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Microsoft Word - ERP_Implementations_and_Truthiness_20070528

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  • 1. White Paper Enterprise Resource Planning (ERP) and Truthiness: Thirteen Ways to Avoid Nearly Accurate Vendor Statements Helen A. Sims M. Glenn Newkirk Version 1.1 06 June 2007 InfoSENTRY Services, Inc. www.infosentry.com 919.838.8570 Click the printer icon to print a PDF-formatted version of this White Paper. © 2007. InfoSENTRY Services, Inc. All Rights Reserved. Reproduction and distribution without prior written permission from InfoSENTRY Services, Inc. is prohibited.
  • 2. Enterprise Resource Planning (ERP) and Truthiness: 13 Ways to Avoid Nearly Accurate Vendor Statements The word “truthiness” means a preference to state ideas one wants to be true instead of stating the actual facts. In advertising, truthiness is expected. However, in major technology implementations, especially enterprise resource planning (ERP) projects, you need to know the difference between fact and truthiness. The difference will dramatically affect your odds of having a successful project. The American Dialect Society voted the public has become so cynical about “truthiness “as the 2005 Word of the advertising that winning a lawsuit Year. If you missed the definition, it against a firm for false advertising is refers to “the quality of preferring almost impossible. It seems that lawyers concepts or facts one wishes to be true, can argue effectively that, if people are rather than concepts or facts known to skeptical of the advertising, then be true.” In moving his comedy to a truthiness is the norm and not a real state of useful political and social deception. If consumers expect commentary, the word’s creator, truthiness, then they cannot be deceived Stephen Colbert of cable television’s when they get it. Comedy Central, has also given the Our company, InfoSENTRY Services, Information Technology (IT) industry a rarely sees the humor of truthiness in word with major applicability to enterprise-wide information systems information systems development and projects. Our quality assurance (QA) project management. audits and independent verification and A Wharton School of Business validation (IV&V) projects require that marketing professor, Lisa Bolton1, writes we report information that is factual, about a slightly different version of clinical, and specific to a client’s truthiness. She calls it the “truth effect.” technology implementation. In trying to It seems that if half-truths are repeated capture an accurate picture of the state a multitude of times, the effect is that of an enterprise resource planning people who hear these misstatements (ERP) project, a customer relationship start to believe the statements are true. management (CRM) project, or other Bolton indicates that when people reach enterprise-wide technology a point that a statement sounds familiar implementations, we often encounter to them, they believe the statement is the results of truthiness throughout the true. implementation lifecycle. In advertising, we have come to expect Here are 13 ways InfoSENTRY helps truthiness and we live daily with the truth organizations separate facts from effect. Another Wharton marketing truthiness during their technology professor, David Schmittlein,2 writes that projects. 1 “A Million Little Embellishments: Truth and Trust in Advertising and Publishing,” Knowledge @Wharton, February 22, 2006 2 .Ibid. Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 2 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 3. buzz and remember that advertising “statistics” geared to capture you as a client do not guarantee—or even increase the probability--that your business will run more profitably. The increase in profitability or your return on investment for your 1. Beware truthiness embedded new system will depend more on in advertising buzz. Here’s a how well you implement and simple piece of advertising buzz manage your system than on from a vendor: “Customers who which vendor’s system you run our ERP application are X% select. more profitable.” The truthiness here is that although this ERP vendor’s customers may be X% more profitable, the profitability may have nothing to do with implementation of the ERP vendor’s software. More profitable than what? More 2. Explore the truthiness of profitable than firms that do not customer success stories and implement ERPs? More testimonials. Success stories profitable than firms that run a depend on how you define competitor’s ERP? More success. The truthiness profitable than all firms in the definition of success from a world—or just some firms in a vendor might be that after a very particular market category? difficult time the vendor received almost full payment for the According to metrics developed product license and has moved by the Standish Group the effort into maintenance (www.standishgroup.com) in mode. At that point, the vendor’s their Chaos Chronicles, more success will depend more on large enterprise-wide IT you paying recurring implementations fail to achieve maintenance fees and upgrading their goals than meet their goals. to new version releases. In fact, some very large companies that implement ERPs One of InfoSENTRY’s staff have nearly gone bankrupt in the members was on the senior process or have experienced a management team involved in a massively negative impact on Fortune 500 company’s short-term and even long-term implementation of a global profits. We doubt that those enterprise-wide ERP companies have been included implementation. She saw on an in those statistics about “more ERP vendor’s website several profitable” companies using success stories about ERP particular vendors’ software. implementations in US school districts. She called these InfoSENTRY recommends that schools to ask how they you look beyond the advertising managed to be so successful. Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 3 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 4. One Superintendent and his CIO seemed surprised when our staff member said, ”Congratulations on your ERP implementation. I saw your success story on Vendor XYZ’s website. What did you do to be so successful with your ERP?” 3. Take advantage of a vendor’s truthiness statement that “we The Superintendent laughed want to be your partner.” nervously and said,” Well, as Vendors frequently say they Mark Twain might say if he were want to be your partner. We love implementing this ERP, the to hear this statement and so do rumors of our success are much some of the technology law firms exaggerated.” Though the with whom we have worked. success story is still listed on Vendor XYZ’s website, the A true partner in a project must Superintendent and CIO are no share an equal, or at least, longer listed as employees of substantial amount of the that school district. The State project’s risk with you. This risk took over the financial operations should include not only financial of the district because the risk, but should include a risk to financials were in such disarray. their reputations and jobs if the And the vendor has started project fails. Your vendor is your adding a disclaimer in small print actual partner only if they are on all their customer success willing to accept financial and and case study promotion. reputational risks in line with the risk you are bearing as you So remember, while you are undertake such a large project. If defining project success as the vendor is receiving a getting the right information to substantial upfront payment for the right person at the right time their software and services or if at a lower cost, your vendor’s their “standard” contract includes definition of project success may language that places a involve your continuing substantial burden on you to maintenance payments, your provide “adequate” or upgrades to new releases, and “competent” management and their sales to new customers. It staff during the project, your will be a good exercise for you to “partner” has just shifted most of ask all prospective vendors for the project risk to you. A failed their definitions of success while project might mean their project they are still in the courtship manager shifts to another project stage—and to incorporate the while you clear out your desk winning vendor’s definition in the and head for a new place of contract. work. So, InfoSENTRY suggests that if the vendor wants be your partner in the project, you should incorporate in your contract the exact nature of the financial and Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 4 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 5. reputational risk the vendor is project implementations. These willing to absorb during all phrases seem to indicate phases of the project. You might processes of continuous learning find that this definition of and improvement. Best practices “partner” was not the one the indicate that some one has vendor had in mind during their practiced a process or activity sales presentations. The enough to be a master of the vendor’s truthiness definition of practice. Such phrases give the “partnership” is often another appearance of vast experience way of creating a psychological and expertise. connection with you and your project team. It is an excellent One state agency with whom we sales technique and might help talked noted that they had you establish an early project disbanded their implementation teamwork environment. team right after the GO LIVE of However, a truthiness their ERP. When a number of partnership probably provides problems arose after the GO you with little tangible benefit LIVE, all their resources had outside the contract with the returned to their previous vendor. department jobs. The system vendor and the project’s IV&V The vendor’s idea of vendor, a name brand consulting “partnership” is often similar to and research firm, never told the one in the old “Ham and them to keep the team together Egg” café story. Yes, the several months after the GO chicken is a partner in making LIVE, a lesson learned and best the ham and eggs, but the pig practice documented widely in has the real commitment in the Year 2000 ERP relationship. (Oh, by the way, implementations. some vendors must have caught on to the danger in using this If you hear these phrases from language because they have an ERP vendor or integrator, started to place “partner” in particularly during the sales and quotation marks in their “courtship” phase of your project, advertising materials.) ask the vendor to provide you with a set of documentation containing their lessons learned or best practices from previous ERP projects. They should be able to show them to you with minimal effort. If the vendor indicates that the documented 4. Question the truthiness of lessons learned and best your vendors’ claims that they practices are part of their will use “lessons learned” and services, preventing them from “best practices” in your being used unless you have a project. Vendors and integrators contract with them, ask the often speak about their “lessons vendor to at least show you the learned” or understanding of printed volumes that contain “best practices” they gleaned them or give you an overview of from previous ERP or CRM Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 5 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 6. the database in which they store really industry-wide standards or the documents. merely reflections of the vendor’s recommendations built around If vendors truly have a set of what their system can do? Does lessons learned or best practices a best practice the vendor from previous engagements, implemented in a manufacturing they will have a repository for setting have any relevance to those materials. They should be your industry if you are not a willing to provide you with some manufacturer? sample lessons learned