ERP – an oldie still worth listening to

Sidney HuiEnterprise resources planning (ERP) is the vanguard of many businesses’ IT investment. It is often a major IT investment and the very first large-scale automation project for local enterprises. Most of these enterprises, large or small, have implemented ERP systems for some time. With more enterprises entering their journey of digital transformation, they are re-entering this war zone.

It is no small effort staging an ERP project considering the expenses, time and human resources involved. For large-scale ERP deployment covering multiple functional divisions—for instance, finance, manufacturing, logistics, and procurement—it is not unusual for a project to take several years.  More often, this kind of project overruns on both timeline and budget. 

However, enterprises generally do not gain any obvious competitive advantage with a sophisticated ERP system, as most competitors are also equipped with something similar or even the same packaged software. With so much resources pouring into a single project, how can a corporation get better returns?

With proper and well-planned implementation, an ERP system can still generate enormous operational advantages—building a good foundation for the enterprise to embark on its digital transformation journey. 

Project charter on the radar

Before the ERP system procurement or replacement project commences, the whole organization, not just IT, must assemble all the related parties to discuss, plan and agree on the goals and objectives of this ERP project. 

A project charter is one of the most important project management documents and must be developed and endorsed by all parties involved. A project of such nature usually lasts a long time. Some of the staffers could have left the organization and been replaced by new members, who do not understand the project. The project charter is something that both new and existing team members can always refer to on the goal and mission. It is important to avoid derailing the whole team away from the original objectives.

Things you don’t want to miss

Many ERP implementation projects take longer to finish and cost more than originally planned. In general, the larger the scale and scope, the longer the overrun. The common culprits are:

  • During the planning stage, the time required in every stage tends to be underestimated. Factors like team members’ turnover and vacation plans, user meeting schedule conflicts, operational commitments such as month-end closing and financial year-end closing, availability of staff in the user requirement gathering and acceptance tests are often left out. Since ERP projects involve multiple departments, the coordination effort required is more intense.
  • At the execution stage, everyone should be made aware of the project scope and it is important to tightly control it.  Any scope creep will affect the timeline and resources requirement.
  • It is common for delayed decisions, particularly on business requirements execution or system process configuration. These are often not technical decisions, but rather a business call. For example, when implementing the purchase order approval process, it may take weeks for the operation department and finance department to agree. This is sometimes more deadly than scope creep and drags the progress of the entire project. The project manager must bring the decision makers to the table and sort out issues that may become roadblocks.
  • When it is time for a user acceptance test, a lot of things could go wrong.  Test scripts or test cases preparation is sometimes non-existent. This is critical and detrimental to the project. Even if the test cases exist, their quality also affects the results greatly. In general, end users have no experience in writing proper test cases.  Education and training from the IT project members to help end users is crucial. Testing facilities with sufficient hardware and workspace for users and software developers to sit together to conduct the testing must be provided. The use of collaboration tools for reporting and tracking issues will sometimes make or break the project.
  • At the final stage, it takes a concerted effort to succeed. Issues relating to data migration, user credential setup, system stoppage arrangement, user training sessions, system implementation communication and coordination with affected parties are all important. If not properly planned or executed, they could cripple the project at the last stage.

Make mission impossible possible

Many project managers regard implementing an on-time and on-budget large-scale ERP project a mission impossible. But there is a good chance to succeed if it is planned ahead with contingency, executed with tight control and given plenty of cushion in the timeline.

Sidney Hui is the assistant general manager, Group IT of HKR International. He leads the group IT function to support the company’s business growth in property development, hospitality (hotel, spa, golf club, marina club, recreation club, restaurant), city management, estate management, transportation and health care.