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30 “Tactical” Mistakes during ERP Implementation

- Abhishek Goyal & Prashant Rohatgi

Abstract:

ERP Implementations are typically well planned using various implementation


frameworks, templates and concepts, however nearly 70-80% of all ERP

implementation programs fail, go-over budget or go live past original


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deadline . This is mainly due to the fact that while tackling strategic issues and

their risk mitigations, program teams often miss out on the tactical nuances of

implementation. Through this paper, we have tried to highlight the Top 30

“Tactical” Mistakes that lead to ERP Implementation failures. The data


presented in this paper is corroborated with 21 experienced ERP Practitioners

at Infosys.

This paper does not cover the mitigation of these mistakes, as mitigation will

vary program to program and can be best formulated by the team on the

ground.

Mar 2010
Contents
1. Introduction ................................................................................................................... 3
2. Approach ....................................................................................................................... 4
3. ERP Implementation Stages .......................................................................................... 6
4. Survey Findings ............................................................................................................. 7
5. Conclusion ................................................................................................................... 13
6. References ................................................................................................................... 13

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1. Introduction
ERP systems are capable of providing rich customer experience, high productivity and significant
returns on investment (ROI) to organizations. However, if not managed & implemented correctly,
they can also cause sleepless nights to stakeholders and can lead to massive organizational
upheaval. Many ERP implementation programs do not see the light at the end of the tunnel due to
several tactical mistakes and oversights made along the way. Even if implementation program
gets completed with agreed scope, it is believed that 41% of ERP implementations fail to
deliver at least half of the stated benefits, around 57% of ERP implementations take longer
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than expected and around 54% of implementation cost exceeds the budget . Thus, it’s
important for managers to understand strategic and tactical plans, success factors and best
practices before launching a new ERP implementation program.

Through this paper, we have tried to highlight the Top 30 “Tactical” Mistakes that lead to ERP
Implementation failures. The data presented in this paper is corroborated with 21 Infosys
ERP Practitioners who have vast experience that they have gathered through multiple ERP
Implementations.

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2. Approach

1. The Authors based on their own Implementation experience (cumulative around 20 years
spanning ~ 10 end-to-end Programs) put together a comprehensive list of Tactical Mistakes
during different stages of ERP Implementation.

2. 21 Infosys practitioners from Manufacturing/Hi-Tech, Energy & Retail Verticals with an


average of 10 years experience each were selected to review the above list using a
Framework where each mistake was evaluated for applicability/relevance on 2 dimensions :

 Dimension 1: High Probability of Occurrence of the Mistake during the Implementation

 Dimension 2: High Adverse Impact due to mistake on the overall Implementation

3. The ratings obtained thereof were analyzed and bucketed as follows :

i. Mistakes which were chosen by more than 50% of the respondents as having high
probability and more than 50% of the respondents as having high impact. These were
called “TROUBLEMAKERS”

ii. Mistakes which were chosen by more than 50% of the respondents as having high
probability and less than 50% of the respondents as having high impact. These were
called “TRIVIAL but FREQUENT”

iii. Mistakes which were chosen by more than 50% of the respondents as having high
impact and less than 50% of the respondents as having high probability. These were
called “CRITICAL but INFREQUENT”

iv. Mistakes which were chosen by less than 50% of the respondents as having high
probability and less than 50% of the respondents as having high impact. These were
called “MARGINAL”

4. The survey results revealed the following :


i. There were 20 mistakes with Low Impact and 10 with High Impact.

ii. There were 12 mistakes with High Probability of Occurrence and 18 with Low Probability
of Occurrence.

iii. There were 5 mistakes of utmost concern (having high impact and high probability)

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Mistakes Low Impact High Impact

TRIVIAL but FREQUENT TROUBLEMAKERS


High Probability
(7 Mistakes) (5 Mistakes)

MARGINAL CRITICAL but INFREQUENT


Low Probability
(13 Mistakes) (5 Mistakes)

Table 2.1: Mistakes represented in Probability-Impact Matrix

5. The subsequent section of this paper elaborates these 30 Tactical Mistakes in relation to the
various stages of the ERP Implementation Program.

