According to several recent surveys, up to 75% of all ERP projects either fail outright or fail to deliver one or more key project goals. After more than 30 years of managing large software development projects and 15 years specifically implementing PeopleSoft and Microsoft Dynamics ERP systems for clients ranging in size from small businesses to Fortune 100 companies, I have noticed some common mistakes that must be avoided for clients that want to succeed.

Many organizations treat an ERP (Enterprise Resource Planning) system implementation as just another software development or package implementation project that can be handled through the usual IT Department or PMO process. This is rarely the case. The purpose for implementing an ERP system often revolves around:

• Providing a common platform to process all key operational activities and transactions
• Modernizing outdated critical systems and avoiding end-of-life support issues
• Implementing a platform that allows growth and organizational change

If one of more of the above goals is a driver of your ERP project then the project will likely impact a significant portion of your enterprise. Accordingly, failure puts the entire enterprise at risk. Before starting an ERP implementation, you must plan to succeed and understand the likely causes for failure.

I am going to discuss some common mistakes in a few blogs. Making any one of these mistakes is likely to cause the entire ERP project to fail. Unfortunately, a blog is not going to provide all of the information or guidance you might need. The purpose of these blogs are to outline and explain the issue and to encourage you to take the steps necessary for success in reaching your ERP destination. 

I am going to use Microsoft Dynamics 365 Enterprise for Finance & Operations (D365F&O) as my subject ERP for these discussions. The issues for D365F&O will be similar to the issues for implementing NetSuite, Epicore or other ERP systems.

Some common ERP implementation mistakes:

1. Lack of a clearly defined scope and timeline
2. Key business processes that are loosely or not defined
3. Lack of ownership for legacy data migration
4. Process champions and core team members either not defined or not committed
5. A poorly defined project plan that is not used to drive actions

Lack of a clearly defined scope and timeline

In this article I am going to look at how a lack of scope definition can cause ERP implementation failure. Once a decision has been made to implement a new ERP system for one or more key business processes and a software package like Microsoft Dynamics 365 Enterprise for Finance & Operations (D365F&O) has been selected, many companies think that the scope of the project has been defined and they can move forward with the implementation. This is an inadequate definition of scope. To lock down both scope and timeline, you must know:

What are the specific and measurable goals for each key process that must be achieved and exactly how will those goals be achieved?

Examples of specific and measurable goals:

• Process 10,000 inbound sales orders per hour at peak times with a CSR interaction required on less than 500 per day
• Monthly financial close takes less than 2 days for all companies with a consolidated financial statement produced on day 3
• Landed costs must be applied to each inventory item upon receipt into the warehouse
• Outbound fulfillment of up to 1,000 sales orders of 100 items each to a single destination on a given day must include consolidation into the minimum number of containers and a single outbound shipment
• Use ASCS from Sonata Software to track inbound on-the-water products for departure date, arrival date, duties and other relevant cost elements as well as using price formulas to create true purchase costs for stocking inventory
• Use Data Masons Vantage Point to provide EDI for Purchase Orders, Vendor Invoices, Customer Invoices and Advance Shipment Notices

If the specific results that mean success are not defined before the project implementation begins, the door is open for success to be re-defined as the project progresses. The meaning of success then becomes unclear and selecting a go-live date target becomes VERY difficult. Without a set go-live date, conference room pilot dates, training sessions, user acceptance testing sessions and many other activities that must be scheduled well in advance are at risk. If users do not know several months in advance of major participation events, they cannot schedule vacations, training, process improvements or other key activities that are directly or peripherally related to the ERP project.

When must the ERP modules be implemented for the project to be a success?

The implementation of an ERP system is an incredibly complicated process that will involve many team members from multiple departments performing activities like

• Legacy data cleanup and migration
• Modification requirements definitions including Functional and Technical requirements
• Conference Room Pilots to show and prove features and modifications
• Core team training and re-training
• Test plan and test case development
• User acceptance testing
• End-user training an adoption support
• Many, many more tasks

Each of the above tasks is a significant effort involving coordination between IT, users, management and external partners, ISV providers and consultants. 

You must set a target date for the go-live(s), build a project plan including as many variables and goals as possible to create a realistic plan to hit the target date and then analyze the plan both from a resource availability and level-of-effort perspective and then again from a sequence, critical path and outside influencers perspective.  If modifications to the D365F&O package are expected and an Agile development method will be used to deliver those changes, a significant float must be added to incorporate the likely delays inherent in Agile (iterative) development.

So to be clear, the go-live date is a key enterprise goal and the entire project must be sequenced to hit this goal. If a go-live date starts to move, everyone involved in the project begins to lose faith in the project and obtaining adequate user time for critical activities becomes much more difficult.

In summary, the project Scope should include clear and measurable targets and the methods to achieve these targets before the implementation begins. The Scope is documented in a Solution Design that is agreed to by all involved parties. The project Timeline must be documented and accepted by all parties and include key milestones starting with the go-live date and include when design will be complete, configuration and development will be complete, when user training and testing will occur and when legacy data migration will be completed.

The next topic will be on the documentation (or lack) of key business processes.