Risk Mitigation for ERP Implementations

What is ERP risk?
What stands out here is the shear breadth and depth of the scope. Many departments are impacted and the new approach means looking again at the way literally everything is done on a day to day basis.

Because the best systems are so well integrated, it can take only one group of dissenters or one department to
undermine an implementation.

It’s not out of line to say that a business implementing a new ERP is betting that business on the outcome. The cost can be many millions of dollars, and even for a small business, it is no less than several hundred thousands of dollars.

The time can be multiple years if the implementation is spread over phases or multiple businesses, but it rarely takes less than six months. Rushed implementations can result in months of expensive triage.

Often the buyer of a new ERP system is doing so because a prior one either failed or was botched enough that a second attempt is needed. It really is a buyer beware situation. Not surprisingly, savvy buyers look to ways they can mitigate the risk.

Conclusion
My submission is that there is nothing more important in reducing risk than securing client ownership. I suggest that the executives, core team, sub-core team, software vendor and consultants should all obsess on winning early client ownership. It is the most effective way of mitigating risk, with testing coming in second. And it is also highly beneficial for other reasons:

• The solution is far more likely to sustain itself after the consultants leave.
• The client will save on consulting costs.
• The solution is far more likely to accommodate any client uniqueness.
• The client will have a ready pool of internal resources for future phases.
• The consulting company can register another reference account and more quickly move on to the next success-hungry client.