The 4 crucial aspects of an ERP project
Everyone knows the frightening stories about ERP implementations that terribly failed. Projects that last forever, go way over budget and/or never lead to the desired end result. Project management is for a big part about managing expectations. There are so many factors influencing the success of an ERP implementation. You cannot (fully) control all of these factors. But the key to success is to emphasize on four crucial aspects: Money, Time, Quality and Functionality. In Project Management this is referred to as the “Devil's Quadrangle”. If you focus on just one corner of the quadrangle, that will have a big impact on the other three corners as they are inextricably interconnected. Make sure to monitor all aspects of the Devil’s Quadrangle and you will meet the expectations of your project.
An important objective or even a requirement is that the ERP project is completed within budget. By setting up a detailed budget with several phases and milestones you will be able to timely identify where you expect to deviate from the planning and you can directly act upon this. This way you prevent unpleasant surprises, such as a project that is not even halfway yet, but on which you have already spent the complete budget. Only for extra features and/or changes in the software that actually add value it should be allowed to increase the budget. This however always affects another aspect of the Devil’s Quadrangle, in this case (project lead) time.
At the start of the ERP implementation you already decide on when you will go live with the system. As this date comes nearer it becomes tempting to postpone the go-live several weeks. But only do so if there is really no other way for you. Just like in budgeting, control and predictability are of great importance when it comes to planning. A comprehensive planning with an insight into the quantity of work per person per phase enables you to plan your resources for the project in time. And that ensures you that the go-live date remains realistic and delay will not be necessary or perhaps a very deliberate choice.
No one will argue that a high quality project as your end result is very important. What you deliver in the project should meet the specs, should be tested extensively and should support the processes very well. The objective of the ERP implementation is to take a step (or two) ahead and enable growth of the organization; you want to be prepared for the future. Yet, time constraints or limited budgets, sometimes cause projects to compromise on quality. That is of course not what you want; do it right or don’t do it at all. Opting for quality is not the same as striving for perfection. What you aim for is a decent and stable basis at the go-live which can be optimized in follow-up projects. If you choose primarily for quality, then as a consequence the project will take longer or the required budget will be higher.
The functionalities which you hope to have in the new ERP system strongly influence the size of the project and the future of your organization. Will you stick to the standard or choose for customizations and accept the consequences of that choice? Which features in the existing ERP or IT environment (e.g. interfaces or mobile solutions) should be retained and which features are you willing to let go off? Sometimes because there is no reason to hold on to it, sometimes because of higher efficiency. Which features do you absolutely require at go-live and which features can be added later on during optimization projects? No easy questions, but definitely issues to think about before the implementation, because it always influences the other three aspects.
All aspects of the Devil’s Quadrangle are equally important. But you cannot opt for all four. Within each project, one aspect is leading with the other three being subordinate thereto. A decision to implement a change in the project should be taken with respect to the initial decision and by minding its impact on other aspects. Make sure you understand the consequences of your decision and realize whether the decision is justified or not, so you can live up to your own expectations!
Alex Bouwmeester is Project Manager Europe at Dysel and guides the customer from start to finish during the implementation.