Top Six Factors for ERP Success

By Ocie Anderson, PMP, Director of Consulting Services at Navigator Management Partners

As a consultant I’ve been very fortunate. I’ve had the privilege to work with terrific people and awesome companies and have had very successful ERP implementations. While I would never say that I was the sole reason for it, I do know that when I was involved, from start to finish, my projects have been pretty successful, and I have lots of happy clients that went on to their own personal and professional success.
 
When most people think about factors for ERP success, they focus on the technical aspects of a project that highlight failure when mismanaged such as: too much scope, not enough time, to few resources, poor quality, high risks, extensive customizations, poor testing and training, etc. While these things require our attention, we need to go deeper to get to the root causes of ERP project problems. For example: minimizing and eliminating customizations are often cited as a success factor for ERP projects. Customizations should be viewed through the lens of business value. If there is significant business value (efficiency or competitive edge) and the team has collaborated and determined that the best option to attain that value is a customization, then it should not be a problem. It should be included in the scope and have adequate resources allocated to design, build, and test properly. Prolific or extensive customizations occur when there is no clear direction for the team on how to define business value, or the business and solution requirements to attain them.
 
Based on my experience, the following are the Top Six Factors for ERP Success:
 
1. ENGAGED executive sponsorship
  • An engaged sponsor does more than approve the budget. An engaged sponsor is accountable for the success of the project and the success of the team, and is present throughout the project.
2. EXPERIENCED implementation team
  • The quality and experience of individual team members from all implementation partners (customers, consultants, and vendors), at all levels (executives, leads, and team members), will determine the level of success for any ERP project.
3. REALISTIC scope and expectations
  • Scope and expectations form the definition of a project. The scope of work must align to achieve the expectations of the stakeholders. Also, the same project results can be viewed as either a success or a failure by those with different expectations of the project. Resources must also be aligned to achieve the stated scope.
4. COLLABORATION among implementation partners
  • It is imperative that implementation partners operate as one team, with a focus on the success of the project. Each partner also has a specific role to play, and it is important that they play those roles in the definition and execution of an ERP project.
5. DETAILED DEFINITION of business value
  • Business value is what any project hopes to achieve. The team needs to understand why an ERP project has been approved, and value that the organization expects to achieve. This value translates into vision and direction of the project, and ultimately, to the business and solution requirements.
6. LEADERSHIP through organizational change
  • Organizational change management is important for any transformational change. It is important to understand that change management requires more than training and communication. There are many components but most central of all is leadership. The project team and the organization needs to know the leaders are in control, and that they are going to be provided with the tools to make the transition a success. 
Why are these the success factors? ERP projects are long, complex, technologically challenging, and mentally stressful. It is natural to look at technical challenges as the reasons for failure. But these challenges are symptoms of deeper issues that deal mostly with the behavior of people rather than technical failings. Everyone involved has a personal and professional stake in the success. Each stakeholder does their best to make their companies successful. Individual careers and reputations at all levels are on the line. It’s important that everyone recognizes the mutual goals, personal and professional, and understand that each has the other’s best interest in mind.
 
Everyone involved with the implementation has a specific role to play. Implementations are collaborative events. If you do not have one integrated team, your project will face difficulty. ERP teams work best when they operate together, like checks and balances against each other. A fractured team has many goals, where team members protect their own interests and try to avoid blame. An integrated team has one primary goal, the success of the project. Commitment to the success of the project, means that each team member is also committed to each other’s success.
 
There will always be technical reasons why an ERP implementation might fail or succeed, but I believe these six success factors are the most important. In order to harness these factors I’ve developed a Framework for ERP Success. This framework is composed of guiding principles for how projects should be run and what each implementation partner or stakeholder brings to the table to make an ERP project successful.


 
Watch for future publications that go a little deeper into each of the Top Six Factors for ERP Success and how all ERP implementations partners (customers, consultants, and software vendors) should work together to achieve ERP success.