ERP Project Management: Agile – a new ERP Implementation Journey
Although the speed of change in most businesses is running at the fastest pace ever experienced, the standard ERP Project Mananagement approach to implementing a new ERP system continues to follow prescribed stages. These stages are structured, with formal sign-off at the end of each stage and no concept of revisiting the defined solution once the process has moved. Stages that cover defining the business need, designing the solution, developing the solution, testing the solution and then implementing it. Sounds like the project will always be in control – so why are so many ERP projects deemed to have “failed?” It is these stages, visited sequentially, that have lead this approach to be termed “waterfall methodology.”
Generally speaking, the reasons why ERP projects are seen as failing can be grouped into five key areas:
- A budget and implementation plan based on anything other than the reality of the situation
- Key business processes and requirements not being formally documented
- Scope changes running out of control
- A lack of management engagement and commitment
- The gradual building of a monster, too functionally rich and too heavily reliant upon customisations, to allow for simple but robust testing
Agile Methodology has grown up to address the issues of trying to implement any business system in a purely sequential way based upon a scope determined right at the start of the process. Agile ERP Project Management offers flexibility whilst still encompassing controls and processes. It recognises that the key to successfully managing projects is to break them into stages, plan the current stage in detail, whilst maintaining flexibility with regard to subsequent stages.
Agile knows that you don’t often get it right first time so is focused on evolving quickly, listening to the user responses and then adapting the solution through a series of iterations. It makes sense to build simpler solutions that are fit for purpose, easy to test, likely to be smoothly adopted, and simple to maintain; then to subsequently modify these solutions based on user feedback.
Business needs and goals change so quickly these days that you simply cannot afford to spend months designing the ultimate business process following the traditional process of ERP system implementation. An agile approach builds lean, minimum viable processes, deploys them quickly and continuously, testing the results against the old process.
Mistakes and modifications can be quickly spotted and changes rapidly made so the next iteration is more robust than the previous version. In addition, bringing people from different divisions within the business together to develop a single business solution represents a big shift from previous thinking.
So how does the Agile ERP Project Management methodology address the five key areas of project failure outlined above:
- Assuming that the selection process was focused on selecting a system that closely met business needs, the budget and implementation plan should be focused on implementing a vanilla system as soon as possible. This will control costs but also enable the business to start realising benefits quickly – whilst allowing solutions to be enhanced through further iterations.
- It is important that business processes are based upon the standard functionality in the system rather than spending a lot of money and time on replicating the old ways of working.
- With a robust solution based on standard functionality, changes should only be made where there are business-critical gaps. These should be formally documented, investigated and signed off before any modifications are carried out.
- Shorter, more focused timescales make it easier for management to engage in the process especially as they can also see when the new system should start delivering business benefit within their area of responsibility.
- By implementing the base system, then developing the solution iteratively and by focusing on business-critical processes defined at the start of the process the overall solution should be simple to test and easy to adopt.
Finally, the Agile approach needs to be adopted by all parties involved in the ERP implementation. Vendors should look critically at the way they implement projects and, as experts on the solution, actively encourage their client to see the benefits. The client, and any implementation partner, should, from their side, be robust in challenging any requirement that moves the solution away from standard – whether suggested by users, IT or the vendor themselves.
As a result, everyone will start to see projects that deliver more business value at a lower cost than projects run following waterfall principles can ever hope to achieve.