All entries for Saturday 16 April 2011

Critical Success Factors to make your ERP Project Successful

Eric Kimberling (2006) mentioned some of the critical success factors to make an ERP project successful. The basis on which Eric presented success factors was that many of the companies filed lawsuits against ERP software vendors because of their failed implementation. He also said that many companies assume success or failure is the fault of the software you purchase, but in reality, 95% of a project's success or failure is in the hands of the company implementing the software, not the software vendor. Following are the critical success factors that Eric mentioned:

1. Focus on business processes and requirements first. Too often, companies get tied up in the technical capabilities or platforms that particular software supports. None of this really matters. What really matters is how you want your business operations to run and what your key business requirements are. Once you have this defined, you can engage in a more effective ERP software selection process.

2. Focus on achieving a healthy ERP ROI (Return on Investment).This requires doing more than just developing a high-level business case to get approval from upper management or your board of directors. It also entails establishing key performance measures, setting baselines and targets for those measures, and tracking performance after go-live. This is the only way to maximize the business benefits of ERP.

3. Strong project management and resource commitment. At the end of the day, your company owns the success or failure of a large ERP project, so you should manage it accordingly. This includes ensuring you have a strong project manager and your "A-players" from the business to support and participate in the project.

4. Commitment from company executives. Any project without support from it's top-management will fail. Support from a CIO or IT Director is fine, but it's not enough. Briefing should be given to CEO regarding the project so that problems and issues should not arise in the future.

5. Take time to plan up front. An ERP vendor's motive is to close a deal as soon as possible. Yours should be to make sure it gets done right. The more time you spend ensuring these things are done right at the beginning of the project, the less time you'll spend fixing problems later on.

6. Ensure adequate training and change management. ERP systems involve big change for people, and the system will not do you any good if people do not understand how to use it effectively. Therefore, spending time on money on training, change management, job design, etc. is crucial to any ERP project.

7. Make sure you understand why you're implementing ERP. This is arguably the most important one. It's easy to see that many big companies are running SAP or Oracle and maybe you should too, but it's harder to consider that maybe you don't need an ERP system at all. By clearly understanding your business objectives and what you're trying to accomplish with an ERP system, you will be able to make a more appropriate decision on which route to take, which may or may not involve ERP.

By ensuring you have these 7 critical success factors in place; your organization will be much more likely to maximize the business benefits of ERP.

: 16 Apr 2011 00:04 |  Comments (0) |  Close comments |  Report a problem