When it comes to implementing your ERP system, you should expect (and plan for) the unexpected. Things are going to happen which will force you to adjust scope, timelines, and capacity, each of which increases cost and potentially erodes value. That being said, your project isn’t completely at the mercy of circumstances beyond your control. On the contrary, your Project Management Office (PMO) exists to prevent your ERP project from becoming an “open checkbook”, and experience has shown that successful PMOs tend to have one thing in common: effective change control.
Commonly known as “scope creep”, the issue isn’t whether you will have to deal with it, but how to set yourself up for success knowing that it’s going to happen. Because in spite of the change control processes, tools, and templates that your SI brings as part of their methodologies, simply having a solid approach is not enough. Execution is key to keeping a tight leash on scope and avoiding the following pitfalls in the first place will help position your project team to manage scope — and by extension, cost — effectively.
Pick the Right Solution/Partner
This may seem obvious but think about implementing your ERP system like building a house. Each ERP effectively presents you with a range of floorplan configurations and options, and your SI is the builder who helps you navigate the myriad of decisions that need to be made as you transform that empty lot into a new home.
The closer you stick to the selected floorplan and standard options (a.k.a. out of the box functionality), the more likely you are to stay on time and within budget. However, if you decide to add an extra bedroom, a home office, or a sunporch to the layout after the process has started, you’ll not only need to hire an architect to make sure the resulting structure is sound, but you’ll incur delays and additional costs to make those changes a reality.
In short, your ERP platform effectively constrains your floorplan, so if you know that you need a home with five bedrooms and 2.5 baths, don’t pick a “four-bedroom ERP system” because it’s ostensibly “less expensive”. If you really need that fifth bedroom, an oversized master bathroom, or a walk-out basement, selecting an ERP platform that inherently offers these features will always be less expensive than trying to customize or extend a “cheaper” ERP platform that doesn’t meet your requirements.
Alternatively, if a “custom home” is truly strategic and provides a competitive advantage, just be prepared to pay for it. Whether you are asking your SI to build a complex enhancement, integrating your ERP platform to a 3rd party package, or leveraging “best-of-breed” SaaS solutions as part of your solution landscape, be sure to bake some additional contingency into the budget. The cost of dis-integrating a pre-built, end-to-end business process and then re-integrating it with an outside/non-standard solution will always be more complicated and costly than what you expect.
Finally, think long and hard before signing up to manage 3rd party relationships (i.e., subcontractors) yourself. Whether you’re engaging a 3rd party to handle data migration, perform testing, or to integrate their solution with your selected ERP platform, if that 3rd party is not managed through your lead SI, then you bear responsibility of holding them accountable for deliverables and schedule. It’s not impossible, but it increases your risk and can end up inflating the total cost.
Strong Product/Process Owners
When users really start to understand what’s included in the new floorplan…or perhaps what’s not…there’s always going to be someone who is going to complain about “not getting their own room.” Someone else will insist upon seven extra outlets in the living room because that’s what they’re used to. Maybe someone else thinks the kitchen island is too small. Or maybe your users don’t like the options for flooring, countertops, or the light fixtures that come “standard”…
This disillusionment is a normal part of the process, which is why change management and the role of product owner is so vital. Your product and process owners have to be champions of the business case, as they weigh the value of keeping everyone happy against the reality that every deviation from “out-of-the-box” or the standard options comes with a cost.
Moreover, the further along you are into the build process, the more expensive it is to make changes, because even the “simplest” changes can have ripple effects which increase the complexity and cost of the end product. Just think about everything that is involved in moving an outlet after the wiring has been done and the drywall is finished!
Thus, your product owners represent your best line of defense against runaway scope creep, assuming that they:
- Have a clear understanding of the vision and business case
- Can articulate that vision to others
- Remember that “perfect” is the enemy of good
- Stay relentlessly focused on delivering the Minimum Viable Product (MVP)
- Are willing to ruffle a few feathers
There will clearly be some changes that are non-negotiable, but product owners who don’t hold the line and learn to say “no” would be like a parent who lets their teenagers redesign the house while it’s being built.
Even with the right platform and a strong team in place, the influx of change requests can quickly outstrip your PMO’s ability to process them. The result is a continually expanding backlog that contains so much “noise” that valid requests start to fall through the cracks. In the best case, you miss the opportunity to enhance the value of the solution; in the worst case, you miss a requirement that needed to be caught in Sprint 2…rather than Sprint 6. And unfortunately, there’s no such thing as “surge capacity” when it comes to your product and process owners.
The problem with change requests is that everything has to flow through a gate that is essentially single file. As such, the best way to attack the problem is to make sure that each request contains appropriate quantitative measures that allow you to move the requests with the highest value and/or impact to the front of the line. For instance:
- What is the additional revenue that this request will generate? How much cost avoidance will it deliver?
- Is this a regulatory/legal compliance issue?
- What is the workaround if this request is not approved?
- How many users will be impacted by this request?
Once again, this may seem like common sense, but far too many ERP projects rely on subjective “High”, “Medium”, “Low” rankings that make it very difficult to spot and assess the most impactful requests. By adding key thresholds and criteria that users have to complete as part of submitting the request, you not only help to weed out ideas that contribute more complexity than value but will also promote a clearer understanding of the shared vision for the project simply by forcing users to critically evaluate their requests. It shifts some of the burden of evaluating the ideas from the product owners and the PMO to the broader team, and thereby helps the change control process to run at peak efficiency.
No Substitute for Discipline
In the “hybrid-agile” world of ERP implementations, the propensity to simply add every idea to the backlog can quickly overwhelm and derail projects by virtue of taking the focus off the MVP. And even if you manage to steer clear of expensive customizations, configuring unnecessary variations of a business process that can and should be standardized adds complexity and cost to your project. That’s why effective change control is so vital to your project’s success. It’s a pain-staking activity that requires discipline and the ability to make tough calls, but companies that are able to keep their organizations collectively focused on the vision and the business case make the process run smoother for everyone.