I have recently been listening to some of the classic hits from REO Speedwagon. As they once said in their heyday, “you’re under the gun, so you take it on the run.”
I heard this particular song (“Take it on the Run”) while I was writing my recent blog about Revlon’s SAP failure, so I couldn’t help but relate the song to the stream of ERP failures in recent times. Though the song is about a cheating girlfriend, I can also dedicate the song to ERP industry incumbents since they are cheating their clients by fueling ERP failures (presumably unintentionally).
Too many systems integrators are cheating their customers out of time, money, business value, and individual sanity. Consider the various problems that the industry has created for CIOs, project teams, and organizations:
The reasons for these things happen isn’t because bad people are involved – it’s because of money. Economic incentives bias digital transformations in ways that don’t benefit clients. Yet, they are the ones holding the bag when things don’t go as planned. I can only imagine how much the average lifespan of CIOs has been a casualty of the stress caused by many of these transformations.
All this talk of ERP failure is a drag. It’s not fun to talk about – but my most viewed articles are the ones about failure, so people are clearly interested in the topic. The key is to figure out the ways that people are talking about other companies rather than yours when they discuss ERP failures.
Here are a few findings from these recent failures. Please pardon the shameless quotes from REO Speedwagon along the way:
One of the more memorable lines from the chorus of “Take it on the Run” is about denial and a refusal to believe that the cheating is going on. This is perhaps an even bigger problem than the behavior of systems integrators. It’s one thing for implementation failures and pain points to happen, but another thing for project teams to refuse to accept that they are allowing the very things that result in failure. It’s time to own up and believe it.
The more time goes by, it seems that digital transformation failures are increasing. In decades past, you would occasionally hear of an ERP failure here or there, but this pattern seems to be increasing in frequency in recent years. In just the last year alone, we have had the SAP failures at Haribo, Lidl, and Revlon – which are all very large companies. And most recently, we have the Hertz vs. Accenture lawsuit that was publicized just a few weeks ago. Digging into the facts of these failures reveals a series of stories that are hard to believe.
When we help clients determine how to select an SAP, Oracle, or Microsoft Dynamics systems integrator, I am amazed at how hard it is to find a good reference. And when they do, it is often an outdated reference that implemented a legacy version of the software rather than one of the newer flagship products like S/4HANA or Dynamics 365. It is concerning that is becoming easier to find failures than it is to find successful examples.
Hearsay is also a challenge with clients’ internal teams. They may “know a guy” who successfully implemented a certain software product at his company, or perhaps you have team members who once did an ERP implementation that went smoothly. These are different times and digital transformations are much more complex today than they once were, so it is important not to use hearsay or distant examples to internally justify not doing things the right way.
Assuming your software vendor and systems integrator aren’t going to change anytime soon, it’s up to you to take it on the run and do things the right way. They may pressure you into buying extra shelfware that you don’t need or ramping up their consulting team before you need to, but you are in control of your project – not them.
Just as importantly, your customer experience should drive your digital transformation – not the other way around. Systems integrators and their vendors too commonly lead with technology and hope the business will find a way to keep up. This is a recipe for disaster, so don’t do it. Focus on building a strong business blueprint and foundation for your transformation instead.
So how do we avoid ERP failure? There are a number of ways – first and foremost is to take control of your project. Manage it like you would any other big capital investment that could make or break your organization’s future rather than just another IT systems upgrade.
We recently published our lessons from 1,000 ERP implementations, so this is a great place to start. It outlines the top 20 lessons from hundreds of digital transformations over the years. Use this as a starting point to take better ownership of your project and you will be on the path to success.
As always, feel free to contact me with questions or if you would like an informal sounding board along the way. I’m happy to help!