from previous projects and a written Maybe it does, but if not, the description of the processes they practice may be the worst one use to collect and document for you to use. One public sector those lessons. An “oral tradition” organization for whom we of lessons learned and best conducted a project status practices is not a very effective assessment initially could not and reliable transmission hire temporary staff when they medium for passing on those first installed an ERP’s human lessons and practices to your resource module. That module team—or to the less simply did not allow handling of experienced, “green” members the types and numbers of of the vendors’ teams who often temporary staff that the show up to start work on the organization relied on heavily for project. various peak-period activities. The vendor had designed the module to handle a very limited number of temporary staff types. So, the organization creatively used the system’s procurement module. They used the same software module and processes 5. Be sure the vendor’s “best to “order” temporary staff practices” apply to your members as they did to order specific organization. When toilet paper and diesel fuel. you hear the phrase “best Then, they made “adjustments” practices” coming from your through journal entry accounts. vendor, it is common to nod Unfortunately, this process did knowingly and accept that not allow convenient entry of the everyone has a common point of resulting “commodity” into a reference about what those category that could report total practices are and what they labor cost for projects. mean for your ERP implementation project. In another situation, a public However, there are many sector organization for whom we questions that require answers organized a project recovery before merely accepting effort required the ability to someone’s understanding of process direct payroll deposits to best practices. What does your five separate financial vendor mean by best practices? institutions, each of which might Are the vendor’s “best practices” accept a currency (with varying Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 6 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 7. exchange rates) different from the US dollar. However, after the organization had signed the contract with the vendor and were two months into a one- year, “fast-track” project, the vendor informed them that their 6. Be skeptical if vendors do not payroll module supported direct tell you about the “real deposits to only two separate success rate” of large IT financial institutions. Of course, implementations in their sales the software supported only a pitches. If a tour leader told single currency for the you that the trip you were taking transactions—or so the vendor had a 70% chance that you informed them after signing the would be maimed, injured, or die contract. on the trip, would you take a few precautions before, during, and The vendors informed the after the trip? You might actually organization that it was a decide not to take the trip or you “standard practice” to limit the would insist that you have number of financial institutions adequate safety precautions in for direct deposit to only two. place before you start the trip. They also suggested that use of a single “standard” currency According to the Standish Group such as the US$, the €, the £, or research, about 70% of these the ¥. enterprise-wide implementations are considered failures or In these or similar situations, seriously impaired would or could your organization implementations. That is the modify long-standing practices or truthiness behind vendors’ contracts with employees in assurances that they are so big order to follow “best practices” and successful that you cannot (or more simply stated, the fail if you just follow them. When vendor’s system limitations)? If we informed one of our clients, not, you should clarify your who called us in for a project vendor’s experience with best status assessment after the practices in your industry group vendor missed several key and experience with meeting deliverable requirements, about your organization’s actual the documented failure rates of requirements before you sign the large projects, one senior contract. If these experiences manager exclaimed “Why didn’t really are “best practices” they our vendor warn us about these should be in documents other kinds of problems?” than those produced solely by your vendor. In fact, if these Most of us think, “Those bad practices really are the “best,” things could never happen to more than one vendor should be us.” However, these ERPs are able to provide them. not easy to implement. Many vendors like Hershey, Corning, Whirlpool, and others have failed their way to success, but not all Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 7 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 8. companies can afford this assurance reviews scheduled at method of implementation. specific project milestones. You can begin to avoid this Some vendors even go so far as truthiness trap by preparing a to refer to project reviews carried project risk out by another division in their assessment/mitigation plan and own company as being a project contingency plan “independent” quality assurance before you sign a contract with reviews. You do not have to let your ERP vendor. Then, keep your imagination run too far both plans active throughout the afield to guess that these project lifecycle. If you do not reviews result in generally have someone in your glowing assessments of the organization with the skills and vendor’s performance. Very few experience to develop such major findings about the plans, you should consider vendor’s shortcomings ensue bringing in an experienced third- from the internal QA reviews. party who has a track record of not only being able to identify In one such mid-project and track risks, but of being able “independent review” conducted to explain and defend