erp implementation pitfalls 147540

7/27/2019 ERP Implementation Pitfalls 147540

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Is it just me, Joshua, or do all these software programs look the same to you?

Anthony and his IT manager emerged from the meeting room feeling exhausted.This was their third payroll software demo of the day, and the vendors were all start-ing to blur together. It was four months into the RFP process, and they didnt seemany closer to deciding which program was best suited to take care of payroll for theircitys 2,500 employees.

I think we should ask the vendors for more details, Joshua suggested. I can addthose new details to our spreadsheet and we can see how they all compare.

I cant stand the thought of extending this stage of evaluation. We cant go back toscanning endless responses. We need to make a choice. This has already taken upenough of our time, Anthony argued. But its an important decisionthis is going tobe a long-term relationship so weve got to find a vendor we can work with.

$3,000 per Employee for Implementation?

Anthony and Joshua agreed to meet after lunch to plan their next steps. Anthony, afinance manager who liked to save money, pulled his sandwich out from his brief-case and settled down at his computer for another lunch in front of the screen. Hespent the next 20 minutes researching payroll software online. One story made himcringe: An HR software implementation in Collin County, Texas, that was costing$3,000 per employeeand it wasnt finished yet. That had to be a career-limitingmove. But how much should an implementation cost? Did Anthony have enough inhis budget? And how could he avoid having implementation costs spiral out of con-

trol? Anthony made a note to focus more on implementation in his vendor interviews.

Implementation: The Hidden Factor

Then Anthony remembered that his former colleague, Nancy, was doing a payrollsoftware implementation in a neighboring county office. He phoned Nancy and in-quired about her progress.

We learned the hard way that this isnt just a decision about software, Nancy ex-plained. The first vendor we selected was a disaster when it came to implementa-tion. They were very rigid about the new system; they expected us to change ourprocesses to suit the software. I dont need to tell you what making all those processchanges would do to our HR and payroll teams: It would be enormously stressful foreveryone, not to mention time-consuming. We were anticipating some changes, butwe felt backed into a corner. It was their way or the highway or else wed have to

pay extra. The people they sent didnt understand government payroll, and theywerent ready to help our people through the change process. It was a completemismatch. We were able to get out of the contract as we considered this to be a non-performance issue. Then we made meeting the implementation team part of ourrequirements before we looked for a new vendor. It was a tough decision, but it wasabsolutely the right one.

Secrets of Selecting the Right SoftwareSystem

...how could he avoid havingimplementation costs spiral outof control? Anthony makes anote to focus more on imple-mentation in his vendor inter-views.

When implementation goessideways, you can waste alot of time, money and staffenergy.

By: Karen Speirs


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Finding the Right Fit

How could you be sure the same thing wouldnt happen again? Anthony asked.

We asked to meet the vendors implementation teams beforehand. We asked what

their change management process was, and how many of our own internal proc-esses would have to change to get the functionality we wanted out of the system,Nancy explained. We learned that there arent huge differences among the softwaresystems; the difference is in the people their attitudes, their understanding of oursituation, and their willingness to be flexible. The vendor we ultimately chose talkedabout being a long-term partner...and they walked the talk. Sure we had to changesome processes, but only the ones that we all agreed needed updating. It was amuch more collaborative approach. They helped us overcome resistance amongsome of our staff who opposed the process changes and made sure we were com-pletely comfortable when the system was up and running. Im pretty confident thatwell continue to get great service from these people, because they took the time toget to know our business and our people.

So how important is implementation in the whole scheme of things? Anthonyasked.

Its one of those hidden factors, she replied. You dont know how important it isuntil youre in the middle of it. When implementation goes sideways, you can waste alot of time, money, and staff energy. Fortunately, we caught the situation early so thedamage was minimal. But I was really worried when I thought we were stuck withthat first vendor. When implementation goes well, you really appreciate the quality ofthe people involved. My advice is get a sense of the service youll receive from thevendor after the sale is made before you make a decision. And in my experience, itsbest to actually meet the people who do the implementation work. Its an entirelydifferent situation when the implementation people workwith you, rather than theone-way dictatorial style that we experienced with that first vendor.

