This blog post is the first in a series on Troubled ERP Implementations. Follow us on LinkedIn to get notified of new posts.

You have probably heard the shocking statistic that over 70% of ERP system implementations fail. The reality is that 20% of these projects never get completed, and nearly half are over budget by at least 100%.

This statistic might be shocking to anyone who has not undertaken an ERP implementation for an enterprise of any significant size. However, if you define success as on-time, on-budget, and including the originally anticipated scope, it is surprising to me that the number isn’t higher. It is quite difficult to accurately estimate an ERP implementation, and even more difficult to successfully manage the scope of the implementation. As someone who has been involved in many large ERP implementations, it is no wonder to me that so many implementations are in trouble.

My intention for this series of articles is to provide a rescue guide to those who are involved in a troubled ERP implementation. If that is you, the first thing I want you to know is that your situation is more common than those who are experiencing success. The second thing I want you to know is that there are proven, tangible steps you can take to pull your implementation out of the ditch. This article will provide an overview of the 5 steps needed to rescue a troubled ERP implementation. Stay tuned for future posts in this series. I will be diving deeper into each step, equipping you with valuable insights on how to rescue your stalled implementation.

5 Steps to Rescuing a Troubled ERP Implementation

Step 1 – Stop

I am surprised how many times I have come into a troubled implementation that is significantly behind, over budget, and off track, yet the leadership doesn’t believe we should stop current activities on the project. The current activities are clearly not working, and they are obviously costing money. Every hour spent continuing in the same manner is likely a wasted hour.

And what is the upside to continuing? It certainly will not increase the probability of completing the project on time. There is no momentum left to “keep up,” and keeping the foot on the gas will only frustrate project participants and stakeholders.

These stalled projects remind me of a story from many years ago. A young man had been drinking and foolishly decided to make the drive home even though he was inebriated and there was a snowstorm. He summoned every ounce of concentration and focused on his speed. He knew if he drove too slowly it could draw attention to him, and driving too fast could get him in trouble as well. He kept a close eye on his speedometer and kept it dialed into 45 mph.

Suddenly there came a knock on his window. He looked out to find an officer from the Sheriff’s department standing there. Confused, he looked back at his speedometer, which still displayed 45 mph.

At some point along the way, he’d unwittingly driven into the ditch and come to a complete stop without even knowing it, since he was only focused on the speedometer and not his real progress.

When people involved with these stalled ERP implementations are hesitant to conduct a “Stop order” on the project, I always think of this story. The project is already in the ditch; at this point they’re just spinning their wheels, burning rubber and fuel. So just Stop! There is no point in wasting time and resources on a stalled project. Once you determine the most effective way to continue, then you can pick up the project again.

Step 2 – Assess

Once the project activities have halted, utilize your project team to assess the situation and prepare to execute differently.

There are two main areas of assessment that are necessary: Current State and Root Causes. Your project team plays a critical role in gathering information and providing insight into the state of the troubled implementation to get to the bottom of what went wrong. Their unique perspective and experience with the project will be integral in both assessing as well as preparing to execute differently in the future.

After assessing the current state of the project and identifying the issues and root causes, it’s important to come to a decision: Move Forward or Cancel the Project. This decision is essential because not every project is worth rescuing. To discern whether your project is worth rescuing, you must ask yourself these questions:

• Is the current state of the project so far from success that the effort and cost needed to complete the implementation will eliminate all ROI or other benefits? If so, it would be better to cancel the project than to keep digging yourself into a deeper hole.
• Are the root causes or issues so large that you need to focus on those for an extended period of time and pick up the implementation as a new project in the future? Some issues must be resolved before an implementation can be successful.

If the answer to both questions is “no” your project is probably worth rescuing.

Assessing the Current State

In a troubled implementation, many people will want to start by asking, “What went wrong?” It is my experience that you cannot determine what went wrong without a clear picture of the current state of the project. It is also my experience that the team’s understanding of the current state of the project is based on unreliable information and is likely wrong. Some of the information may be correct, but it is difficult to determine what information to rely on.

The solution is to undertake assessment activities to establish reliable information concerning the state of the implementation. The key here is to “trust but verify.” Ask for the information, then validate the information.

What information do you need to acquire? I will provide a short list here and dive deeper into each of these in a future article.

• All preparatory documentation, including:
  • Charter: Is the project still aligned with the initial charter, or have there been deviations?
  • RACI (Responsible, Accountable, Consulted, and Informed) matrix: Are the agreed-upon accountabilities being followed?
  • Risk list: Is it up to date, and have any mitigation plans been executed?
  • Project Plan: Is it current, complete, and being adhered to? What is the history of estimation versus actual results?
• Data Migration plan: Has it been followed, and is it functioning as intended?
• Environment Management Plan: Has it been followed, and is it effective?
• Outstanding issues: Is there a list of outstanding issues with their respective responsibilities?
• Completed issues: Try to obtain a list of all issues that have been addressed and their outcomes. It is important to verify that the reported issues have indeed been addressed.
• Remaining work items or backlog: What work items have already been identified as needing to be accomplished? Verify that the list has been approved by stakeholders and decision makers.
• Process Designs: Are the in-scope processes defined and documented? The primary focus of an ERP implementation should be to enable the efficient execution of business processes. If the processes are not defined and documented, you cannot successfully implement them.
• Training plan: Is there a predetermined plan of how the users will be trained? Is the plan documented and has it been followed?
• Standard Operating Procedures: Are there any written SOPs? Depending on the stage of the project, there should be written SOPs. If the project has reached the point of User Acceptance Testing, there should be written SOPs and a defined process for maintaining them.
• Test plan: Is there a predetermined plan of how the implementation will be tested? Is the plan documented and has it been followed?
• Test scenarios: Unless the project is very early in execution, you should expect to see a significant list of test scenarios.
• Test results: If there has been any testing conducted on the project, you will need to know how much testing has occurred and what is the failure rate.
• Outstanding bugs: If there has been any testing conducted on the project, you will need to know how many bugs still need to be resolved.
• Completed bugs: It is crucial to verify that the reported bugs have been adequately addressed and successfully tested. You will also want to determine the quality of the implementation based on the number of bugs logged for the amount of testing that has been conducted.