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3. ERP Implementation Stages

Typical ERP Implementation Program will comprise of the following stages:

Figure 3.1: Implementation Methodology Framework

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4. Survey Findings
Based on survey done amongst 21 Infosys Program Managers/Project Managers, following are
the findings:

A. Package Selection, Proof of Concept and Business Case


1) Missing Validation of Non-Functional Requirements (NFR) (TROUBLEMAKERS)
Most of the time, large ERP programs are funded by business and thus the key drivers
for ERP selection and implementation emanate from the business imperatives.
Therefore the package selection, proof of concept for the chosen package and the
solution thereof focuses heavily on meeting the business requirements and tends to
miss out on the aspect of ERP solution scalability, integrity and flexibility. This may
lead to ERP not being able to meet the Non-Functional Requirements (NFR) in the
long run, thus leading to issues around System Performance, System Upgrades,
System Integration and System Maintenance.

2) Missing Business Metrics Benchmarks (TRIVIAL but FREQUENT)


Customer Organizations typically do not have good benchmarks and baselines for
various Business metrics like # of Inventory Turnovers, % Quote to Sales Order
conversion. While writing Business case for ERP Implementation, it becomes difficult
to envisage and quantify the Business benefits, thus making the credibility of the
Business case’s perceived benefits like NPV, ROI etc. doubtful.

3) Sub-Optimal Package Evaluation (CRITICAL but INFREQUENT)


There is limited clarity on the goals and objectives the organization would achieve with
package implementation. This shows up during package evaluation stage when there
is a conflict on drivers for package implementation between business and IT. This
leads to lack of comprehensive and well thought through criteria for package
evaluation and selection. This leads to a significant gap in organization requirement
and package solution delivered.

4) Package Bias and Oversell (CRITICAL but INFREQUENT)


Sometimes Implementation Partners may be biased towards one of the competing
packages due to its own internal imperatives to promote a particular package,
irrespective of the customer needs. At other times, they along with the Package
Product vendor oversell the product in their over zealousness to procure the deal.

5) ERP Implementation Efforts Under Estimated (CRITICAL but INFREQUENT)


Implementation Partner and the Customer Program Leads underestimate the costs
and scope for the ERP Implementation. They tend to go very aggressive on the cost in
an attempt to make the Business case metrics attractive and saleable to the Customer
Executives and Sponsors, only to reveal the challenges, incorrect assumptions, and
cost escalations eventually.

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B. Scoping and Planning
6) Customer Side Under Staffing (TROUBLEMAKERS)
While Implementation Partners have mature staffing estimation models for executing
the ERP Implementation, customers often struggle to get their business SME and IT
staffing right. Customer Program Managers are not able to envisage the magnitude of
work and required participation from their teams. To get upfront Organization buy-in
for the ERP Implementation, the Customer Program managers often underestimate
implementation cost and under staff. This leads to bottlenecks at several stages
during the implementation.

7) Estimation Based on Best Scenario (CRITICAL but INFREQUENT)


Due to various cost and business pressures, projected ERP Implementation timelines
and costing assume best case scenario with no obstacles and constraints and do not
take care of any contingencies, scope creep or time lags. This leads to frequent
rescheduling of the Project Plans and revision of implementation budgets leading to
dissatisfaction at the customer organization level. Typically program teams
underestimate the following in the planning stage:
i. Time and effort required for End User Training and Adoption
ii. Time and effort required for Performance testing and engineering
iii. Time and effort required to stabilize new technologies
iv. Time and effort required to involve the B2B Trading Partners
v. Time and effort required to do Conversion data validation by Business teams
vi. Time and effort required to coordinate with Product Vendors

8) Scope Volatility (CRITICAL but INFREQUENT)


ERP Implementation scope remains volatile and open for long time. It is not agreed
upon by the key stakeholders at beginning of the implementation. This leads to
midway changes leading to rippling negative effect on timelines and cost.

9) Capability and Bandwidth Overestimation (MARGINAL)


In a bid to justify their own worth, customer’s IT Program teams often overestimate
their own capability and team bandwidth and thus go miser on vendor (Implementation
Partner) staffing. This leads to sub optimal staffing, program delays and associated
un-necessary tension in the program.

10) Low Priority to Peripheral Tools Deployment (MARGINAL)


Very often, the IT teams focus on the core ERP. However they pay less to no attention
to the procurement, deployment and testing of the peripheral/auxiliary tools (e.g.
testing tools, DBA tools, Job scheduling etc) until the very last stage of the Program.
This leads to overall system and solution instability and associated delays.

