As is happening with almost everything in business, COVID-19 is having an impact on ERP software systems and digital transformation projects generally – particularly with respect to an interruption or delay in software implementation projects. Some companies are postponing their implementation or drastically reducing the scope of their implementations.)
While halting or postponing an implementation project in the face of the challenges brought on by COVID-19, may make sense, there is a risk of losing the institutional knowledge accumulated by the integration team working on the project.
Those consultants that understood your business requirements may not be available later. There will also be additional costs associated with getting new consultants on board that have an understanding of where the implementation project has been, where it is going and how the project addresses unique business requirements.
We went through the options facing users when we spoke at the virtual 2020 Digital Stratosphere conference in late April. We also explored how current contracts can be renegotiated and what should be included in new contracts.
Creating Workarounds In a COVID-19 World
For implementation projects that are in progress, a better option than stopping them altogether, may be to narrow the scope to only those modules or pieces of functionality that are essential. If you are going to move forward with your implementation, whether with a reduced scope or not, you need to ensure that you have reasonable workarounds in place to account for the project disruption associated with stay-at-home orders, social distancing and consultants working remotely.
Diligently managing the scope and the cost of the implementation is more important than ever. It is imperative that you focus on project governance. You need to ensure that you receive project status updates on a regular basis. Moreover, you need to ensure that the project status updates you receive provide meaningful information that allows you to make informed decisions about the project.
Similarly you need to focus on change orders to counteract the likelihood of scope creep and budget expansion. You may also be able to use change orders to “back-door” amendment to provisions of the implementation contract to account for the massive change brought on by COVID-19.
Protecting Remote Integration
Data security and maintaining confidentiality of information in an ERP software system always has been critical but even more so with consultants working remotely.
Long before the coronavirus created its worldwide problems, the ERP software system contracts we negotiated for clients always included clauses that detailed specific responsibilities for the vendor, the integrator and the user. But now with many people using their own computers at home, the chances of a breach whether by accident or due to a hack have multiplied ten-fold.
having a structure in place for coordinating a how project is going to work with consultants working remotely is essential. Users need to incorporate proper nondisclosure provisions into their contracts that take into account the increases data security risk. The risk that important data could be compromised is real. It is critical to account for who is going to in charge of coordinating what information is where and which consultants have passion of that information as well as the security protocols in place to protect that information.
Users have more leverage right now over vendors and integrators than they realize. This is important with both new contracts and being able to renegotiate existing agreements whether those contracts our on-premise contracts our cloud contracts. Renegotiating onerous provisions or provisions that no longer make sense in the current environment is critical to success.
Take a practical approach and begin with the premise that vendors are your partners. But don’t talk with the sales team that sold the project. Have the conversation with a senior decision-makers who are empowered to say yes and can fully appreciate the value of maintaining the customer relationship for the long-term.
Also, it may be possible to arrange for discounts and fee adjustments for either cloud services or the ERP software system itself.
Create a Long-Term, Flexible IT Strategy
It is a good time to take a step back and evaluate your critical IT initiatives and prioritize those that are strategically important to your business.
Digital transformations always are complicated undertakings with a lot of moving parts. If you have questions or concerns about yours during the pandemic and lockdown, feel free to call me. We’ll be happy to talk and share our experience, and can refer you to highly-reputable consultants who can walk alongside you.