those risk by the vendor on its own $30 ratings when they are challenged million ERP implementation, one by the vendor and integrator. of the major review findings was The same applies to developing that the client had provided a project contingency plan in inadequate parking spaces for very early project stages. If you the vendor’s programming staff. use a third party to develop the That project ultimately came in at project risk or project well over $75 million and failed contingency plan, be sure they to deliver major pieces of train one of your project team functionality to the client. The members to keep the plan vendor’s “independent quality current throughout the project’s assurance review” failed to duration. mention the project’s cost overruns, lack of documentation, poorly planned training, scope creep, and non-existent test plan. In reality, ERP vendors often short-circuit quality assurance 7. Investigate the truthiness of and quality control steps or even vendors’ claims that “quality ignore them altogether. We is built in” their products and conducted an external quality services. Vendors’ proposals assurance review of a project often shine with statements that that found a vendor had quality is built into their product delivered an “internal quality and throughout all of their project assurance review” on schedule. management and integration However, our report also found processes. In fact, many that the vendor’s review vendors’ initial project proposals consisted of a senior corporate and workplans have quality consultant coming onsite for one Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 8 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 9. day and writing a three- control mechanisms, even those paragraph report that the project mechanisms that vendors tout in was moving ahead nicely. The their own project implementation cost attached to the vendor’s methodologies. And if you see internal QA review effort was in that you have skipped the QA excess of $35,000 and buried in reviews, be sure to check to a $60 million budget. The project ensure you did not pay for a QA came in one year after the you did not receive. scheduled cutover date with a cost overrun of 75%. That kind of “internal quality assurance review” is known generally as a “jiggling the ice” review. The vendor’s internal reviewer(s) come to town for a 8. Beware of comments from day, just long enough to jiggle your vendors and your own the ice in the cocktails at the organization’s managers that airport lounge before leaving “Failure is not an Option.” We town. have heard this fatal truthiness countless times in organizations, InfoSENTRY has conducted even as the waters in their ERP project QA reviews and forensic projects’ bowl were beginning to audits in which we found that swirl in a familiar rotation. vendors had convinced their clients to delete internal quality There is a general impression assurance reviews and various that optimism is a critical quality control processes component in an ERP altogether. The most commonly implementation. That impression cited reason is that the project is is true to the degree that project running behind schedule and the optimism does not blind the project needs the resources organization’s sense of reality. elsewhere. Those projects Jim Stockdale, who was a typically fall farther and farther prisoner of war during the behind and the costs escalate Vietnam War and endured accordingly. torture for eight years, was asked, “Who did not make it out You can easily correct these of the camps?” Stockdale’s errors by having periodic, response was, “That’s easy. It independent, third-party quality was the optimists….I think they assurance oversight built into died of broken hearts.” 3 your project. In particular, it is worthwhile to have an The key to surviving an ERP experienced third party conduct implementation is combining independent validation of your optimism with a “sober, down to vendor’s quality assurance earth view of those parts of procedures and quality control reality that really matter for processes. You simply cannot assume that your ERP system 3 vendors and integrators employ “How Resilience Works.” Diane L. Coutou, quality assurance and quality Harvard Business Reviews, May 2002. p.3. Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 9 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 10. survival.4” However, research suggests that facing reality can be painful. Oftentimes to cope with the pain “people slip into denial as a coping mechanism.” They push out reality in favor of optimistic tunnel vision. They 9. Pay attention to the terms of often punish the realistic status your contract on a weekly or reports and project risk daily basis, even if your assessments as being too vendor reports that everything negative. is on schedule and on budget in the project. You simply Though the battle cry for these cannot blindly trust that your enterprise-wide implementations project team members and the is a familiar saying, “Failure is vendor will do everything called not an Option,” sober research for in the contract. Trust your indicates that failure is not only vendor and integrator, but verify an option, but frequently a reality what they are doing what you in large ERP implementations. In are expecting. If something goes many situations, it is you—the wrong and you have not client—who creates the problem. monitored and enforced the You are generally more likely to contract requirements, you select a vendor that has an probably have little or ineffective optimistic approach to your recourse. daunting project than you are to select one that provides a You are probably working with balance of challenge and reality big, brand-name vendors and along with their optimism. So, integrators. Their firms have you get optimism during the worked on hundreds of ERP or sales cycle that carries over into CRM projects. Your project team the implementation phase. might have worked