After all these years, ERP implementations still fail…
05/06/2012 4 Comments
The last three months I spotted five articles in the business press of failed ERP projects. Names of companies, involved project leaders, CEOs, CIOs and lawsuits are all mentioned without camouflage; this might be the top of an iceberg. It is remarkable but all major ERP suppliers and consultants are involved. It is certainly not a one actor concourse. Off course it is very difficult to reveal the exact causes of these failures, since both parties, customer and consultant (or supplier) are making their points of defense or complaint. But there are some common components involved as we shall see. Let’s first review in short the five cases.
Case One. The plaintiff (customer) complains about the consultant lying about his skills to manage the project. The consultant will continue to defend his work vigorously. (lawsuit claim = $90 million)
Case Two. An ERP supplier cannot deliver on time making the customer to delay its financial filling. The consultant didn’t respond to the claim. (lawsuit claim unknown)
Case Three. After a formal selection, the customer discovers that the proposed ERP is dated and that the users find it hard to change to the ‘new’ system. The consultant was taken away from the project. (lawsuit claim = $33 million)
Case Four. A customer decides to halt the roll-out of an ERP due to massive budgetary over spendings. The consultant didn’t respond to the claim. (lawsuit claim = $2 billion).
Case Five. A customer was proposed a vanilla implementation of an ERP. However the implementation took massive customizations to make a fit with the organizational needs. The consultant will continue to defend his work vigorously. (lawsuit claim = $102,000)
The customer organizations in all of the former cases are in no way small and medium-sized enterprises (SME), but well staffed organizations with IT capabilities, and the consultants and the suppliers tend to have a proven (?) track record. This raise questions on the approach of such projects. Can we still use the well known techniques of project management if it turns out that we constantly ran out of time and budget? Isn’t it time to rethink our current models of governing these large complex organizational and technical projects? Is ERP really a solution or is it the problem? Maybe we should start all over again with the implementation of information systems and start to make an organizational architecture from which we can derive a workable system instead of doing the opposite. All too often ERP is proposed as a solution to avoid the difficult and often tedious exercise of making an enterprise architecture. In such a context ERP vendors make sometimes expensive promises to bridge fit-gap analyses and bring themselves in defense positions. Indeed, the most compelling factor in all cases is that the plaintiff is the customer.