ERP Implementation: Top 10 Critical Success Factors (Part 2)

By - July 16, 2013

In this second installment of the Top 10 Critical Success Factors, this blog will examine the first three success factors – Strong Executive Sponsorship, Focused Project and Scope Management, and Minimize/Eliminate Customizations – which directly impact the success of an ERP implementation.

Strong Executive Sponsorship.  It’s important to highlight that this first Success Factor, is frequently ranked as #1 or high on the list of top reasons why ERP implementations fail by industry experts. Executive sponsorship means upper management is engaged throughout the implementation. One way to achieve this is to set up a steering committee, comprised of a company’s CEO, CFO, CIO and other key upper management executives, at the very beginning of the implementation project. As a member of this committee, executives will attain a good understanding of the overall project scope, budget, milestones and key deliverables through monthly meetings. That way, key executives can create a vision for success, approve necessary resources, motivate the project management team and make high-level and sometimes tough decisions, especially if an employee is a roadblock to the implementation’s success.  As a motivating influence, executives can promote morale boosting measures when project managers and other key employees are working long hours and performing tasks beyond their job descriptions. On a previous implementation engagement, for example, one Executive Sponsor awarded a “VIP” trophy each month to an employee who went above and beyond what was expected during the implementation. The employee’s name would be inscribed on the plaque, which would be displayed in a highly visible part of the office, followed by a company-wide email from the executive to congratulate the employee’s achievement.

Focused Project and Scope Management. ERP implementations have strict deadlines with resource restraints and any unapproved or unvetted changes in the scope of the project, such as additional modifications and customizations to the software, can impact the cost of the implementation and ultimately its success. The scope of the project must be clearly defined and managed to avoid confusions, delays and cost overruns that ultimately will affect total cost of ownership.

Minimize or Eliminate the Number of Customizations. This factor alone can significantly reduce a lot of headaches for management since customizations typically are the main reasons for significant budget overruns and delays in meeting project deadlines – all of which can significantly increase the total cost of ownership. More importantly, customizations or modifications can add to the complexity of supporting and upgrading the software in the future and have a trickle down impact on virtually every part of the implementation – from development, testing, user procedures, and user training. Best practices were designed in the out-of-the-box functionality within Microsoft Dynamics AX as well as JunctionMCR and JunctionFB so users doesn’t need to substantially modify the software. Many times, customizations are requested because users are simply against change management and want to maintain the old processes they used in doing their jobs, which often were inefficient. From experience, I found about 15-25 percent of customizations were never used six months after a Go-Live because users discovered there were better processes already within the system that could help achieve the same or better results compared to their legacy processes.

The next blog on this topic will discuss more of the Top 10 critical success factors: approved solution design, user/SME participation and engagement, process owner-led user training and sign-off, and documented user procedures.

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