September 2, 2010 at 17:30About the reasons for failed ERP deployments
After this post about ERP systems implementation, I decided to write about this as well. A person who personally managed at least two or three projects will never write that way. I met this post once in LJ as a comment. But comment is one thing and posting is a completely different thing. All cases are piled up in one pile.
The approach described in the article can be applied anywhere. To the communications market, to the food market, to the advertising market, and to anything. Many implementations actually pass through such a scheme, but this does not mean that the entire market works under this scheme. Apparently it was written with the aim of "pure parchment" ...
I will try to uncover this issue more fully and accurately.
Yes, it is clear that in Russia, with the successful implementation of ERP systems, things are not the same as in the West. Although, in the Kingdom of Denmark, I am sure that not everything is all right.
Tell me, what is better in our country than with ERP? Maybe with the roads? Maybe with a connection? Or maybe something else? But wherever we go, everywhere the main slogans are “show-offs”, “budget”, “rollback”, “cut”. It is difficult to achieve a decent result when such things play a central role.
There are several fundamental reasons.
We will divide all enterprises into several segments and consider each separately.
There are practically no chances to automate such an enterprise. Nobody needs transparency in such companies and, first of all, the leadership of these companies does not need it. In troubled waters, as you know, it’s much more convenient to “develop” the budget. But the President said - modernization, innovation and nanotechnology, which means it needs to be implemented. How does this happen? I’ll tell you. A tender is being organized that the “right” company wins, of course, it has nothing to do with the management of the enterprise, and, of course, it has not promised anyone a rollback.
Then the implementation project begins. For most company employees, this ERP system is like a dog’s fifth leg. Like a fly annoying, like another bzik leadership. The company is constantly undergoing reorganization. As soon as one ends, another immediately begins. Apparently, in order to completely confuse everyone. Unhappy consultants do not keep pace with the changes that occur in the company. People change, shuffled. Business processes in the company are not that incomprehensible, but they are not there at all. Just not all. And no one wants them to be. Etc. etc.
The manual on the ERP system only remembers when someone else asks about the upgrade. The rollback was received, but no one thought that everything was so complicated. That, it turns out, in order to implement ERP, what discipline, some business processes, and for someone to follow them are needed. Three years later, after three, the project slowly closes, after another rollback was received for this.
Or a case, for example, may go to court. Because one got a rollback, and the second does not understand why there is no result. Yes, and the first has already quit.
Who then will understand the true reasons? They write - this is another failure of implementation.
Personally, I will never take up the automation of a state-owned enterprise.
The chances are also practically zero, and these chances are lower, the larger the company. Such companies already have certain areas of influence. There are top managers, each of whom has his own ambitions, his own people, his own views, etc. And, of course, each of them has its own “right” consultants and its “right” ERP system.
Top management, as a rule, does not go deep into such a project, dealing with matters much more important. Well, I don’t know, there, biting off my piece of the state budget, with the right tenders, is steamed in baths with generals, etc. The management of the “brain of bones” simply does not feel the need for ERP, because there are no problems, margin is in order, there is no need to fight for customers, because there are people in government agencies. Well, since there one of the tops asks, then, well, to hell with you, implement it.
There are usually no kickbacks, but this is not easier. When the tender begins, each top “moves” its system. All systems cannot win, which means that only one wins. What is the reaction from other tops? Right! Just that. What will happen next, tell? Not a single top will tolerate the fact that he, as it were, turned out to be out of business. There, conflict is inevitable, and, as a consequence, sabotage.
The management cannot restrain saboteurs, because they are either close friends or distant relatives of the founder or other management.
Tugs of blankets will begin, squabbles and the project will fail. Another reason to talk about another failure of the project.
onceand it brought me hard to a similar tender. This was the last time I was so wrong. Thank God, the project did not have time to start.