11) Underestimation of Enabling Activities and Expenses (MARGINAL)


Implementation Partner team often underestimates the following due to lack of clarity
and experience at the beginning of the program:
i. Visa Lead times for its team

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ii. Staffing Lead times for its team
iii. Time and effort required for bug fixes
iv. Time and effort required for status reporting, team coordination and
communication
v. T&E expenses
vi. Time required for new entrants to onboard and become effective

C. Process Modeling
12) Conflicting Multi Site Requirements (TROUBLEMAKERS)
In case of multi site, multi country ERP implementations, the program team is not
equipped to harmonize business requirements, which suits everyone. There are
multiple mandates for the team like:
i. How to have requirements which can fit within the vanilla ERP suite.
ii. How to have uniform set of requirements for all sites/countries
iii. How to have operationally efficient and best in class processes
Sometimes these mandates lead to conflicting pulls and pressures, leading to delay.

D. Design, Configure & Development and Testing


13) Low Priority to Legacy Data Cleansing (TROUBLEMAKERS)
While the IT teams focus a lot on Data Modeling and Data Mapping, they keep the
Legacy Data Cleansing as a low priority action item and not addressed at appropriate
time. This is due to lack of clarity & importance of data cleansing and lack of
ownership from Business and IT teams. This leads to data quality and consistency
issues post conversion and post go live.

14) Missing “Process Throughput Time” Benchmarks (TROUBLEMAKERS)


Customer Organizations typically do not have benchmarks and baselines for a
process throughput lead time. Thus when they shift from Legacy IT systems to a ERP,
there is often lack of focus and capability to measure the throughput time of the TO BE
process and solution. Business Users often complain that the throughput lead time
has worsened after ERP Implementation, while the Program Teams struggle to
measure and control throughput time, leading to user dissatisfaction.

15) Fringe Business Scenarios Ignored (TRIVIAL but FREQUENT)


While the Program teams focus a lot on the core Business requirements at all stages
of the ERP Implementation, they often tend to ignore the fringe business scenarios.
These outlier conditions are also missed during system testing and user acceptance
testing. Most of the times, these conditions crop up post go live and the new ERP
system is not geared up to handle it.

16) Inadequate Data Usage During Testing (TRIVIAL but FREQUENT)


Often the program teams execute system and user acceptance testing with limited
data. Data is not properly prepared based on business requirements, test scenarios
and test cases planned. During testing, all possible scenarios are not touched upon

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due to missing data and testing is not full proof. This leads to surprises post go live
when different kinds of data sets are deployed and used.

17) Untimely User Responsibility and Menu Mapping (MARGINAL)


User Roles and Responsibility and Menu mapping is not properly executed. At times,
it’s not finalized till the last moment. This leads to access issues and user
dissatisfaction post go live.

18) Lack of focus on Accounting Reconciliation (MARGINAL)


There is lack of focus on end to end accounting reconciliation between sub ledgers
and GL for different transaction types. There are no proper reports & inquiries created
upfront to enable reconciliation. This results in Finance reporting issues and delays
during financial period closures.

19) Inadequate Auxiliary Tools and Applications Testing (MARGINAL)


Often testing of auxiliary tools and Applications like Taxation, Credit Card, Export
Compliance, Reporting, Data warehousing, Job scheduling takes a backseat while
entire focus remains on core package testing.

20) System Administration Aspects Ignored (MARGINAL)


System administration aspects (like system steps, purging and archiving strategy,
workflow planning and definition, etc.) are often ignored during this phase, leading to
non optimal system performance post go live.

21) Lack of Training Leading to Shallow Testing (MARGINAL)


During testing, business users often focus their energy on learning navigation and
form level GUI right, rather than hashing out the business functionality and logic. This
happens due to lack of training before the User testing and leads to shallow testing of
the system and thus there are basic solution level issues which surfaces post go live.

E. Deploy
22) Impractical Contingency Planning (TRIVIAL but FREQUENT)
ERP cutover Contingency (Plan B) Plan is impractical, too theoretical and often slow
to respond. For example, if the contingency plan is to do shipping manually after go
live when ERP warehouse interfaces fail, typically the detailed steps of how to handle
shipping manually are not documented and even if documented, mentioned steps are
not easily implementable. So, if the contingency is really invoked, people struggle to
bring the contingency plan into action in a timely fashion.

23) Tight Timelines for Migration from Legacy (MARGINAL)


During ERP Cut Over window, often the Business Team lay down very stringent and
tight window for migration from Legacy to new ERP (mostly 2 days over the weekend).
During this window the IT teams have to close down the Legacy, conduct Master and
Transaction level conversions and validations, and do Controlled Testing, Open ERP
system access and other controls. In a hurry to meet the business demands of

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minimum downtime, sometimes IT teams overlook or compromise on cutover activities
(like validations & controlled testing) which may lead to bigger issues post go live.

