A considerable amount of ink has been spilled talking about failed ERP implementations. For the media, the stories are always interesting to research and relate. For the user community, failed implementations can be instructive as well. For vendors, there is always a feeling of relief that the product involved is not their own.
In the cyber/social world, LinkedIn, Facebook as well as other boards and communities devoted to ERP, the failure discussion is ongoing and unending. Vendors and end-users alike will Monday morning quarterback whatever disaster is currently in the headlines. The latest example is a horror story at the United States Air Force.
Occasionally someone will offer up a story about an experience where some action or decision “saved the day” with regard to their implementation, and for that reason, I spent some time following these discussions.
I think most folks feel like they can learn something useful from these post-mortems. We all can benefit from experiential learning. But, we must be sure that the conversation is constructive and not just a regurgitation of the more lurid details of these disastrous events or the product of blame-storming speculation.
As a marketeer working for an ERP vendor, I’m always interested in what motivates buyers, what factors affect buyer trust and what buyers perceive as sources of risk. Indeed, risk mitigation has to be one aspect of the buyer’s decision-making process. This is not for simple self preservation; it is simply due diligence.
I’ve done a bit of research in this area, and I thought the results might be of interest to our readers.
Research and Survey Methodology
My research focused on two basic questions. These were:
- What factor is most critical to mitigating risk associated with an ERP implementation?
- What information source do you rely on for evaluating specific ERP systems?
For each of these questions, I selected several possible answers. Each question was put to an online ERP community or LinkedIn group associated with ERP. Both questions were presented in the form of a survey. The format required that only one choice be made at the exclusion of the others, and there was no “all of the above” selection available.
The ERP group I chose for the survey was based on my personal choice. I’m a member of several ERP-oriented LinkedIn groups. Some groups are better than others. By this I mean the quality of the content discussed on the individual boards and the nature of the membership itself.
Some LinkedIn groups tend to be job-search oriented or dominated by vendors looking for ways to insert a product-specific comment into a given discussion. The group I chose had a good balance in the active membership with representation from operations executives, finance types, some vendors and some input from the analyst community or industry watchers.
The discussions in this group always tend toward actual issues and stay away from brand-based comments or specific system bigotry. In short, the group seems impartial and well versed in the subject of ERP, ERP implementations and application of the technology in real-world instances.
First question: What source of information are you most likely to rely on for evaluation data related to specific ERP systems?
This question appealed to me as a marketer of ERP systems. But, it also should be helpful to those researching ERP systems as a way to factor in or weigh the validity of information collected by source. I can’t say the results are shocking. Most folks tend to trust people they know or understand, and Industry Peers would certainly come closest to fulfilling that requirement.
I was surprised at the dominance of Industry Analysts as the second-place choice. I had expected more parity with the Third-Party Consultant choice and the Professional Group choice. Obviously, this is good news for the Gartners and Aberdeens of the world.
There was no surprise at the low level of confidence in vendor-supplied information. I think most vendors know that their materials are going to be looked at with some degree of skepticism. What vendors need to do and what does have credibility is to incorporate the voice of their customers into their publications. A customer relating how they saved “80 percent over a year” is much more effective than a product sheet that merely asserts that the product can save the buyer 80 percent.
I think what we’re seeing here is really a change in the nature of the buyer or evaluator. Organization membership is expensive monetarily to the company sponsoring the membership and expensive to the individual member from the standpoint of time commitment. Also, people are more likely to be generalists in this era as opposed to being tightly tied to a specific professional discipline.
Second question: Which factor is most critical to mitigating risk associated with ERP implementation projects?I asked this question because most after-the-fact discussions regarding these projects are centered on what went wrong. I think people would value more emphasis on learning how people assured a positive outcome.
In the comments I received from participants, many bemoaned the fact that there was not an “all of the above” choice in the answer. I think that would have won handily if it were offered.
The overall winner was a more generalized choice. Essentially the 41 percent selection of “Effective communication between all parties” could be construed to cover some of the more specific choices.
I was surprised that the Project Scope response was not selected more frequently. Project Scope creep is nearly always cited in the articles that detail failed implementations. I still think it is critical to the success of any project.
Oddly, I also thought the “system selected” choice would do a little better as well. I think that ERP system offerings are highly diverse in terms of capabilities and “baked in” domain-centric capability. But, perhaps people get this part right, so it’s not seen as a concern.
The other high-frequency response was not a surprise. High-level, active sponsorship by the corner office or C-level suite is important as well.
Obviously, there are other issues to consider when selecting a system. I think these survey results do give us a good start on developing a selection and vetting process that serves the buyer effectively.
One other point I would make to readers is that there are lots of information sources related to ERP. Shop around for the ones that make the most sense for you and your organization. Participate in online groups. LinkedIn offers many choices from general ERP to ERP for specific verticals.
There is lots of help available for the expenditure of a little effort.
Finally, I would like to thank all of those who generously participated in these surveys and especially the folks that submitted comments and opinions.