When I wrote my tongue in cheek How to be less stupid in 2009, I picked on Mike Krigsman when I said:
Get an RSS device implanted with Mike Krigsman’s IT Project Failures blog. Have you ever known anyone who could get a long running blog based on the simple premise that IT projects mostly suck? Yet they do. Mike has and is essentially repeating the same story with different factual twists.
Having just come off a webinar hosted by Eric Kimberling of Panorama Consulting Group, I'm even more convinced of the need to get that implant.
Kimberling used the recent Shane Co bankruptcy as a backdrop for explaining why, in his firm's experience, ERP projects continue to deliver less than stellar results. As I listened to the explanations given I could not help but think back to around 1995, the year I really started getting my teeth stuck into SAP. It seems that buyers have not learned the lessons of the past. Why? It was a question I put and to which Kimberling posited that many buyers just don't have enough experience when wrangling with buyers. Frank Scavo, in a tweet message to me said:
Unfortunately, many ERP buyers today weren't around to learn lessons of 1995.That's why they should listen to old guys like us.
In fairness though, I find many ERP buyers are much more sensitive to implementation risk today than 10-15 yrs ago.
I'm not so sure. Kimberling notes that benefits delivered and project over-runs remain the norm.
Panorama specializes in consulting to the SME sector which its defines as companies turning over less than $500 million. Its research in that segment says that:
- Average ERP duration is 19 months
- Implementation cost is $8.5 million
- Represents 9% cost of sales and
- Delivers 39% of potential benefits
By any set of measures, this is a massive failing on the part of the industry and its customers. Yet time and again we continue to hear the same tune. How many times has Gartner talked about the large percentage of project failures?
Mike Krigsman likes to refer to the Devil's Triangle of failure. Kimberling believes that when failure reaches catastrophic levels, the customer has a lot to answer for. He also says that in the current economic conditions, sales people will go out of their way to extol benefits if that's what it takes to get a signature on a contract. The flip side is that there are deals to be done.
It has been hard to get customers to accept their level of culpability. It's easy to see why. Vendors have way more firepower than buyers in the buy cycle. Once you're hooked into a deal it can be a heck of job to untangle, especially when you've spent months in the selection and evaluation process. But I suppose the biggest difficulty is one of pride. Who wants to 'fess up to screwing a major ERP implementation?
Are there bullet proof answers to be found? That would be a stretch for anyone to assert. I have said that on the vendor side, a lot more could be done in the area of quality. It's something I'm quietly plugging away at. In the MK article I reference above, Brian Sommer says:
Customers should hire smaller firms that are focused and take a very strong advocacy position. You’ve got to have a lot of discovery time at the beginning of a project to flesh out detailed work plans, so everyone knows what’s going to be accomplished and there are no surprises. You also need to develop a great contract.
He's right. Brian, Mike, Frank, Vinnie Mirchandani, Ray Wang and I have all at various times been busy enough attempting to solve these and similar problems in projects of all sizes. When I call up Vinnie these days he's breathless from either jumping on or off some plane.
When I think back to the massive oil and gas tents at SAPPHIREs past it's hard to resist the siren call of being in one industry club or another. Yet I also know that if you scratch the surface, CIOs will tell you the unvarnished truth. They will reveal their battle scars.
So here's some ideas:
- If your ERP is going pear shaped, it is better to seek help now rather than try continue swimming in mud.
- Use your industry peers. They will talk reality.
- If that means a brutal assessment then go for it. It only need happen once and you'll thank the bringer of bad news. Management will also appreciate your honesty.
- Make sure the people you're hiring have got the stones to stand up to the implementers AND the vendors. That could mean some tough talk but should mean a better outcome.
- Make sure the people you hire are truly independent and do not make their primary living from scratching the vendors' or implementers' backs. That could be tricky but there's a few names to play with here.
- As Kimberling says: never be afraid to say 'No' and stand your ground.
- Get your vendor and implementer to understand you're looking for a partnership - not a transaction. If all they see are dollar signs then it's fair to say you're on your own. That's not a good place to be on any project.
I'm sure there are more tips but that's where I would start.