June 14, 2011

ERP Project - Key Success Factor 6: Effective Project Management

ERP Implementation project includes all activities required to fully implement the application, process design, requirements gathering, configuration, business & technical testing and end user training.

Lot of ERP implementations have taken longer than expected time and reasons for this among others are:

  • Organizations had unrealistic expectations regarding project timelines
  • Organizations did not account properly all the project implementation activities during the planning phase
  • Many ERP vendors fail to adequately manage client expectations on implementation duration
  • Organizations try to develop an estimate before a plan has been identified
  • Organization’s project plan should also include non-vendor related items such as process & workflow definition, data migration and customization effort to meet unique business requirements.

Normally, the ERP vendor’s Implementation project plan would cover all the activities from the technical perspective. But the following critical steps should also be addressed:

  • Define key business objectives
  • Frame project schedule specific to the implementation project (instead of a standard plan) & cover all the project implementation details by understanding the ERP system & implementing organization requirements
  • Aggregate all the business transformation activities & corresponding resources required for design, testing, training, change management, business process documentation & Integrate it with the technical activities
  • Track the dependencies between the project & business areas involved in the project plan
  • Gather input for resource forecasting & collaboration, track milestone achievement status and align it with the organization’s environment & constraints

An effective project & program management system for an ERP implementation project should take care of mitigating the risks involved in the following tasks:

  • Planning
  • Business process re-engineering (AS-IS, GAP FIT & TO-BE)
  • Implementation of Standard functionality / modules of ERP
  • Planned Customization to take care of the critical requirements (business & technical), which are identified through the Gap-fit analysis
  • Key Integration requirements for legacy systems
  • Resource requirements to execute the change management process
  • Understanding the scale of data conversions & related data cleansing
  • Coordination of business resources for testing & validation of functionality
  • Training users of the ERP system

Most successful ERP implementations have realistic expectations about how much time & effort is required for the project. It is possible to implement ERP technically in a very short time frame. But it may not add the expected business value, especially, when there are not sufficient internal & external resources to support the project. A proper project management office should be in place to ensure that all (business & technical) considerations are recognized for a successful ERP implementation.

The effective project management can resolve the following issues among other things in an ERP Implementation Project:

  • Enable the required level of transparency / visibility to all on the project progress
  • Manage expectations across the organization especially with the project stakeholders
  • Manage the time, effort & cost of all the stakeholders involved while meeting the planned project objectives
  • Escalate early the critical risks with relevant mitigation plans to those responsible to manage such risks
  • Establish clear & strong project structures to be maintained through sustained management support

Expectation management among stakeholders depends on persistently eliminating the misalignment between relevant objectives of all the project stakeholders. It consists of defining, managing & integrating the below processes & provides a sense of common ownership & commitment:

  • Communicate key milestones / deliverable & their target dates to all the stakeholders
  • Overall implementation schedule, effort & cost
  • Process to keep track of the project schedule & measures to gauge the performance

ERP Project Manager – Roles & Responsibilities

  • Provide overall guidance for the project implementation methodology
  • Define & manage project (functional & technical) scope, deliverable, resources & critical delivery dates
  • Develop & maintain project work plan & budget
  • Lead project status meetings
  • Report issues, track project progress & update all the stakeholders
  • Acquire & assign resources required for the project
  • Manage issues resolution & escalate as appropriate
  • Manage the impact of process/system change
  • Anticipate proactively & manage risk areas
  • Motivate, manage, prioritize & assign work to team members
  • Oversee quality assurance review of development including documentation
  • Develop & facilitate project team & end user training plan
  • Develop data migration plan

2 comments:

  1. The hurdles to project completion that you mentioned are indeed right and the major among them I consider is Organizations putting unrealistic expectations regarding project timelines.
    Lauren
    sap support costs

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  2. Scope of erp is vast as it integrates all the business processes of different departments and functions across a company onto a single computer system that can serve particular needs of the different departments.Scope of erp is vastly expanded as various departments shares information & communicate with each other.

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