Rescuing a troubled ERP project requires a systematic approach, clear communication, and a committed team.

 

 

A December 2020 Forbes article quoted a PwC study where only 2.5% of companies completing their projects completed successfully on time. From the overall pool, Enterprise Resource Planning (ERP) failures can be significant events for organizations, leading to financial losses and operational challenges. Colossal ERP failures have become an undeniable challenge across various industries, leaving clients grappling with adverse ramifications. These failures often stem from insufficient planning, suboptimal project management, and unrealistically high expectations. The intricate nature of ERP systems, involving the integration of multiple business processes and stakeholders, accentuates the need for expert guidance during implementation.

An exemplar of colossal ERP failure can be found in the case of Waste Management, Inc., where a substantial investment of over $100 million in an SAP ERP system yielded catastrophic outcomes. Regrettably, the lack of strategic counsel resulted in the system's dysfunctionality, leading to financial setbacks, protracted legal disputes, and reputational damage. One of the most infamous ERP failures occurred in 1999 when Hershey's, a well-known confectionery company, suffered a massive disruption in its supply chain due to a flawed ERP implementation. The failure led to a $100 million drop in sales and a stock price decline. Another notable example is the implementation at the US Navy, where the ERP system cost ballooned from an initial $1 billion budget to over $1.5 billion, while failing to deliver the expected benefits.

 

How do we rescue troubled ERP projects?

ERP projects are notoriously complex, although they play a pivotal role in streamlining business processes and enhancing overall efficiency. Often times, despite careful planning, they can face challenges that lead to stagnation or failure. Rescuing a troubled ERP project requires a systematic approach, clear communication, and a committed team. In this article, we will explore the essential steps to take towards rescuing an ERP project and putting it back on track. At Jacman’s, we emphasize the significance of meticulous planning, adept project management, and an honest assessment of our clients' capabilities to secure successful ERP implementations that drive transformative business value.

 

First step is admitting the distress.

Admitting that a project is distressed and needs help is the critical first step towards rescuing it. It takes courage and humility for stakeholders and project leaders to acknowledge that the current trajectory is not working and that a course correction is necessary. This recognition opens the door to a more constructive and proactive approach to finding solutions and salvaging the project.

 

By accepting the project's troubled state, the team can then shift focus from assigning blame to analyzing the root causes of the issues. This introspective approach allows them to identify where things went wrong and what adjustments are required to move in the right direction. Admitting the need for help fosters an environment of collaboration, where stakeholders, team members, and external consultants can pool their expertise and experience to develop a robust rescue plan.

 

Moreover, this candid admission demonstrates leadership's commitment to project success and the organization's willingness to invest in rectifying the situation. This level of transparency can restore confidence among team members and other stakeholders, encouraging them to engage actively in the rescue effort.

Cooperate and Collaborate

 

During troubled times, stopping the blame game and finger-pointing is a crucial step in rescuing distressed projects. In troubled situations, it is common for team members and stakeholders to engage in a cycle of blaming others for the project's failures, which only exacerbates the challenges and hinders progress. Instead, the focus should shift towards identifying solutions and collaborating on a rescue plan. By halting the blame game, team members can redirect their energy towards understanding the root causes of the issues. This approach fosters a more constructive environment, where individuals can openly communicate their concerns and perspectives without fear of retribution. It encourages a culture of accountability and shared responsibility, where everyone plays a role in finding solutions.

 

Rescuing a distressed project requires a collective effort and a united front. Instead of focusing on past mistakes, the team should focus on the way forward. This means recognizing that every project encounters challenges, and the real test lies in how the team collaboratively tackles them.

 

Jacman’s framework for saving distressed projects

Rescuing an ERP project is a challenging but achievable task with the right approach and a dedicated team. Jacman’s team has done it multiple times. We conduct a thorough assessment, identify root causes, and develop a well-planned action strategy, so that our clients’ can overcome obstacles and achieve ERP project success. During our initial consultation, we encourage transparent communication, user training, technical problem-solving, and regular progress monitoring are essential components of a successful rescue mission.

Our framework for rescuing projects in distresss include the following 10 steps:

 

1. Assess the Current State

The first step in rescuing an ERP project is to conduct a comprehensive assessment of its current state. Gather all relevant documentation, project plans, and status reports to gain a clear understanding of what went wrong and what is at risk. Engage project stakeholders, team members, and end-users to get their perspectives and identify pain points. A thorough assessment will help in formulating a strategy tailored to the project's specific needs.

 

2. Identify Root Causes

Once the current state is assessed, it is crucial to identify the root causes of the project's troubles. Common issues that plague ERP projects include poor project management, inadequate user training, scope creep, lack of stakeholder engagement, and technology-related challenges. By pinpointing the underlying causes, you can focus your efforts on resolving the fundamental issues.

 

3.  Assemble the Correct Team

A successful ERP project rescue requires the right expertise and skill sets. Assemble a competent and committed team, comprising key stakeholders, experienced project managers, subject matter experts, and proficient ERP consultants. This team should be dedicated to resolving the project's issues and have the authority to make necessary decisions.

 

4. Develop a Realistic Action Plan

Based on the assessment and root cause analysis, create a realistic action plan to address the identified challenges. The plan should be detailed, time-bound, and well-organized, outlining specific steps to be taken, responsible team members, and desired outcomes. Break the plan into manageable phases to show immediate progress and keep the team motivated.

 

5.  Prioritize Critical Tasks

Not all issues in an ERP project are equal in urgency. Prioritize critical tasks that have a significant impact on project success. Addressing these challenges first will have a cascading effect on other areas, helping to gain momentum and confidence.


6. Communicate Transparently

Clear and transparent communication is vital for gaining support from stakeholders and team members. Regularly update all involved parties about the project's progress, challenges, and successes. Address concerns and encourage open dialogue to foster a collaborative and supportive environment.

 

7.  Reevaluate Scope and Requirements:

In many cases, ERP projects face difficulties due to scope creep or poorly defined requirements. Reevaluate the project's scope and requirements, ensuring they align with the organization's goals and objectives. Streamline the scope to focus on essential features and functionalities, and avoid unnecessary complexities.

 

8.  Revisit User Training

User adoption is a critical factor in ERP project success. Revisit user training and ensure that end-users are adequately prepared to embrace the new system. Provide training tailored to different user roles and encourage hands-on learning to build confidence.

 

9.  Address Technical Challenges

Technical issues can significantly hamper ERP project progress. Engage experienced ERP consultants to identify and resolve technical challenges promptly. Ensure the system is properly integrated with existing infrastructure and thoroughly tested to avoid further setbacks.

 

10.  Monitor Progress and Celebrate Wins

Regularly monitor the project's progress and key performance indicators (KPIs). Celebrate small wins along the way to boost team morale and maintain momentum towards the ultimate project goals.

Rescuing an ERP project requires patience, perseverance, and a commitment to learn from past mistakes for a more successful future implementation