Assessing the Root Causes and Issues

Once you have reviewed the current state of the project, you can begin to identify what went wrong. Be careful not to fixate on the symptoms but work to get to the root causes. For example, missing project milestones is a symptom, not a root cause. If you miss milestones, there must be an underlying reason for it, such as poor estimating, competing priorities, skills gaps, etc.

Make sure all project participants and stakeholders get a chance to weigh in at some level. Not everyone will be able to be involved in every discussion, but all relevant participants should have an opportunity to provide their perspective. Be forewarned, however: you won’t be able to get everyone to agree on the issues, much less the root causes. You need to simply listen to them and then make your determination based on their experience and the information gathered in the assessment.

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Step 3 – Prepare

Armed with a comprehensive understanding of the current state of the project and a clear grasp of the underlying root causes, you can now prepare to execute the implementation differently. As I will discuss in a future article, most root causes of troubled ERP implementations boil down to one underlying factor: poor preparation. Conversely, the solution for a successful ERP implementation requires proper preparation.

Briefly, here are the steps needed to ensure proper preparation and a successful ERP implementation:

1. Create a plan to address the issues.

You have all the relevant information. You know the root causes that led to a stalled implementation. Now, you can work with your team to address the issues that already exist and create a plan to address the root causes to operate differently and more effectively. Ensure you have a risk and a mitigation plan that correspond to each root cause or issue.

2. Replan the remaining work.

Take an honest evaluation of what work remains, who is to be responsible for it, and set milestones for completion. Be careful not to be overly optimistic when establishing a new timeline. It’s always better to create a conservative plan than to continuously reschedule deadlines.

3. Complete any missing preparatory documentation.

Ensure you have all the documentation listed above, including the charter, RACI matrix, risk list, and project plan.

4. Update any outdated or inaccurate preparatory documentation.

Even if something is documented doesn’t mean it is accurate or relevant. Make sure all documentation is updated with all current information and requirements to ensure everyone is on the same page.

5. Conduct a new kick-off.

Transparency and integrity play crucial roles in bolstering team morale and unifying the entire group. Sugarcoating the situation doesn’t do anybody any favors. Don’t be afraid to acknowledge past challenges and shortcomings. Openly discuss the issues and their underlying causes at a high level to build confidence and affirm that the leadership understands what happened and what went wrong. Finally, present your new plan that explicitly addresses these concerns, outlining how it will proactively address the issues to prevent the recurrence of past failures.

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Step 4 – Execute (Differently)

Now that your team is aligned, properly equipped and ready, it’s time to execute the new project plan.

It’s imperative to prioritize risk management throughout the project by closely following the risk and mitigation plans created in the previous step. Diligently focus on maintaining a disciplined approach. Don’t allow these risks to derail your disciplined approach.

Hold yourself and your team to a high standard of behavior. It’s not enough to simply change the project plan; you must also change any toxic behaviors that impede the collaboration and efficacy of the project team. Maintain open communication with your team to identify indicators of risky behaviors that may creep in. Use those indicators to execute mitigation plans to address that behavior before it infiltrates the entire project.

Step 5 – Celebrate

You don’t have to wait until the end to celebrate. In fact, you shouldn’t wait! People are motivated by celebration, which is extremely important especially coming off a troubled execution where frustration is high and motivation is low. Take advantage of any and every opportunity to celebrate. Celebrate getting started again. Celebrate milestones. Celebrate accomplishments and teamwork. Celebrate positive attitudes and helpful behaviors.

Get Your ERP Implementation Back on Course

If your ERP implementation has been 80% done for 50% of the time, it’s time for a change. Quit wasting time and resources spinning your wheels on a stalled implementation. Stop all activities, assess the current situation, and build a plan to address the root issues that landed the implementation in the ditch. Enable your team to execute on the new plan and prioritize celebrating to keep up morale.

I hope this blog post has given you some actionable steps to take to get your implementation back on track. I hope it has also provided some encouragement. Rescuing a troubled implementation is not impossible, but it will take a disciplined approach, strong leadership, and a proven plan.

Find me on LinkedIn so you don’t miss the rest of this series on Troubled ERP Implementations. I will be diving into each of these five steps in more detail so you will know exactly how to rescue your project, as well as understand the root causes of troubled ERP implementations and how to prevent them in the future.

You can read the next post in this series here.

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