Do-It-Yourself (DIY) projects are supposed to be relatively simple - for the most part. Sure, there are different difficulty levels for the more experienced, but at the core, a DIY project is not supposed to be something you have to consult or hire an expert to do. Then it’s not DIY anymore, is it? So, given the complications inherent in implementing an ERP (Enterprise Resource Planning) why do organizations thing they have the capacity to DIY it?
Sure, it’s easy to discard ERPs as IT projects, simple to implement if your IT department is strong enough, but an ERP is not solely an IT project. It looks like it, given that technology is no doubt the enabler, integrating data and reporting, and eating up the majority of the project budget, but it is by far not that simple. Implementing an ERP is an organizational transformation project. It’s about change management, and the way this kind of project not only significantly affects business processes and technology, but most importantly, employees.
And this, as things are likely to do when there are people involved, is where ERP projects get complicated. Fundamentally, organizations need to understand whether people are willing and ready to accept such a large-scale change. The new technology isn’t going to help people magically learn their new jobs. In some cases, it may even threaten jobs and the security employees feel. It can be unsettling for employees if they are going to have to learn new skills or feel they may be phased out because technology will make them irrelevant, even redundant. Is there a resource or a role that exists in house to deal with this level of complication? Not likely, since this kind of transformation is so monumental, it’s not a regular occurrence.
So, here’s where it gets scary. Approximately 60% of ERP projects fail. Why? For a number of reasons, including, but not limited to: the wrong resource has been implemented to bulldoze their way through the project and then leave without adequate knowledge transfer; lack of internal resources with adequate knowledge and training requiring the vendor to stay on for support longer than anticipated; and skyrocketing costs due to poor planning and internal controls.
ERPs are expensive. They’re often credited to the department and executive with the most money to spare. A lot of that is the technology, yes, but a small percentage of that budget should be used to hire an outside ERP Project Manager. We’re not talking half way through the project, when you think you just need someone to keep everything on time and on budget and not when the contract is signed either. We’re talking from the beginning of the vendor selection process.
The easy reason is because it’s easier to support a project from the get-go. Learning the project from the very beginning and troubleshooting from before implementation is a huge step towards ensuring a smooth delivery. Beyond that, however, hiring an external resource provides a neutral liaison between the ERP provider and the organization. Remember, this is a massive undertaking and inevitably causes conflict that is naturally and commonly associated with change. This kind of a situation is a no-win for an internal project manager, who will spend the majority of their time battling through these conflicts to a mutually beneficial resolution. Additionally, because the implementation of an ERP is such a special project, it isn’t likely that an internal project manager will have the transformational leadership skills required to juggle all of the balls associated with an ERP.
This begs the question: are we looking for a unicorn? Only if your organization’s goal is to shift an internal resource into the project management role for the implementation. The good news is there are plenty of external consultant resources with extensive ERP backgrounds, that magic transformational leadership skill, and an investment in ensuring the project rolls out to the client’s expectations. These people aren’t shoulder-deep in the routine processes and day-to-day activities of your organization; in this case that’s a good thing. They are, in a way, a neutral third party whose goals are: a) a smooth roll out of the project – on time and on budget; b) to ensure the goals of the organization are met; and maybe most importantly c) lead the change management component that is undervalued in ERP projects.
There are of course, other benefits of hiring outside. The expertise an external resource brings can mean more effective training for your Project Managers and Team Leads within your organization. This helps smooth the transition to the new ERP system and encourages high level buy-in that will trickle down the organization. Additionally, hiring a consulting company brings backup resources that can be leveraged quickly when necessary. This eliminates the need for the cumbersome recruitment process should extra resources be required, saving time and money on the project.
Still think an ERP is a DIY? It's a lot harder than it looks and, at the end of the day, this is one of those projects you should probably outsource to an expert.