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This is an online forum to share experiences, lessons and learning about the selection, implementation and return on investment for Enterprise Resource Planning (ERP) Systems. We also like to discuss Customer Relationship Management software (CRM) systems, Social CRM (SCRM) & social media, Manufacturing Systems, Supply Chain Management (SCM) systems and Payroll & HR Applications.




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Rebounding From Failed ERP Software Implementations

ERP Failures Provide Valuable Lessons Learned For Others

You may recall from a prior blog post on ERP software failures how Marin County, California had sued Deloitte Consulting for $30 million after the SAP ERP project they began together with high hopes in 2006 failed to work as designed and planned.

Now that the dust has settled, Marin County is taking another step as they work to get their ERP plans back on track. They're about to announce several alternative programs to bring in a new ERP application that will finally accomplish their IT objectives.

In a 13-page report titled "Assessment of Marin County Software", the committee within the county's IT department looked at a multitude of alternatives for beginning anew. To their credit, giving up was never on the list.

In the meantime, as they set out their new plans, the county has put the problematic SAP ERP application into a 'maintenance mode' that will allow them to invest the needed time to find and implement an alternative ERP system.

As I read through the report, I kept thinking about how the best people in any field always seem to find calmness, clarity and wisdom at moments when things appear to be at their worst. The report identified several smart ideas for making the most out of what had already occurred.

The alternatives were straight-forward:

  • Keeping the SAP ERP project as it exists today, with no further work, at a cost of $34.7 million over the next 10 years.

  • Continuing to fix the SAP ERP system and continue to provide support for improvements, at a cost of $49.8 million over 10 years.

  • Fixing the SAP ERP system, then continuing to run them without continual upgrades, at a cost of $34.1 million over 10 years.

  • Implementing a new ERP application after a new and updated review process, at a cost of $26.2 million over 10 years.

Sometimes during a troubled IT project, you have to have the wisdom to know when to stop throwing good money after bad.

Comprehensive analyses illustrated that fixing what was broken would still cost more than just starting from new, according to the report. After spending all the money that's been spent so far, this had to have been a tough conclusion to reach, but it's a sign of smart leadership at a time of crisis. Prior investments are sunk costs.

Particularly revealing about the analysis report is that it never hesitated to toss out the county's original approach toward an ERP implementation in favor of new ideas that might not have been considered the last time out. "At this stage, management is recommending that we look at other system options and recommend the following approach:

  1. An incremental, phased approach to the replacement of SAP ERP, rather than a 'big bang' approach that was intentionally followed in the prior SAP implementation, as was advised by the outside consultants.

  2. Increased IT team involvement up front to guide the steering committee of employees from key departments in recommending a system and leading its implementation toward conclusion.
  3. Reduced reliance on outside consultants and more on County staff, who have a greater, vested interest in the outcome and success of the implementation.

  4. Routine communication with staff, the public and Board of Supervisors in the form of regular status reports and meetings, including meetings with an oversight subcommittee of the Board for the project."

Here was a government IT team telling it like it was. Go with an incremental, phased approach rather than a waterfall or big-bang approach as suggested previously by outside consultants. Get the end users involved in the process. Listen to them. Empower them. Create and maintain regular communications with end users and staff on how the project progresses. Now this is a good plan for an ERP implementation that can be truly successful.

That's what every public government or private enterprise wants to see when they are about to travel on such a challenging road that can be filled with land mines of every kind.

Matthew Hymel, Marin's county administrator, declined to comment on the on-going case, citing the lawsuit they filed against Deloitte. The report now goes before the Marin County Board of Supervisors for their review and action.

So what can we learn from this as we plan, implement or upgrade our ERP applications and other IT mission critical systems? Remember that a well-managed project is where you fully understand a clear and measurable scope and business objectives for what you are trying to accomplish, before you actually begin any software deployment. Remember that you can't start building a house without signed off plans and until you know how to do everything that's involved, from the plumbing work to the electrical wiring.

Be fully mindful of what it will take to lay out, accomplish and run the project so you can make it a successful effort.

Be sure that you have the right people and mix of people on your team as you embark on the project.

Get true buy-in from your end users by keeping them involved from start to finish.

Test, test and test again.

Listen to the people on your team and hear their words carefully. If along the way someone says that there's a problem, honestly analyze and deal with it at that moment. Such early resolutions will save you massive cycles of time and a whole lot of aggravation later.

None of this will be simple for Marin County as they recommence their ERP process over again. But this time, it sounds like they are taking the lessons they've learned over the last four difficult years and are putting them to work to help avoid similar problems in the future.

This is how a failed IT project can be a great tool and motivator. Learn from your mistakes and failures, and then attack and defeat them. It's one of the most inspiring things that can come out of an IT debacle.

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