enemy. At the same time, I do not
see too many software consulting firms rushing in to educate, teach them how to take ownership, or better yet, help them do as much as possible on their own. I wonder why?

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Links Andy Klee - JDETips Andy Klee - ERPTips (SAP) Bill Wood - R3Now - Independent SAP Thought Leader ERP Software Blog Brett Beaubouef - ERP The Right Way

Well, the first reason is obviousit is called grab the money and run. What incentives do software consulting firms have to help their clients assume more responsibility? This only robs money out of their own pocket (fewer billable hours). To set the record straight, not all software consulting firms are crooks. Many mention the concept of project ownership from the start. Nevertheless, the phrase has become nothing more than a punch line since most firms have no real strategy, focus or
methodologies to put ownership in the right place (even when they know it is the right thing to do).

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My hope is one-day sr. managers within ERP software companies and consulting firms will see the long-term strategic value of customers that are truly more capable, selfreliant, and are actually holding up their end of the bargain. This may require vendors to look beyond the billable hours of the moment, not just talk about ownership... but start fostering it. I think most will listen if consultants can present a
plan addressing how they will help make it happen.

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In the meantime, I am not holding my breath. This is why organizations must get
educated. They must understand what ownership looks like and the strategies and techniques to assume more control of their projects. When implementing an

expensive project like ERP, the stakes could not get much higher. In case you are wondering, my book... Control Your ERP Destiny is currently in the final stages of editing and design. It is planned for a March 2012 launch. The book is the first of its kind to address specifically how organizations can take more project ownership to drive their success. How to reduce ERP implementation costs, mitigate risks, develop better business solutions, and leverage your software long after go-live. In addition, the book is full of other useful project management tips based on my twentyseven years of experience installing ERP systems as a practitioner in industry or as a project management and application consultant. I wish all of you a great New Year.

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4 Comments
BatchMasterIndia | Jan 10

Truly said. In order to make ERP Implementation a success, a perfect coordination between consultant and management is required. The management should take the responsibility of making the consultant understand the functioning of the organization and the consultant should be sound enough to understand why the company actually needs an ERP system.

RC525LJL | Jan 11

Great commentary! I feel nobody (client or consultant) wants to fail in an ERP implementation. The client has the responsibility to ensure the consultant understands their business. The consultant has to be able to present a solution that works for the client. That is where the problem arises as stated in the article. Both the client and the consultant want quick results and do not spend the proper amount of time planning which should include preparing the client for ownership. This leads to a solution that really doesn't fit the client or that has complexity far beyond what is needed. This also leads to trying to make the ERP system fit the client's existing business processes rather than the client transforming their business to take advantage of the power and efficiencies of the ERP system. One final note, the client cannot take ownership of the ERP system without their core team being properly trained to handle a complex system.

Mukund Pande | Jan 18

Great observations... I think it is a handshake between client and vendor... anyone of them takes it back...ruins the ERP implementation or anything that needs to be implemented. Most of the times ego clashes also..if controlled at right time... can deliver what both want at the end. ....waiting for your book to launch....congrats...

USER_2622365 | Jan 18

I agree to this article. We faced similar challenges when we implemented PeopleSoft at our company. Software consultants generally paint a rosy sales pitch and once you have decided to go with the product (or even purchased it), you realize: a. That the 'nice' features you saw in the sales pitch need you to purchase a thirdparty tool .. additional investment b. That the consultants who are on board with you are also 'learning' with you c. That some of the consultants on board will give a 'yes, this will work' or 'no this will not work' answer only. They expect you to take full ownership of the implementation (fine!) but do not want to spend time educating you or helping you understand all the features that the ERP offers. Why? Because tomorrow if you want some functionality, they have the option of 'hey we worked very hard and got this done' even if it is a delivered, out-of-box functionality given by the ERP. d. The ERP consultancy market has some players that prosper because the clients are ignorant of features or do not have the technical expertise or time to spend developing the skill in-house. And most software consultants are ok with this status-quo since that is what brings in the bucks. What will solve this tug-of-war is an Outcome-based pricing model that some companies practice.

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Archive Category: erp Keyword Tags: ERP project ERP project management ERP consultants ERP failure ERP education
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