Hanging up the phone, Anthony underlined his earlier note. Maybe implementationwould be the deciding factor.

Meet the Implementers

Weve got to meet the implementers, Anthony told Joshua at their meeting afterlunch. You wouldnt hire someone after just meeting with the recruiter, would you?This is no different; its all about the people and how they fit with our team. Theyregoing to be leading a pretty important change management process, so we need toget this right.

Anthony and Joshua were already well into the RFP process. They had issued anRFP, collected responses, invited selected vendors for product demos, and createda shortlist. At Anthonys suggestion, Joshua called Nancy for more input about ex-ploring implementation in advance.

My mistake was to go with one of the biggest vendors as our first choice, Nancyexplained. We thought it was the safe thing to do. They had a big team in for thedemo with us, and we thought that meant they had all the bases covered. What wedidnt realize is that the larger companies can be more rigid. Theyre all about follow-ing a set process. The vendor we ended up going with is smaller and we feel that wehave a close relationship with them. We know who answers the phone when we callfor support, and we feel like were a valued customer. So in the end, going with thebig vendor wasnt at all the safe thing to do.

Nancy paused. Maybe what you need are my lessons learned from past implemen-tations. They have saved me, time and again, from spending a lot more than weneeded to. Ill send them over to you.

You wouldnt hire some-one after just meetingwith the recruiter, wouldyou? This is no different;its all about the peopleand the fit with our team.Theyre going to be lead-ing a pretty importantchange managementprocess, so we need to

get this right.


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Buoyed at the prospect of making some progress in their search, Joshua returned tohis office and started phoning the vendors. He was surprised when the first two wereresistant to his request. We dont allocate resources until contracts are signed, oneprotested. We cant guarantee that the people you meet will be on your implemen-tation team, explained another. Our implementation methodology is solid, they

both argued. Youll get the same level of service from whoever is on the implemen-tation team. Joshua recalled Nancys complaints about the rigid approach and lackof flexibility from her original vendor.

He got a better response on his third call: Absolutely, we want you to meet our im-plementation team. We hope to be working with you for a long time, so you shouldmeet our people.

Joshua booked an appointment for the following week. He had a feeling their searchwould be over very soon.

How to Avoid Over-Spending on New Software Implementation

Like businesses, governments are facing increasing pressure in todays changingeconomic climate to do more with less. This includes avoiding over-spending in theimplementation of new software programs.

Some government groups are paying millions of taxpayer dollars on HR/Payroll soft-ware solutions. Collin County, Texas, was reported to have spent $5 million imple-menting a new HR software program for its workforce of just 1,700 employees andthe implementation wasnt even complete (Collin County Observer, February 16,2008).

So is that just the cost of doing business, or should you expect implementation tocost less?

In fact, implementation of your payroll software solution shouldnt be a long, painful,and expensive process. You should consider implementation when you evaluatesoftware payroll programs. Having spent a good deal of time and effort in making

your selection, its critical that you give the same amount of diligence to the imple-mentation project.

Implementation Pitfalls

Heres Nancys list of pitfalls that she worked hard to avoid during an implementationproject to ensure it was fast and cost-effective.

1.) Unclear leadership.It is crucial that there is clearly defined project leadershipon both the client and vendor sides. On the client side, the project lead must besomeone with the authority to make decisions. Clients who bring in outside con-sultants to lead the project on their behalf are often hamstrung by someone whohas taken on a leadership position but lacks insight into how their organizationworks, and lacks the power to make necessary decisions. Without clear leader-ship, you risk improper deployment of team resources and unclear prioritization.

This often means extra time and cost have to be incurred to bring the projectback in line with its original goals.

2.) Unclear goals and timelines. Along with strong leadership, the project teamneeds clear plans and timelines that are worked out in conjunction with thevendor project manager. Regular team meetings are a must to keep prioritiesstraight and to share the knowledge that the team members will be acquiring ona daily basis.

