In what practical ways – if any – is ERP implementation project success different from the absence of failure? Both casual and thorough analysis of ERP failure agree on several interesting points.
Our topic. Projects to implement ERP tend to be difficult, expensive and drawn-out. They are often full of painful surprises; they often overrun budgets and schedules that were extravagant in the first place. They fail entirely in an alarming number of cases. Why this should be so is not immediately apparent. If we list, at a fairly high level, the tasks required to implement an ERP system in a company that's already familiar with ERP practices, what we see is a significant but not daunting amount of work. To be sure, some unknowns are usually involved. Nonetheless, companies that struggle to implement or re-implement ERP systems perform what would appear to be more complex tasks quite successfully in the course of creating and delivering their own products. One wonders why a little of the will and expertise that makes them successful in more challenging areas can't be adapted to implementing ERP: a task that needn't be especially innovative and which, on the whole, appears to be quite well understood. One wonders why ERP packages that perform magnificently at some companies can't get off the ground at their closest competitors. One wonders how implementation consultants can go from heroes on one project to beaten, humiliated failures on the next. One wonders, finally, how the practice of ERP implementation, a business process that's well into its third decade, can appear, when judged by its results, to be so haphazard, unpredictable and dangerous.
The meaning of success and the meaning of failure. When any endeavor (any project in the both the loose and tight senses of the word) is adequately described before being undertaken, success and failure are mirror images of each other: to succeed is simply not to fail; to fail is simply not to succeed. But if the goals - the hoped for results - of an endeavor are less than fully stated, the mere absence of obvious failure need not be the same thing as success. In less than thoroughly planned endeavors, it is possible to avoid everything that had been identified (and feared) as a condition of failure and still not accomplish the desired results. Nowhere is this phenomenon more common than in the practice of acquiring and implementing major business application software.
Failure seems like a simple idea, but when we try to examine it in detail it turns out to be more complex than we might expect. Usually the potential for failure includes quite a few entirely different things: it's hard, in fact, to imagine anything worth doing at all that couldn't fail in many more ways than it could succeed. The looseness of the word is important. The prevention of failure is self-evidently important to us, but if the meaning of failure is hard to pin down, then the things we identify as the causes of failure may be even more nebulous. This matters because every potential cause of failure is a risk that must be managed. Any risk we fail to anticipate is unlikely to be managed. The very failure to anticipate risk is, in itself, the greatest danger we face.
Reported statistics on ERP project failure vary from survey to survey, but tend to fall into consistent ranges.
. 15 to 25 percent of implementations are reported as outright successes. . 15 to 25 percent are reported as utter failures, where the entire project had to be abandoned.
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. 50 to 70 percent are reported as "challenged" in some respect, usually: o The project is late, or o The project is over budget, or o The system is implemented with less than hoped for functionality. It is in this last group - at least half of all reported projects - that we see the sometimes ambiguous relationship between the definitions of success and failure. These projects are not usually deemed failures, yet they don't qualify as full successes. This will be the overriding theme of this paper.
So what do we mean when we describe an ERP implementation project as a failure? It turns out that we are identifying a few - a very few - somewhat different but overlapping symptoms of dissatisfaction with our results. Let's look at the evidence.
First we will take an... [download for more]
