More than 50% ERP projects worldwide, do not complete on time as scheduled originally and this is something a CEO or a CFO will not like at all. This means more cost, more resources, loss in expected benefits, delayed integration of businesses etc. and making users more suspicious about the success of ERP. If we can learn from the experience of others and identify the major reasons of ERP projects delay, then we will be able to plan the mitigants beforehand and the probability of going the “delay route” becomes minimal.
Here are the major reasons for ERP projects delay as per Infoverto’s experience:
- Inconsistent executive sponsorship: While everyone agrees and take actions to make sure that every ERP project is backed by strongest chairs in the office right from beginning but the lack of steering committee reviews and irregular sharing of progress of the project with them causes them to lose their interest gradually in the project and start focusing more on other priorities. It is seen that some or other division or department or business function gradually becomes less receptive and participative in process design, testing or other activities of project which delays the milestones
- Unrealistic timeline expectations: Due to huge cost pressures on all sides whether it is the client organization or the consulting vendor, the intention is to reduce the implementation period of the software to the minimum and in the process there is an increased probability of overlooking needs of change management, training, repeated testing and integration with other ongoing projects in the organization. Lower projected costs compels the client organizations to award the implementation project to the vendor with the shortest implementation timeline, while the expectations on benefits of ERP remains same and this makes sure that we see one or other unforeseen issue during the implementation period that forces us to delay the originally planned timeline
- Scope mismanagement: The project starts and reaches the end of design phase but the requirements keep on coming from businesses and the project leadership is unable to freeze the scope of project. This is a typical scenario in an ERP project and in some of the projects, the requirements even keep on coming till the final testing phase on one or other pretext and either they delay the project due to their sheer volume or issues the come up due to lack of proper time spent on their design and testing in new system. Lack of a scope freeze milestone is the root cause of this and leads to ERP project delay
- Decision making pace: The consulting vendor will not be able to implement the ERP on its own. They will need continuous inputs as well as approvals on process design, technical design, customizations etc. and delay in these decisions normally pushes the critical path milestones out and it impacts the whole project timeline. Lack of proper & defined communication, ownership and approval hierarchy within business teams will keep them pushing the key decisions to each other and hence more delay to the project
- Sub optimal resource mix: Resource quality, quantity and mix are one of the most important aspects of an ERP implementation and it is seen quite often that either the client organization is not able to get adequate participation from their resources or the consulting partner could not deploy resources on right time, with right skill set as promised and with improper onsite offshore mix. This causes in inconsistent bandwidth usage as well as skill set to deliverable mismatch which again, is the major reason for ERP project delays
- ERP customization: Vanilla or Greenfield ERP projects as they are called in two major ERP vendor’s language do not take much time to implement and it is the level of customization that drives the timeline of the project. More the customization, longer is the timeline and more is the probability of issues cropping up during the implementation period that again pushes the critical path of project, out. More customizations also make the other processes unstable and more system bugs come up during the project that again increase the project timeline
The amount of challenge in an ERP project is already enormous and knowing about the probable reasons of its delay in advance will always help in reducing the challenge considerably. This will also set the realistic expectations across all stakeholders and will reduce the overall project duration and cost.