Earlier this month, Waste Management (WM) upped the ante in its lawsuit against SAP to $500 million. The root of WM’s claim is that it was allegedly deceived and defrauded by SAP during the ERP selection and implementation phases.
Our recent ERP benchmark study (soon-to-be-released) points out the obvious relationship between ERP selection success and ERP implementation success, that is: a failed selection project inevitably results in a failed implementation project.
Now, ruminate on this statistic – a paltry 32% of ERP selection projects succeed. This means that 68% of ERP projects are destined to fail before implementation even starts.
Consider this: up to 70% of companies’ total ERP costs relate to service and maintenance, yet most companies fail to see the value in these services. A recent Forrester Research survey of SAP users confirms this lack of perceived value. In that survey, 85% of respondents said that they barely use SAP’s Basic Support services.
If your organization is planning to implement ERP software without restructuring its operations, you can stop reading right now. In fact, you may as well take the money you’re planning to spend on the project and throw it in the bin.
In this final article on using Milestone Deliverables to drive ERP implementation success, I lay out our framework to drive successful organizational change management.
ERP implementation projects are major cross-functional undertakings. Most failures can be attributable to ineffective project teams and poor testing. Learn best-practices to establish effective governance structures and rigorous piloting.
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ERP implementation failure is a pretty easy topic to write about – fresh material is delivered to my door almost daily. Consider, for example, the California County of Marin’s recent $30 million lawsuit against Deloitte Consulting LLP.
In that case, Marin County hired Deloitte to implement an SAP ERP system. Marin spent $18.6 million on system and implementation costs. For all of that money, what did it get? A malfunctioning system, administrative lock-ups and headaches.
Last week, I introduced you to using Milestone Deliverables – our firm’s proprietary ERP project management methodology – to drive ERP implementation success. We covered the importance of ERP project planning, business process mapping and systems testing.