Note : This article was originally published in 2017
It is 2017, and it seems appropriate for companies of all sizes and types to move away from proprietary software systems (legacy systems) to standardized and modern systems in order to streamline business operations and reduce thousands of dollars in costs.
At a strategic level, planning a software migration project may seem exciting if one focuses on the expected benefits. However, a McKinsey study shows that as high as 70 percent of process transformations fail, and there are many reasons to explore such as:
- Poor project planning. This would include setting unrealistic goals for the transformation exercise.
- Not mobilizing enough support for the transformation project, otherwise called “buy-in” from stakeholders
- Poor project execution. It is good to plan, but it takes leadership to actually steer the wheel. Poorly managing the resources of the project is another project execution problem.
- Neglecting the importance of change management, which is the main reason why ERP projects fail. Companies simply find it difficult to break away from routine.
"It has been working fine. Why change?"
Many companies have gotten used to their routines and having to bend away from these routines could very quickly become the pain point. To best illustrate this point, let me use a borrowed example:
Company leaders embarking on a business transformation course are akin to career commercial air pilots thrust into the cockpit of a fighter jet. While commercial planes and fighter jets are still planes, their pilots have different priorities. The former will prioritize safety, stability, and efficiency and therefore lack the tools and pattern-recognition experience to respond appropriately to the demands of combat. Meanwhile, the latter pilots will prioritize agility and quick threat recognition. However, since the commercial plane pilots are sitting behind the control board of the fighter jet, they fail to recognize the different threats and requirements the new situation presents.
Reducing Implementation Failure
To reduce the chances of transformation failures, companies need to start planning ERP implementation projects and any IT transformation in general, with strong considerations for company culture. Companies need to be molded in a way that agile thinking becomes routine. The keywords here are agility and company culture.
As APERIAN GLOBAL clearly puts it: “In order to obtain consistent business results across cultures, your organization and its people need to develop the ability to understand and respond to multiple local contexts “. One could not agree more with this assertion.
In a nutshell, replacing core IT systems could be difficult, especially when the companies have a highly heterogeneous IT infrastructure as well as a complicated product mix. ERP transformations should not simply be considered a software implementation project. ERP transformations also require strong leadership across the business, clear demonstration of the potential business value of such IT projects, and a strong focus on change management. Success in IT projects requires the input of every stakeholder.
References
https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/transitioning-to-standard-software-lessons-from-erp-pioneers http://www.aperianglobal.com/global-erp-implementations-fail-underestimating-impact-culture/ https://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/transitioning-to-standard-software-lessons-from-erp-pioneers
