Yesterday, I blogged about my speech to the IP Summit in Chicago on June 5, 2018 that showed vendors ways of Avoiding an ERP Implementation Train Wreck, I began by explaining the three key reasons why a disturbing number of ERP software implementations end up in disputes and litigation.

Today, I will review four lessons that users can draw from the failures that I cited as examples for the audience of CIO’s, corporate technology directors and managers, and ERP specialists from a variety of businesses as well as representatives from technology developers, sellers and implementers.

The first lesson is that users need to define clear goals for their ERP software system. Prime among these is creating a clear understanding of the business reasons for having ERP in the first place. Too often, companies focus on the technical purpose, which isn’t enough. It’s only after a thorough business analysis that an informed decision can be made – users should not be afraid to conclude the answer is “No, we don’t need ERP.

Second on the “must do” lesson list is for users to clearly define their business requirements in great detail, and a good ERP software selection consultant will be able to help with this process. Defining the needs and objectives must be done prior to evaluating offerings from various vendors and choosing which vendor will get the sale. One effective way of doing this is to focus on the company’s current business processes which allows a user to see what areas need to be improved. Part of this second lesson means identifying those components such as software features and functionality which might be a deal breaker if the component, feature or functionality is not part of the ERP software. And involve people besides top executives in the discussions. As we blogged in mid-May 2018, all key stakeholders need to participatein defining the requirements.

Thirdly, using the information gathered while defining the business requirements, the prospective user has to have realistic expectations for their implementation. Don’t rely on the ERP vendor’s sales team to do this; their job is to sell, not temper expectations. At the same time, a customer has to address the non-technical resources that will be critical to the success of the ERP implementation project. This includes everything from user acceptance to simulating the new business processes as well as testing the ERP software system before it goes live for the first time.

The final lesson is often overlooked but should be top-of-mind: Manage the scope and cost of the project diligently. Ensure that the internal team is adequately trained in ERP software implementation, and that the vendor’s staff has strong ERP implementation experience. When customization is recommended by the ERP vendor, prioritizing their suggestions at the outset can help with this as can an experienced ERP software integrator. But it’s likely the vendor will have competing priorities; after all, the longer a project takes and the more customization that is required, the moremoney the vendor earns.

In the third and final blog, I will lay out the role negotiating and drafting the ERP software license and ERP software implementation contract plays in helping both the user and the vendor achieve a successfully ERP software implementation project.

By Marcus Harris