...implementation of yourpayroll software solutionshouldnt be a long, painful

and expensive proc-ess...having spent a gooddeal of time and effort inmaking your selection, itscritical that you give thesame amount of diligence tothe implementation pro-

ject


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3.) Lack of re-evaluation. Once timelines are set, they need to be re-evaluated ona regular basis. Although you may not want to delay the project, extending adeadline may save time, money and frustration in the long run.

4.) Improper or unclear role assignments.Although a person may be excellentin their day-to-day role in the organization, a project is a different scenario. Eve-ryones skills and interests must be assessed to properly allocate resources. Ifthe most qualified resource is a person that lacks buy-in, it can ultimately havea negative impact on the team.

5.) Bad attitudes.It is important for the team leader to carefully monitor the atti-tudes and level of buy-in for the project. Putting in a new software solution ishard work. It requires people to make changes they may not feel are necessaryor important. Some people may actually try to slow down or stop the project. Toavoid this, the team needs to feel ownership of this software implementation.Their concerns need to be heard and considered. They need to be reminded ofthe benefits and the ultimate goal everyone is working towards. You shouldexpect the vendors implementation team to help make this happen.

6.) Lack of upper management involvement.Your organizations leaders needto remain involved. The team may need them as resources as the project pro-gresses for negotiations with the vendor on specification of end results for modi-fications. It is important to keep all levels of the organization in the loop as infor-mation may be required or project dates may change. You certainly dont wantupper management to be shocked by a delay.

7.) Lack of resources.This is the primary cause of delays and errors. The lengthof the project is directly proportional to the number of dedicated resources as-signed to the project. It is difficult to get a new HR/Payroll solution up and run-ning when the resources available are trying to give the project an hour or twoafter completing their regular full-time jobs.

8.) Under-utilizing external resources.Use the resources available from the ven-

dor. Their team has skills and experience that will be beneficial to your team.Although these resources do have a cost attached, you may save time andmoney in the long run by using them. For example, you may have a questionabout how to fix an incorrectly entered piece of data, or have tables and reportsthat have to be customized. By the time your staff have figured out how to cor-rect it themselves, they may have wasted half a days work...and created un-necessary aggravation. Situations like this can be dealt with by your vendor in amatter of minutes. Dont forget, your teams time is worth money, too.

9.) Not enough testing. You can never test too much. It is a mistake to skipproper testing. Along with testing certain components, you must also test inparallel against your existing system (at least two or three complete pay runs).Proper testing gives all parties involved the confidence needed to turn off theold system and work with the new one.

With proper planning, constant re-evaluation, and awareness of what pitfalls toavoid, your HR/Payroll implementation can run smoothly and be a success.

The implementationprocess was about a lotmore than learning to usethe software. They

helped us deal with im-portant people issues

...It is crucial that there isclearly defined project lead-ership on both the client andvendor sides


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Walking out of their meeting the next week, Anthony and Joshua had a lot more pep intheir step than the day before. The members of the implementation team had been famiar with the challenges of a government environment and responded well to specific qu

ries. Most importantly, they showed interest in forming a long-term relationship. If youhave any issues after implementation, Ill be the one taking your calls, the lead guy saWe understand this is an important change management process, and we know how tmake it work.

Speaking with the vendors references reinforced Anthony and Joshuas impressions.The vendor had a number of long-term clients who spoke highly of the implementationprocess and their ongoing support. They helped us overcome resistance among someour staff who really didnt want to change their routines with the new system, explaineone client. The implementation process was about a lot more than learning to use thesoftware. They helped us deal with important people issues that were essential to oursuccess with the new system.

Stopping at his office door, Anthony gave Joshua the thumbs up. Their search was ove

...the vendor weended up going with issmaller and we feelthat we have a closerelationship with them.We know who an-swers the phone whenwe call for support,and we feel like werea valued customer. .

erp implementation pitfalls 147540

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