on only one or two—or perhaps, none. When It is important that you gauge a the word hits the “street” that vendor’s ability to provide you your project is in trouble, most with accurate news, both good people may believe that you and bad. If a vendor cannot were the ones who were at fault, provide you with challenge and not the big name vendors and reality during the sales phase, integrators. You might not be they are not likely to be able to fired for hiring a big-name provide you with that information vendor or system integrator. during the implementation However, if the project goes phase. awry, you and your organization will probably be the ones who receive most of the blame for the failure. Most likely, you will be the one who has experienced a career-limiting event. Oftentimes, organizations do not 4 want to offend their vendor so Ibid. p.4. they let small things slide like Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 10 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 11. missing weekly reports, delayed delivery of “secondary,” non- critical documentation, or substitution of one or two “green” project team members for team members in the original proposal. Even when those 10. Understand the truthiness organizations have the evidence involved in implementation that their project is off course, vendors saying they are they do not know how to “certified business partners” approach the vendor. You would with your ERP system vendor. be surprised at the number of At first glance, bringing on a organizations whose project “certified” implementation partner managers and staff members of your vendor conveys the idea cannot even locate a copy of the that these are the experts with a project’s key contracts. seal of approval from the main software vendor. They often If your organization’s project times are indeed true experts. manager does not know how to Other times, they are very handle these situations and “green” staff members of a manage both the project and the consulting firm that the ERP contract, you can remedy this software vendor has certified. situation by having an independent firm conduct There are two problems that you periodic contract compliance might face with a certified audits as part of regular project partner. First, InfoSENTRY quality assurance (QA) reviews. directed a project recovery effort That QA will document if the for one client who was very vendor is delivering what is in impressed with the “business the contract and the lead QA partner’s” implementation team reviewer will know the steps to suggested by the software take if your internal project team vendor. However, the team or the vendors are off course. members that hit the ground to carry out the implementation had These are tough conversations never worked on a project using that require someone who has that vendor’s software. They experience cutting through the were very familiar with another truthiness and moving toward vendor’s system. Most of the the contract’s requirements and implementation team members the project’s facts. As President actually had completed a “boot Harry Truman stated when camp” for our client’s ERP someone highly objected to his system the month before they critical remark “No, I am not arrived onsite to carry out the giving you hell. I am giving you implementation. The firm was a the truth and you just think it is “certified partner,” but the actual hell.” team members had no experience on the vendor’s system. Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 11 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 12. Second, there is the issue of customer, you know the phrase allegiance. Suppose you hire “Speed to Market” can provide companies that have you a competitive advantage or partnerships or alliances with save you money. The vendor is your ERP vendor to be your right! They sometimes can get system integrator, manage your the technology into your offices project, or perhaps to conduct very quickly, but what they very your third-party QA reviews. If often cannot do is teach all those the project runs into big new processes and applications problems, where will that third- to your existing staff as quickly party vendor’s loyalty most likely as they can roll out the software lie? Will that certified partner risk and hardware. offending the vendor who helped them get this job and who will be The problem is that most ERP instrumental in finding their next projects require, as Peter jobs? Drucker used to say, the hardest learning of all—unlearning. How To avoid this type of conflict, hire many times have organizations a project manager, an integrator, found that the “fast track” project and an independent quality required staff involvement in assurance consultant whose tasks labeled as “prototype revenue streams are not largely evaluation” or “acceptance under the control of your ERP testing” without those staff system vendor. The truthiness of having received training in using vendor business partnerships, the system? How many alliances, and certification implementations found that after programs is that they create a cutover, their staff still did not pattern of loyalty that is not know how to use the system, necessarily to your advantage. reverting instead to manual procedures and spreadsheets to “do things the old way? How many ERP implementations have foundered on problems associated with an inability to access and use historical data immediately after the cutover to the new system? Unlearning old 11. Beware the truthiness of your habits, adequate training of new system vendor’s fast-track procedures, and completing implementation project comprehensive data conversions approach. Technology projects often do not find their way into and the business managers who fast-track implementations. become involved in them have a need for speed. Vendors use One major corporation found that the selling point that they can get it had to stop using its new ERP you up and running