As a rule, enterprises of this magnitude operate in real market competition; they do not sit on state budgets. Although, of course, not without it. But there is, of course, less monopoly. These companies are really interested in good governance, transparency, optimization, in increasing customer loyalty and labor productivity. So, they just need modern business management tools, customer services, chips, etc.
Here, as a rule, the head of the company knows almost every employee, and his power really extends to the wholecompany. These companies are quite mobile, decisions are made more or less quickly. And, most importantly, it is the head of the company who is personally involved in the project to introduce the ERP system. And not just involved, but often personally leads the process.
This is the only business segment where the chances are pretty good. True, subject to certain conditions, which are below.
Also a very sore point. Many companies, which focus on not-so-honest principles, take advantage of the naivety of customers and give them really broken products. And then the process goes as it is written in the post mentioned at the very beginning. But this problem can be solved. I personally at one time attended to this problem and wrote a number of articles on this subject. On a habr here , here , here , and here on the website, for example.
Unfortunately, in the ERP market, the client must also be armed and be theoretically prepared. Also, however, as in any other market. Our country is like that. I, for example, recently gotto mobile internet. I've seen enough ads on the box, where it whistles from the speed of mobile Internet in my ears, even when the box's sound is muted, and here is the result.
Everything is about the same as with ERP systems. Need to be alert. But there is an easy way. Here you are at the stage of choosing a solution and supplier. Meet with a consultant who will manage your project. Would you hire such a person? How many projects did he personally do? What are these companies?
A good consultant is the person you want to hire.
A common problem for all companies is the attitude to the project on the part of the head of the company. As one of the comments correctly pointed out by jye , the head of the company personally manages excavators, tractor drivers and landscapers when it is necessary to ennoble the territory of his office, but he prefers not to get into the ERP system. Very often, accompanying it with the words "I don’t understand anything in computers." Yes, where does the computer? An ERP system is a reflection of a business. Or the company decided to build a new office. Who will lead this process? That implementation of the ERP-system belongs to the same category of tasks.
Something like that.
The approach described in the article can be applied anywhere. To the communications market, to the food market, to the advertising market, and to anything. Many implementations actually pass through such a scheme, but this does not mean that the entire market works under this scheme. Apparently it was written with the aim of "pure parchment" ...
I will try to uncover this issue more fully and accurately.
Yes, it is clear that in Russia, with the successful implementation of ERP systems, things are not the same as in the West. Although, in the Kingdom of Denmark, I am sure that not everything is all right.
Tell me, what is better in our country than with ERP? Maybe with the roads? Maybe with a connection? Or maybe something else? But wherever we go, everywhere the main slogans are “show-offs”, “budget”, “rollback”, “cut”. It is difficult to achieve a decent result when such things play a central role.
There are several fundamental reasons.
- Customers themselves
- Bad ERP systems
- Stupid consultants who themselves still need to be consulted.
Customers themselves
We will divide all enterprises into several segments and consider each separately.
1. All state enterprises. GUPs, MUPs, OAO (which used to be state enterprises, and simply changed the sign), etc.
There are practically no chances to automate such an enterprise. Nobody needs transparency in such companies and, first of all, the leadership of these companies does not need it. In troubled waters, as you know, it’s much more convenient to “develop” the budget. But the President said - modernization, innovation and nanotechnology, which means it needs to be implemented. How does this happen? I’ll tell you. A tender is being organized that the “right” company wins, of course, it has nothing to do with the management of the enterprise, and, of course, it has not promised anyone a rollback.
Then the implementation project begins. For most company employees, this ERP system is like a dog’s fifth leg. Like a fly annoying, like another bzik leadership. The company is constantly undergoing reorganization. As soon as one ends, another immediately begins. Apparently, in order to completely confuse everyone. Unhappy consultants do not keep pace with the changes that occur in the company. People change, shuffled. Business processes in the company are not that incomprehensible, but they are not there at all. Just not all. And no one wants them to be. Etc. etc.
