The lives of CFOs and IT Directors are often about managing risk. Recently, Eric Kimberling of Panorama Consulting suggested 5 ways to mitigate the risks of an ERP implementation, after a panel discussion with CFOs. His list, with a few comments of our own, follows…
- Recognize that ERP implementations are risky. If ERP was easy, more companies would be more successful in their implementations. Vendors may tell you it’s not that risky, but in fact, it is. It’s stressful all around, we might add. Projects are fraught with risk, and it takes a good client-consultant partnership, joined at the hip, to minimize those risks. Know this going in.
- Focus on long-term and short-term risks. It’s about more than just “on-time, on-budget.” Executives often forget this. You also need to think about longer-term risks. Lowered productivity or broken processes can cost a company a lot. Thus it’s important to be sure you’re measuring gains and benefits, and paying attention to the necessary organizational and process changes.
- Acknowledge and mitigate internal and external biases. Biases both internal and external should be discussed and neutralized. Be sure to keep the focus on the business aspects over the technical aspects of the implementation. As we often like to say at our firm (to borrow from Steven Covey): Start with the end in mind.
- Steer clear of the “do it yourself” approach. As Panorama notes: “…look for consultants that address all the major components of a successful ERP implementation: organizational change, training, business process management, project management and both the technical and functional depth in your chosen software…” They add that taking the implementation into your own hands is “one of the riskiest things you can do.” We’d concur: you simply won’t know the software well enough to maximize the benefits of implementation, so why leave that to chance?
- When in doubt, leverage independent oversight of your implementation project. If you’ve chosen a good implementation partner, one with a lot of experience, they’ll provide adequate oversight and have your best interests at heart. You want someone who approaches the project, and you, as a partner. But if you don’t, an independent outsider may help you steer the course, notes Kimberling (who is admittedly biased in this regard, as an independent consultant).
Personally, we’ve seen the best and worst of outsiders. Some so-called independent consultants can bring much to the table, and keep all parties on track. Others, all too often, are merely a poor – but expensive – add-on for what your implementation partner can usually provide anyways, and often better.