The Elephant in the ERP Room: What Makes Implementing Big Projects So Risky?

Why are ERP projects so often so disruptive in organizations that are otherwise accustomed to managing and planning all variety of marketing and manufacturing projects?

The reason is simple: companies implementing ERP don't specialize in project management, and they rarely have a dedicated or a formally trained project manager. They are also purchasing products and services that they often know little about, and effectively they don't do project management in its traditional sense.

Companies that have no project or project management experience are by large functional organizations, which is by itself a risky environment for projects. But with ERP, the risk is multiplied, because ERP projects are almost exclusively cross-functional and they span several functions at the same time. All disadvantages of functional organization structure come screaming at you:

• Nobody has (or wants) full responsibility for the project.
• Needs of a single department often overshadow the needs of the whole business.
• Cross-functional issues rarely have an owner, and often end up not being taken care of at all.
• The project is out of focus, since each department is primarily concerned about their own work.
• People involved in the project lack motivation, because the project is their secondary responsibility. They are often measured for work performance, and rarely for project performance.

(A perfect storm, eh?)

Typically, the problems come to a head when the organization implementing ERP spends several times as much time on a project as the consultancy: one consultant often works with several users, and for one consumed consultant/day the customer spends several man/days of their ...