1) In-house expertise
Very often, adopting organizations overestimate their capability on the business processes side and underestimate their need to become stronger on the IT side. Although there are consultants that help enterprises build ERP systems, adopting organizations should not limit themselves to being passive adopters of the technology.
If companies can have or develop their own expertise in areas such as project management, information integration, and other technological aspects during ERP implementation, they will have better control of their ERP initiatives, and thus lower risks. I had a chance to listen to GSK Canada's ERP project leader Diane Connolly describe her experiences in integration, and discovered how these experiences not only helped the business unit achieve its project objectives, but also how they became an asset for ERP implementation across the whole corporation.
2) Financial capability
The investment in an ERP system is usually comprised of two major parts: software licenses and implementation services. When project scope and scale are determined and a software vendor is selected, the license investment is relatively stable, but the implementation part is associated with more uncertainties (consulting fees are more likely to change, compared with license fees). It is not rare to see an ERP project go over the initial budget due to unexpected issues or changes that come up during implementation. As soon as it is realized that things aren't going as planned, the adopting organization needs a strong contingency plan to address the uncertainties.
Another reason that the adopting organization needs financial capability is that the implementation may: 1) require the business to go into a period of downtime; and 2) cause the business to performs below its pre-implementation level for a period of time. These two factors both place additional financial pressure on the organization and should be foreseen and planned for.
3) Independency
On one hand, it is essential for adopting organizations to build strategic partnerships with vendors and consulting services to maximize the output of their ERP investments. But on the other hand, adopting organizations should be aware that there are risks associated with these close relationships with the other two parties.
When an ERP system is established, it is expected to be in service for years, if not longer. Mergers and acquisitions, downsizing, business or release discontinuations, and price and service policy changes that happen on the provider side may all have an impact on ongoing or completed ERP projects. Adopting organizations must develop IT governance policies in order to reduce risks that may arise from selecting a product and service provider. Doing so means the organizations need to pay more attention to major technology trends and maintain a certain degree of independency (or neutrality) from vendors and consulting firms.
Very often, adopting organizations overestimate their capability on the business processes side and underestimate their need to become stronger on the IT side. Although there are consultants that help enterprises build ERP systems, adopting organizations should not limit themselves to being passive adopters of the technology.
If companies can have or develop their own expertise in areas such as project management, information integration, and other technological aspects during ERP implementation, they will have better control of their ERP initiatives, and thus lower risks. I had a chance to listen to GSK Canada's ERP project leader Diane Connolly describe her experiences in integration, and discovered how these experiences not only helped the business unit achieve its project objectives, but also how they became an asset for ERP implementation across the whole corporation.
2) Financial capability
The investment in an ERP system is usually comprised of two major parts: software licenses and implementation services. When project scope and scale are determined and a software vendor is selected, the license investment is relatively stable, but the implementation part is associated with more uncertainties (consulting fees are more likely to change, compared with license fees). It is not rare to see an ERP project go over the initial budget due to unexpected issues or changes that come up during implementation. As soon as it is realized that things aren't going as planned, the adopting organization needs a strong contingency plan to address the uncertainties.
Another reason that the adopting organization needs financial capability is that the implementation may: 1) require the business to go into a period of downtime; and 2) cause the business to performs below its pre-implementation level for a period of time. These two factors both place additional financial pressure on the organization and should be foreseen and planned for.
3) Independency
On one hand, it is essential for adopting organizations to build strategic partnerships with vendors and consulting services to maximize the output of their ERP investments. But on the other hand, adopting organizations should be aware that there are risks associated with these close relationships with the other two parties.
When an ERP system is established, it is expected to be in service for years, if not longer. Mergers and acquisitions, downsizing, business or release discontinuations, and price and service policy changes that happen on the provider side may all have an impact on ongoing or completed ERP projects. Adopting organizations must develop IT governance policies in order to reduce risks that may arise from selecting a product and service provider. Doing so means the organizations need to pay more attention to major technology trends and maintain a certain degree of independency (or neutrality) from vendors and consulting firms.
Tani
Said
Companies should develop their own expertise in areas such as project management, information integration, and other technological aspects during ERP implementation, this will have better control of their ERP initiatives, and thus lower risks.
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