The most expensive activity involved in ERP system replacement

Implementation is by far the most expensive activity involved in ERP system replacement – expensive in every sense of the word. Implementation budgets are enormous, so significant overruns to implementation budgets are generally seen as catastrophes. Concerted efforts are always made – and properly so – to compress the duration of implementation to the greatest possible extent. (Implementation is such an intense activity that time and money are seen as virtually synonymous. This isn’t precisely true: a schedule overrun is always a cost overrun, but it is often possible to spend more than expected very quickly.) Because of the extreme cost of schedule slippage, all ERP implementations begin with the imposition of a rigid and maximally compressed work plan, one that is negotiated and sanctified by contract prior to the start of work. The consequences of this fact are enormously far-reaching.

It is universally acknowledged that requirements-gathering is a vital part of every significant software project. But the kind of requirements gathering done by consulting firms and software sellers sets an enterprise software acquisition and implementation project up for certain failure. And it is not the fault of the consulting firm or a software seller.

Companies continue to allow, even after prior ERP project failures, consulting firms or enterprise software sellers to impose their buying methodology on their company because they don’t want to expend the time and resources to do it themselves. Most companies believe using the same buying process over and over again will some how provide a different result, which we all know never happens.

 

Download our free E-book–The Symptoms, Reasons, and Causes for ERP project failure from our web site www.adaptivegrowth.com. Or take the time to lean about an approach your company will do itself that prevents the failures that continue to occur in enterprise software acquisition and implementation projects.