Why ERP Implementations Fail: UNBIASED (2 of 6)

When embarking on a Digital Transformation Project, management strives to avoid becoming a headline in the news  due to significant cost overrun or Significant Deficiencies in their first external audit after going live.

In this six-part article series we are exploring the six systemic biases working against a successful ERP Implementation.

In the first article, we covered the topic “Software is often released before it is mature”.  If you missed that article you will want to read it first before proceeding.

To recap…

The Six Biases in ERP Implementations

To achieve a successful ERP implementation, you will need to overcome these six common biases:

1. Software is often released before it is mature
2. System integrators rarely propose a complete ERP implementation
3. System integrators do not understand the complex compliance and cyber security requirements for today’s modern systems
4. Compliance and cyber security requirements are often misunderstood by software engineers
5. SaaS application software providers tend to be greedy with system storage because it affects their margins
6. Auditors are often not trained on the specifics of the ERP system they are auditing.

In this article, I will discuss: “ System integrators rarely propose a complete ERP implementation.”

The Hidden Conflict of Interest in ERP Implementations

If you have been involved in an ERP implementation project in the past: Where did you get a list of companies that could help you implement your project? Many rely on vendor recommended partners, assuming these firms are the best fit. However this process often introduces a conflict of interest  – since many Sis depend on vendors for business, they are unlikely to challenge or contradict the software providers claims.

When thinking about a competitive bid process with more than one software company in consideration, what goes through their mind as a team…?

The ‘conflict of interest’ starts when the prospective customer starts asking the SI about their experience in implementing the software with questions like as the following:

1. Are there any issues with the maturity of A’s software that we need to be aware of?
2. What types of customizations did you have to implement to address the gaps in functionality?
3. Were you around during the audit so you can help us understand what we need to do to pass our regulatory or compliance audits?

In this scenario, do you think the SI is more likely to ‘do what it takes’ to win the deal or be truthful to the prospect with the possibility they will cause the software company to lose the deal.

This is how the greater SI world works…  They make sure they are consistent in messaging with the software company during the bid process.

The Impact on the Quality of the Implementation?

Without the information about the maturity of the software and challenges during the implementation, organizations end up compromising and having a less-than-optimal implementation.

From our perspective, as security and controls experts, some gaps are not solvable. Most ERP systems that are implemented now are SaaS applications, which have limits as to how they can be customized. Often, the desired customizations simply are not options.

If you are interested in learning about more examples of these gaps, we can provide them during a conference call. Feel free to log a ticket with us by emailing support@erpra.net and we will be in touch.

So, how does this tie into our second systemic bias “System integrators rarely propose a complete ERP implementation”.

The primary goal of a system integrator is to implement the “in scope” functionality on time and on budget.  The last thing that a team wants is to be at a higher bid than the other competing organizations.  The easiest way to accomplish this limit is the scope.

How to Avoid an Incomplete ERP Implementation?

Success starts long before the project starts. The system integrator is not the only relationship they need to develop to have a complete implementation.

Management must clearly document their requirements from ALL stakeholders.  As they are developing their procurement processes, and consider that the system integrator they contact will have its strengths and weaknesses.

It is important to note, not one system integrator can provide all the services management needs to implement the ERP system.

So, is it the right approach to go with the large SI’s that have more service lines such as risk advisory practices to address more of these requirements?  Maybe… maybe not. There are certainly pros and cons to having one firm address all the requirements.

One recommendation we have for clients when they are selecting between separate firms is identifying the core system integrators work from the risk advisory services.  Having these two service lines performed by the same firm is like having the fox watch the hen house, but that is for another article.

Final thought: Buyer Beware.

System integrators prioritize winning bids—which often means limiting scope rather than ensuring a complete implementation. Organizations must take proactive steps to ensure they get a fully functional, compliant, and secure ERP system.

Understanding these biases is critical to avoiding costly mistakes and achieving long-term ERP success.

Want to learn more about real-world ERP implementation gaps? Contact us at support@erpra.net to schedule a consultation.