F. Go-Live & Post Support


24) Organizational Change Management(OCM) Backseat (TRIVIAL but FREQUENT)
More often than not, we have seen the Program OCM teams go into oblivion
immediately after go live, assuming that the task of rolling out new ERP is done.
However, they do not realize that the challenge has just started with the end users
actually experiencing the new system. This is the time, where Change Management
and Communication activities need to step up their efforts to facilitate the adoption of
the new system and help overcome negative vibes in the organization. This also leads
to user dissatisfaction and slower adoption of the new system.

25) Not Measuring Business Benefits (TRIVIAL but FREQUENT)


When the Business Case is formulated, return on investment of the ERP and overall
ERP benefit realization plan is put down. However, there is little thought given to task
of measuring the actual business benefits accrued as a result of ERP Implementation.
Operational reporting and metrics to measure the business value delivered are not
properly planned and implemented. Therefore post go live, program team often
struggle to report out the actual benefits vs. the anticipated numbers.

26) Inadequate System Check and Monitoring (TRIVIAL but FREQUENT)


The program IT teams often miss to check how the system is scaling up as days and
weeks pass by after implementation. Interfaces need to be monitored and new
extensions need to be regularly checked for performance and common issue
occurrence. There needs to be set of reports/SQLs to monitor the progress and take
requisite action to maintain system hygiene. Since program IT team is not geared up,
it leads to system performance and other design issues post go-live.

27) Premature Closure of WAR Room Support (MARGINAL)


The IT teams underestimate the stabilization period post go live and tend to pull out
the WAR room support too fast. This can backfire as users take some time to go into
depth of system functionality and will typically start noticing the hidden issues after
weeks of go live. So it should be noted that smooth first week does not mean that the
solution is stable and fully understood.

28) Poor Ticket Management Planning (MARGINAL)


Post Support planning is not adequate. Transition planning, ticket management
process, etc. are not thoroughly planned. This lead to chaos and too much ad-hocism
when the issues start flowing in abandon.

29) Key Staffing Changes too Early (MARGINAL)

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Implementation Partner tends to release the senior folks too fast after implementation
even without proper Project closure and Knowledge Transfer to the Steady state
support team.

30) Inadequate Change Request Management & Governance (MARGINAL)


Proper governance to handle the Change Requests post go live is not established and
this leads to delay in addressing the change requested. Sometimes business critical
changes are not handled in timely manner which leads to system non-performance as
per business needs.

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5. Conclusion
The above 30 mistakes should serve as a checklist for ERP Programs. There may be variation in
probability and impact of these mistakes from program to program. Managers should understand
the occurrence and the impact of these mistakes in their program scenario and according plan
their ERP implementation. They need to give lot of emphasis to tactical mistakes made during
initial planning and scoping as it can have multi fold impact on subsequent phases of
implementation. Also other key stakeholders should be aware of such nuances and need to
collaborate at appropriate times to make the ERP program a success.

6. References
1. Critical Success Factors for ERP Implementations: Market Perspective, ERP deals
website, Feb 2010.
2. 2010 ERP Report, Panorama Consulting Group, 2010.

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About the Authors:

Abhishek Goyal (Abhishek_goyal@infosys.com) is an Industry Principal in the Enterprise


Solutions Group at Infosys Technologies Limited. He has an overall 13 years of experience
post his MBA, which includes 10 years of experience in the Oracle Applications space.
During these 10 years, he worked in Japan, Europe, USA, Australia and India, and has
delivered and managed multiple ERP Programs for the Manufacturing Hi Tech vertical
clients. Prior to Infosys, he has 3 years of Industry experience in the Retail Industry.

Prashant Rohatgi (Prashant_Rohatgi@infosys.com) is a Principal Consultant in the


Enterprise Solutions Group at Infosys Technologies Limited. He has overall 12 years of
experience post his MBA, which includes more than 9 years of experience in the Oracle
Applications space. In this span, he has worked, managed and successfully delivered
multiple end to end Oracle Programs for Retail, Manufacturing and Hi-Tech vertical clients.
Prior to Infosys, he has 2.5 years of domain experience in Manufacturing Industry.

© 2010 Infosys Technologies Limited.

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