HOW TO RECOVER FROM A FAILED ERP IMPLEMENTATION

In previous posts, we’ve provided our top 10 tips for successful ERP projects and the many faces of failed implementations and how to avoid them.  We all know that prevention is better than crisis management but that advice isn’t exactly helpful when you’re actively trying to fix a failed ERP implementation. 

Often, troubled implementations have run way over budget, behind schedule, and/or failed to deliver expected business benefits.  Unfortunately, failed implementations are all too common. If you’ve ever experienced, or are currently experiencing a failed implementation, you know how devastating it can be for an organization.  The aftermath of this type of project failure can disrupt and demoralize individuals at every level.

A successful ERP recovery plan will restore business confidence and re-align the project with business priorities.

How to Fix a Failed ERP Implementation

If you’re struggling with a failed or failing implementation, don’t lose hope! Many organizations have turned to ACC to guide their project recovery efforts.  These turnarounds are often heavily based on strategic analysis of past failures and weaknesses, and the development of a comprehensive recovery plan.  Below we’ll outline four steps you can take to get your organization back on track.

1.      Identify the Breakdown

Your first step to fixing an unsuccessful ERP implementation is to assess why it has failed.  There are countless reasons why ERP projects fail but, generally speaking, they can be divided into six problem areas with various subcategories.

  • Business Case
    • Strategic Need
    • Business Benefits
    • Budget
    • ROI
    • Timeframe
  • Business Processes and Requirements
    • Business Priorities
    • Business Requirements
    • Process Ownership
  • Technology and Architecture
    • Solution’s Standard Functionality
    • System Integrations
    • Customization
    • Infrastructure
  • Implementation
    • Project Management
    • Timely Decision Making
    • Testing
    • Data migration
  • Resource Management
    • Internal Resources (ie. Project Team)
    • External Resources (ie. Consultant, Implementation team, Partner)
  • Change Enablement
    • Stakeholder Support
    • Business Impact
    • End-user buy-in
    • Training
    • Business Process Re-engineering

Any of these areas that experienced performance issues during the unsuccessful project should be further examined. Some of the most common issues that can sabotage an implementation project include choosing the wrong system or vendor, choosing the wrong implementation team (either internal or external), a breakdown in project management, and/or a lack of business process improvement/change management within the organization itself.  By uncovering the root cause(s) of the failed implementation you will be able to recommend solutions and move forward with a recovery plan.

2.      Assess the Short-term and Long-term Effects

The next step is to assess the short-term and long-term effects on the organization.  After a frustrating implementation project has failed to deliver promised results, it’s not uncommon to make emotional decisions.  By putting together a complete analysis, your decision on how best to move forward will be backed by quantifiable metrics.

Assess each area, department, and business process that the system is affecting.  Identify any bottle-necks or operational pain points.  You’ll need to identify what isn’t working on a department by department and function by function basis.  From there, determine if these issues are short-term “growing pains” or long-term issues and prioritize accordingly.

3.      Fight or Flight

As in any crisis, you have two options: Fight or Flight. In other words, after a failed ERP implementation you will need to decide whether to salvage or scratch the new system altogether. There are pros and cons to each.  Sometimes it’s best to start over, and sometimes it’s better to fix what’s already been done.  Steps 1 & 2 will help inform which option will yield the best results for your organization.

Fight

Use your responses to step 2 to divide the issues with the current system into two categories.  One category is the “low hanging fruit,” quick and dirty fixes that will alleviate disruption, and improve efficiency with minimal effort.  The other category will contain more complex fixes with higher costs that will take longer to implement.  Prioritize your problem/solution combinations to arrive at the top 5-10 areas where you will experience the most immediate business improvements at the lowest cost.  Many of these fixes will not involve ERP functionality, but will instead focus on business processes and organizational change management.  Implement these 5-10 solutions first.  Once you have a few quick wins in place, use that organizational momentum to prioritize and implement more long-term solutions as time and resources allow.

Flight

Sometimes, an ERP implementation project has failed so spectacularly that it simply cannot, or shouldn’t, be salvaged.  Often, these went off the rails early in the project even though problems may not have become obvious until after the system goes live.  Of course, a new implementation will involve re-investing time and resources.  However, that investment can be the lesser of two evils if the issues in the current system are either too many or too complex.

If choosing to undergo a fresh implementation, ensure that you follow best practices in order to avoid common pitfalls.

4.      Learn from the Failed Project

Your recovery project will yield the same negative results as the original failed implementation unless you learn from your mistakes and make corrections.  Whether you choose to salvage the current system by making these changes or start from scratch with a whole new implementation, you’ll need to do things differently.  Revisit the list of mistakes from step 1 often throughout the recovery process.

It can be a long and arduous road to recover from a failed ERP implementation, but it is necessary in order to get your organization back on track.  You’ll need to take an honest look at what made your initial project fail, including your implementation team, project management, and choices in vendor and installation team.  Don’t be afraid to make internal business process changes in order to leverage the system’s functionality.   But above all, ensure that you’re learning from past mistakes to avoid repeating them.

To see how we can help you turn around a failed ERP implementation, contact ACC today for a free consultation.  Our experts will assess the damage and help you determine the best course of action to set your organization up for success.


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