ERP enabled transformations are incredibly difficult. During these crazy projects, senior executives are bombarded with software salesmen pitching software, system integrators marketing a whole suite of value added services, the IT department arguing they can do the job themselves, and the line of business executives concerned about the ERP horror stories they have read. This is understandable because, for business executives, ERP enabled transformations are a once in a career business proposition.
Feel confident you are moving your organization’s ERP transformation in the right direction by carefully (and in an unbiased manner), conducting a Program Oversight Review.
A well-executed Program Oversight Review will provide:
- Insights into potential program blind spots
- Guidance for appropriate prioritization patterns
- Recommendations for strengthening program execution
When conducting an ERP Program Oversight Review, make sure to answer these five questions:
1. Is the business positioned to extract value from the program? The examination should include inquiries into the business case, executive alignment, process ownership and compliance. Most importantly, the audit should determine if there is an alignment of the business case with the process capabilities required and the scope of the program defined.
2. Is the implementation methodology appropriate? Implementation methodologies should be designed to derive value. Primary components of a solid methodology include business process design, data enrichment and conversion, organizational change management, deployment, and business integration.
3. Is the program management office strong enough? The single biggest challenge of an ERP implementation tends to be the ability to bring all program work streams across the finish line at the same time. This responsibility typically lies on the shoulders of the Program Management Office (PMO). Critical elements of a Program Oversight Review include an audit of control processes, intra-program communication, and reasonable estimates.
4. Is there an appropriate consideration of risk & governance? Often risk management is considered a component of the PMO. From my experience, however, the program internal processes related to the identification and mitigation of both business and program risks should consume 50% of the program manager’s time. When you consider what is typically at stake when an implementation fails, the value of a well-structured risk management process cannot be over-stated.
5. Are we optimizing the use of talent? While superior ERP talent does not guarantee superior results, you can be sure that mediocre talent will secure mediocre results. With 60-80% of the documented cost of an ERP implementation wrapped up in the cost of talent (not to mention nearly 100% of undocumented costs), the Program Oversight Review should incorporate reviews of staffing models, sourcing strategies, and the approaches used to maximize the value of independent consultants, the software provider, system integrators, and internal project teams.
A well-constructed Program Oversight Review, conducted in a non-intrusive manner, will ultimately help move your program to higher levels of execution. In other words, answering the 5 questions above will ensure your ERP implementation does not make that cringe worthy list of transformation horror stories.