by Richard Minney
With news out Monday that the US Air Force is considering scrapping their Oracle ERP system implementation after the cost ballooned from $3B to more than $5B and the schedule went over by four years, it got me thinking about why many large IT projects, and ERP implementations in particular, go over budget and over time. A survey also out this week, by Panorama Consulting, called “Clash of the Titans” compares feedback from 1,800 ERP implementations (mostly tier 1 ERP packages like SAP, Oracle and Microsoft Dynamics) and finds that the longer the ERP implementation timeframe, the lower customer satisfaction rates. Hang on a minute, I thought if you took longer and spent more money implementing your ERP system you would get more benefits, more customized user interfaces and a more satisfied customer, right? It seems not. Either bigger companies are just plain hard to please and smaller and mid-size businesses are satisfied with anything, or else by taking longer and spending more money the ERP implementation ends up worse. How can that be?
I have been implementing ERP systems for more than 20 years and can see exactly how longer ERP implementations are not only more expensive, but give a lesser result. There are obvious reasons like “the world is not standing still” meaning that when the new business system was conceived by a bunch of highly paid consultants and customer-employees merrily sticking post-it notes on brown parcel paper joined up with bits of string, it was all well and good during the initial blueprinting phase, but five years later when the darned thing is finally rolled out it is, er, out of date. But there are stronger reasons, to do with customer acceptance, quality and momentum. Let’s take each one in turn:
If you ask someone what they want and then give it to them a week later they can remember what they asked for. The user gives sensible and realistic feedback and you are still in the honeymoon phase of your relationship between implementer and end-user where you work as a team to fix any issues. If on the other hand you come back five years later, chances are that the person you originally asked has long gone, replaced by someone who has no vested interest in the successful implementation of the solution. It’s not surprising they don’t accept it, don’t use it properly and as a result the planned performance efficiencies are never realized. Acceptance is very hard over a five year timeframe.