project management issues in erp is 6006
TRANSCRIPT
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Project Management Issues
in Implementing ERP
Frdric ADAM, David SAMMON& Fergal
CARTON
Business Information Systems
University College Cork, Cork, Ireland
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Introduction
ERP Projects are large and Important projects
Critical in terms of their potential and actual impact
The track record is far from excellent
Benefit realisation is questionable Preparedness is critical but badly understood
This leads to problems during the implementation phasethat are not solved properly => dysfunctional ERP
Very low levels of end-user satisfaction are reported
Essentially different from traditional IS projects => needfor a different approach in terms of project management
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Concerns with ERP
Implementations Summarised
Problem
Finding
Business
Case
Alternative
to ERP
Prerequisites
Business
Map
Package
evaluation
Complexity
of packages
SalesOfferings
Marketing
hype
Best Fit
Analysis
Competition
Clear
decision
making
ZEROchoice
Resistance
to change
Measurements
of success
Benefits
realisation
On-going
DevelopmentOf ERP (ERPII)
Intelligence Design Choice Review
Vendor-independent,
methodology-independent
analysis
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As a result
Poor preparation for project
Lack of managerial awareness of risks / opportunities
Lack of understanding of how to select software
Lack of vision of the business impact
Poor rationale for ERP
Poor understanding of how to scope project
Poor perception of system a prioriin user community
Project management nightmare No guide book to find out where to start
Project leader may not be an experienced projectmanager (ownership)
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Case Study organisationsKey Features Firm A Firm B
Type of firm Multinational Public sector
Industry Pharmaceutical Education
Size (emp.) 100,000 2000
Turnover $21 billion (2002) Euro 200 million (approx.)
Scope of project Comprehensive Financials / Procurement / projects
Type of implement. Worldwide roll out in 4 waves Single site in 2 phases
Duration 5 years 9 months (expected)
Project leadership Steering committee Steering committee
Project managers Local top managers in sites Finance officer
Project teams Approx. 70 at each site + 45 in core team 15 full and part time
Key issues in ERP implementation
Rationale for project Seeking FDA compliance Old system crumbling
Key problems y Managing differences between sites
y Setting up the template and sticking to
ity Managing difference versions of SAP
y Saving local gains whilst implementing
single instance
y Deadlines imposed worldwide
y Communicating with staff / negotiating
changes to work practices
y Lack of awareness of magnitude of change
needed
y Managing expectationsy Trade off between doing the right thing and
doing it right
y Tight budgetary constraints and lack of top
management support
y Difficulties in getting every one to agree on
specification
y Managing different cultures internally
Deserve special mention No attempts to justify investment beyond
compliance
Comprehensive ITT process to select package
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Project Integration Management
General preparedness
Awareness of what projects entails volume of effort required, effect on staffassigned to ERP team, budget, training
Firm A: excellent on average but very
uneven between sites Firm B: no understanding of project / far
too much expected of inexperienced team
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Project Scope Management
Critical for ERP:
number of modules, number of areas, extent ofcustomisation, number of interfaces with legacs stem, size of user population
Surve s indicate most firms would change scope ininsight (*)
Change in scope mid wa through projectresponsible for most cost /time slippages
Firm A: well defined (template) but imposed by
H without consideration of local practices (timewasted)
Firm B: little thought given to scope / entiremodules added without considering impact
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Project ime Management
ERP projects are amongst the longest
Multi-wave global roll out up to years
Initial sites software versions behind last ones
In fact ERP neednt take so long
Firm A: all deadlines externally decided + no
choice
Some sites failed to keep pace
Firm B: core functionality on time, but difficult
areas (e.g.: research contracts) left behind
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Project Cost Management
ERP projects are costly or highly costly
Much of the costs are hidden to a certain
extent e.g.: training
Firm A: externally decided, but large
enough for all sites (pharmaceutical firm) Firm B: mean budget throughout
Both firms used super-users for training
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Project ualit Management
ERP projects require a serioustransformation process that must bevalidated e.g. invoicing, payroll
Many aspects require hard-to-getexpertise
Application / organisational knowledge
dilemma (eg: use of consultants) Firm A: COMPLIANCE
Firm B: new chart of accounts
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Project R Management
Project team (full time) + business as usual
dilemma who can you afford to use?
Support for project at local level
Firm A: very organised opportunities for
promotion after project no casualties
Firm B: the right people are not there + topmanagement think they can be on team and
pursue their normal duties
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Project Communication
Management Other side of coin: selling the project internally andexternally
Can change be negotiated?
How much will it cost?
Not always a case of stupid resistance to best practice
Firm A: full time consultant hired + monthly newsletter +many meetings behind closed doors
Firm B: fragmentation of certain functions makes
consultation process very tricky too many to please(on-going)
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Project Ris Management
ERP projects can jeopardise earlier work
They also disturb everyday work over longperiods
They can lead to unworkable situations(Hershey, workarounds)
Firm A: much to lose (can-do attitude)
Firm B: odds stacked against success =>actively preparing for failure by refusingproper budget allocation
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Project Procurement
Management Which one is the one? How are vendors really selected?
Firm A: SAP logical choice (FDA)
Firm B: thorough process of ITT +comparative analysis
But other cases were not so neat (politicalor unethical decisions non-decisionmaking)
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Additional Areas Specific to ERP
projects
Project Rationale (global versus local)
Project Review
Global Project Management
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Conclusions
Many common stories in the cases
ERP Projects are special
Many common stories in the ERPimplementation cases
ERP Project Management is tricky and
different Certain areas deserve additional scrutiny