What’s the Best Approach to Project Management and ERP Implementation?
As an independent ERP consulting firm, we have guided manufacturers with project management leadership for hundreds of enterprise software projects over the years.
Because of this, we know that competent project managers coupled with a proven methodology are the key to a successful enterprise software implementation.
Conversely, inadequate project management practices and inexperienced resources are proven root causes for the failed implementations we have seen and subsequently rescued.
Effective Project Management and ERP Implementation
When looking at the most effective approach to project management and ERP implementation, note that project management is an integrative endeavor, where every action, or failure to act, can affect your chances of success.
Key requirements of effective project management are as follows:
- The project manager assigned to the ERP project should be experienced and have a portfolio of multiple projects like yours.
- Your project manager should have a track record of leading successful improvement initiatives, enterprise software selection activities, enterprise software implementations and organizational change management projects with referenceable customers and measurable results.
- Consider structuring an enterprise project management office (PMO) that reports directly to an executive steering committee. This approach is paramount for managing resources and the project plan.
- In addition to having an experienced project manager, the PMO should include team members from across the enterprise who are accountable for the project’s success.
An Implementation Partner or a Transformation Partner?
When manufacturers and distributors turn to us for project management of an ERP implementation, they benefit because our team is up to speed on the organization’s future state needs.
When we guide enterprise software selection, our team is already embedded with key resources and functions as a transformation partner instead of a software delivery provider.
More than guiding the implementation alone, we act as a transformation partner by capturing the benefits of the new technology, which we identify during the business process improvement and selection phase.
We allocate only the staffing needed to ensure all critical implementation deliverables are covered – driven by a joint work-split analysis during the Selection Phase.
Comparing Approaches to Project Management
When comparing approaches to project management and ERP, it is useful to list out the various approaches available to the ERP project team.
We encounter three main implementation strategies in our engagements: using a software vendor, using a third-party service, and using internal DIY resources.
Using a Software Vendor for ERP Implementation
Using a software vendor for ERP implementation is a typical approach in the marketplace. But the approach has its limitations.
While the software vendor knows the technology and its functionality, the vendor is only focused on the software implementation. Vendors, as a rule, do not engage in any business process improvement or transformation activities nor do they uncover opportunities for process change found during the BPI and Selection Phases.
Moreover, vendors do not always cover all elements needed for a successful implementation – many implementation risks occur in areas that vendors do not review in their implementation methodology.
Using a Third-Party Implementation Service
Much like software vendors, third-party implementation services generally focus solely on the software implementation.
They frequently lack a strong project management capability, a robust methodology and a background in business process improvement/technology selection opportunity analysis outcomes.
We have often encountered third-party implementation services that lack the full knowledge of a vendor’s software, which means the vendor needs to be involved in the implementation anyway.
Using “DIY” Internal Resources
It is rare indeed to encounter a manufacturing or distribution organization that has sufficient staffing to run a successful end-to-end implementation without external support and expertise.
Using a DIY approach leaves the company open to critical risks, including difficulty identifying correct internal skill sets, inability to staff internal resources already allocated on other projects, and no clear career path available to the internal team after project completion
Other issues with a DIY approach involve lack of internal methodology that covers all work streams to achieve a low-risk project, and a lack of the ability to manage the more technical activities of the software vendor.
We have been called upon many times to rescue manufacturers taking on an internal enterprise technology implementation project.