major pitfalls of erp implementation in big companies

Major Pitfalls of ERP Implementation

Mohammed KhaiataTuesday 17th December 2013

Mohammed-Khaiata MohammedKhaiata m.khaiata@gmail.com@Khaiata

• According to Panorama Consulting Solutions; 2013– 172 respondents– 21% reported revenues over $1bn

Agenda

• Ground Rules• Project Execution Pitfalls • After Go-Live Pitfalls• Open Discussion

Ground Rules

One size does NOT fit all

Ground Rules

1. One size does not fit all; – Every implementation … • … is unique• … has to be aligned with Enterprise Architecture

– Best Practice is not a bible

Ground Rules

1. One size does not fit all; – Best ERP systems are

NOT always ‘best fit’ for all companies

Ground Rules

2. ERP means integrated processes– Ridiculous piece of data for one department

might play vital role in other– Inputs and outputs of every process must be

clear– It is NOT an IT project– Influencers might pull the control to their benefit

Ground Rules

3. ERP means pre-packaged software– You can NOT shoot the moon– Much customization

then validate the solution

Ground Rules

4. Management Commitment– ERP way

or the high way

– They don’t want headache

Ground Rules

5. Right Stakeholders– Right representation of functional areas– Right balance of power– Different stakeholders at different stages of the

project– Right level of governance

Project Execution Pitfalls

Project Execution Pitfalls

• From Project Management PM perspective

• From perspective of implementation phases

Scope

Budget

Quality

Schedule

Project Execution Pitfalls

• From PM perspective; Scope:– Not having clear and written • Request For Proposal RFP• Statement of Work SOW

– Not having defined modules and interfaces– Not having clear High Level Solution– Not having clear phases and milestones

Project Execution Pitfalls

• From PM perspective; Budget:– Depending on Contract Type; T&M,

Lump Sum, …• Beware of internal resource cost• Beware of Schedule overrun

– Not having defined resource plan– Not having defined RICEW components

Project Execution Pitfalls

• From PM perspective; Schedule:– Not having the right skillset– Not having dedicated time from stakeholders and

users– Not having on-time decisions– Not having enough planned time for data

conversion– Not having well-defined customizations

Project Execution Pitfalls

• From perspective of implementation phases:

Project Execution Pitfalls

• From perspective of implementation phases:

Project Execution Pitfalls

• From perspective of implementation phases:

Oracle Application Implementation Methodology AIM

Project Execution Pitfalls

• From perspective of implementation phases:

Project Execution Pitfalls

• From perspective of implementation phases:

Project Execution Pitfalls

• Requirements:– Not having signed detailed requirements– ERP means pre-packaged Software – watch limits– Not following the main stream while documenting

major exceptions– Consider approving new custom components vs.

reengineering business process– Not Gathering reporting requirements as early as

this stage

Project Execution Pitfalls

• Design:– Not paying attention to business competitive

advantage– Not Standardizing business processes– Not having signed To-Be processes– Not having signed Authority Matrix and Roles and

Responsibilities (Segregation of Duties)– Not validating reporting requirements– Not sharing Data Templates as early as this stage

Project Execution Pitfalls

• Configuration:– Avoiding detailed documentation– Not following defined checklists– Not having dedicated instance– Not Using real-life data

Project Execution Pitfalls

• Testing:– Not having unit testing– Not having dedicated functional testing– Not having full-cycle cross-functional testing – Not having comprehensive and exhaustive testing– Not performing stress and performance testing– Not having signed User-Acceptance testing

Project Execution Pitfalls

• Training:– Not having written tailored user manuals– Not identifying key users– Not ensuring hands-on training to key users– Missing influential users

Project Execution Pitfalls

• Data Migration:– Master Data• Not starting as early as transitioning from Design to

Configuration • Not getting final and cleansed data• Neglecting cross-checking master data across sources

(legacy systems, excels, etc.)• Not quantifying the right volume of data

Project Execution Pitfalls

• Data Migration:– Transactional Data• Tolerating standardized templates across all sources of

data• Not giving sufficient time for data collection• Ignoring proper cleansing through controlled sheets• Not Reconciling with master data• Not Reconciling across business functions• Not quantifying the right volume of data

After Go-Live Pitfalls

After Go-Live Pitfalls

• Running Parallel systems:– Double Effort– Attachment to legacy systems– Ongoing comparisons– If ever parallel systems will be there, then defined

timeline must be there

After Go-Live Pitfalls

• Shutting down legacy system– Not keeping it as read-only– Shutting it down in the middle of reporting period

or business cycle– Ignoring influential users

After Go-Live Pitfalls

• Putting the new system in action– Hidden Excel Sheets– Neglecting control points for key processes– Ignoring critical reports

Open Discussion