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ERP system acquisition projects are rarely deemed to fail. All the well-advertised failures come later, during implementation and afterward. Nevertheless, the seeds of these failures are invariably planted in the earliest stages of ERP acquisition planning.
ERP system acquisition projects are rarely deemed to fail: usually buyers end up buying, and then it's up to the implementers to make it work (or not). All too often ERP acquisition means little more than system selection and contract negotiation, perhaps going so far as to include the contract for implementation. In fact the acquisition phase is the only real opportunity to put in place the mechanisms that - if they are implemented - can later ensure implementation success. This is the opportunity for the buyer to control the meaning of implementation success in concrete terms that buyer, system provider and implementation partner can accept as being in their own best interests. This is, in short, the only time when overall project success can be conclusively defined in enforceable, concrete terms that all parties can willing agree to be held to. That this rarely happens should not obscure the fact that the techniques for achieving it are well understood and have been used successfully by some companies for many years.
The amount of time and effort that go into system selection varies radically from company to company. Some companies spend years at it; others (usually subsidiaries) are told which system they will buy before they begin their acquisition efforts. Companies in the first group aren’t necessarily more successful than those in the second. As important as system selection can be, a well done system selection in and of itself is never enough to guarantee implementation success.
Let’s take a look behind the statistics about ERP implementation failures and overruns. Almost every ERP vendor has a list of multiple successes – their systems have been proven to work many times over. Unfortunately, they also have many troubled implementations. The fact is that, in and of itself, the choice of an ERP product guarantees nothing. Success happens to them all, but so does failure.
Likewise, most ERP implementation companies also have long lists of happy clients; they also have other clients they’d rather not talk about. That is, their methods have been proven to work, but only some of the time.
Why do the same products sometimes work and sometimes fail? Why are the same people sometimes able to implement them and sometimes not?
The short, unpleasant answer is that ERP implementation success requires that the company acquiring the system do its homework, because failure follows from not doing it. But why wouldn’t anyone do their homework in matters as critical as this? Usually because they try to start some of it long after it should have been completed, and often because they try to outsource work that only they can do for themselves
What critical work ought to be done prior to ERP system acquisition that is often deferred to the implementation phase, or simply never done at all? Why should it be done prior to acquisition? Why can’t it be outsourced to the implementation provider?
Consider an obviously false choice: two hypothetical attitudes toward buying an ERP system, phrased in excessively simpleminded terms.
0. Go ahead and buy one without an agreed understanding of what you need or how it will be implemented or who is responsible for making it happen, or
0. Before you buy anything, agree with your system vendor and implementation partner(s) about what you need, who will provide it, when you’ll get it and how much it will cost.
Who would not agree that only the second approach makes sense? Nobody. Who would ever choose the first way? Nobody.
So everybody thinks that they acquire ERP software and implementation services based on a shared understanding between all parties, a clear business understanding that covers all significant requirements and can serve as a roadmap for implementation. That this doesn’t happen much of the time is manifestly obvious – otherwise, why does any project ever fail, to any extent? – but how can so many people be so deluded about a process that seems so clear, so fundamental?
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