The manual on the ERP system only remembers when someone else asks about the upgrade. The rollback was received, but no one thought that everything was so complicated. That, it turns out, in order to implement ERP, what discipline, some business processes, and for someone to follow them are needed. Three years later, after three, the project slowly closes, after another rollback was received for this.
Or a case, for example, may go to court. Because one got a rollback, and the second does not understand why there is no result. Yes, and the first has already quit.
Who then will understand the true reasons? They write - this is another failure of implementation.
Personally, I will never take up the automation of a state-owned enterprise.
2. All private enterprises with numbers above 300-500 people.
The chances are also practically zero, and these chances are lower, the larger the company. Such companies already have certain areas of influence. There are top managers, each of whom has his own ambitions, his own people, his own views, etc. And, of course, each of them has its own “right” consultants and its “right” ERP system.
Top management, as a rule, does not go deep into such a project, dealing with matters much more important. Well, I don’t know, there, biting off my piece of the state budget, with the right tenders, is steamed in baths with generals, etc. The management of the “brain of bones” simply does not feel the need for ERP, because there are no problems, margin is in order, there is no need to fight for customers, because there are people in government agencies. Well, since there one of the tops asks, then, well, to hell with you, implement it.
There are usually no kickbacks, but this is not easier. When the tender begins, each top “moves” its system. All systems cannot win, which means that only one wins. What is the reaction from other tops? Right! Just that. What will happen next, tell? Not a single top will tolerate the fact that he, as it were, turned out to be out of business. There, conflict is inevitable, and, as a consequence, sabotage.
The management cannot restrain saboteurs, because they are either close friends or distant relatives of the founder or other management.
Tugs of blankets will begin, squabbles and the project will fail. Another reason to talk about another failure of the project.
onceand it brought me hard to a similar tender. This was the last time I was so wrong. Thank God, the project did not have time to start.
3. Private enterprises of less than 300 people.
As a rule, enterprises of this magnitude operate in real market competition; they do not sit on state budgets. Although, of course, not without it. But there is, of course, less monopoly. These companies are really interested in good governance, transparency, optimization, in increasing customer loyalty and labor productivity. So, they just need modern business management tools, customer services, chips, etc.
Here, as a rule, the head of the company knows almost every employee, and his power really extends to the wholecompany. These companies are quite mobile, decisions are made more or less quickly. And, most importantly, it is the head of the company who is personally involved in the project to introduce the ERP system. And not just involved, but often personally leads the process.
This is the only business segment where the chances are pretty good. True, subject to certain conditions, which are below.
Bad ERP systems
Also a very sore point. Many companies, which focus on not-so-honest principles, take advantage of the naivety of customers and give them really broken products. And then the process goes as it is written in the post mentioned at the very beginning. But this problem can be solved. I personally at one time attended to this problem and wrote a number of articles on this subject. On a habr here , here , here , and here on the website, for example.
Unfortunately, in the ERP market, the client must also be armed and be theoretically prepared. Also, however, as in any other market. Our country is like that. I, for example, recently gotto mobile internet. I've seen enough ads on the box, where it whistles from the speed of mobile Internet in my ears, even when the box's sound is muted, and here is the result.
Stupid Consultants
Everything is about the same as with ERP systems. Need to be alert. But there is an easy way. Here you are at the stage of choosing a solution and supplier. Meet with a consultant who will manage your project. Would you hire such a person? How many projects did he personally do? What are these companies?
A good consultant is the person you want to hire.
PS
A common problem for all companies is the attitude to the project on the part of the head of the company. As one of the comments correctly pointed out by jye , the head of the company personally manages excavators, tractor drivers and landscapers when it is necessary to ennoble the territory of his office, but he prefers not to get into the ERP system. Very often, accompanying it with the words "I don’t understand anything in computers." Yes, where does the computer? An ERP system is a reflection of a business. Or the company decided to build a new office. Who will lead this process? That implementation of the ERP-system belongs to the same category of tasks.
Something like that.