faster than system entirely because its their competition. They also tell employees did not understand you that the sooner you that if they input data incorrectly, implement the new system, the there was no one down the line sooner you can reap the return whose job it was to review and on your investment. As a correct data. The old system had Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 12 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 13. built in a “bad practice” of allowing multiple data edit points downstream before releasing data for general use. The new ERP eliminated those “wasteful” editing steps and made the data available much quicker. Also, the integrator had installed the 12. Avoid the truthiness trap of system with role-base security in thinking that the project is place that actually prevented over when the software is “in” down-the-line correction of faulty and the vendor announces it is data. Because the organization ready to GO LIVE. “It’s not over had relied on flexibility to correct ‘til it’s over” as that noted bad data, everyone had management adviser, Yogi assumed that the same process Berra, reportedly said. Your ERP would apply in the new system. implementation project is not So, the project’s train ran off the over when you GO LIVE. Just fast track. The corporation had to when you think the GO LIVE is halt the implementation and up and running and toasts of require that certain employees success are all around, you go back through training and a might find that many details data quality certification program pushed aside from the fast track before they even had access for come back to haunt you. data entry into the ERP. Several organizations have When a vendor promises a fast found that after the GO LIVE and track for your implementation, “final” cutover the numbers are remember the other important not reporting correctly or the staff adage: Speed Kills. Insist on is not really using the system. In visiting at least two organizations InfoSENTRY’s project forensic that are similar to yours and audits, we have found that have implemented ERP several actual project failures modules similar to yours in occurred after apparently order to study their successful GO LIVE dates implementation process in detail. announced by the vendor. One You need to learn how long the large school district as well as a implementation actually took state government central from the time the project began administration department until the system was running learned that actual payrolls, without any but genuinely supplier reports, and IRS reports negligible data quality issues. coming from their ERP systems contained major errors well after The burden is on you to assure the GO LIVE date. Both that the project is not simply a situations resulted in audits and fast track for moving your money Federal penalties. The state into the vendor’s bank account. subsequently abandoned its new ERP system. The school system required an extensive audit, an extensive re-write for its project plan, a re-structuring of its project staff, and additional Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 13 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 14. funding to complete the project. organization transition from a That district’s state department “project” status to a “program” of education finally took over the status. You will also need to administrative operations of the have your project team catch up school district. with all the documentation tasks that have been delayed during The simplest solution to the “fast the intense implementation track” promise of an artificially efforts. This is one of the lessons early GO LIVE is to insist on the InfoSENTRY has learned in “right track” approach to the numerous QA reviews and project. It is your responsibility to forensic audits of projects that assure that the vendor does not failed. However, we still see cut corners and abandon organizations with plans to standard, documented project disband their project team within management principles solely to a few weeks or even days after meet an arbitrary, early deadline. the vendor has promised a GO You might think you are saving a LIVE celebration. This bit of great deal of money on vendor truthiness can literally consultants by having a system snatch project defeat from the up and running in a year. jaws of victory. However, if it takes three years to recover from the mistakes you made during the rushed project, you probably will spend even more money than originally planned. You might never be able to recover from the damage to your reputation by announcing that you have “gone live” when virtually everyone in your organization knows that the project was never really completed. In the meantime, 13. Remember the other side of your vendor probably received a the vendor’s statement “We substantial “progress payment” are too big to let you fail.” The on the GO LIVE date and might implications in this statement be receiving additional payments from a vendor are that (1) the to correct problems that should firm has vast resources that it will have been resolved before you bring to bear to make your went into live production. project succeed and (2) the firm has experience with many It is important to keep major projects and tremendous components of your project experience to help you implementation team intact for overcome the many obstacles up to six months after the system that often challenge ERP has “gone live.” You will need projects. the team to help assist in solving problems that inevitably occur Those statements might be true. after your GO LIVE. You will also However, the reality too often need that team to help your has been that “We are so big Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 14 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 15. that if your project fails, it will not Your ERP vendor’s size and vast really hurt our track record.” For experience implementing you, it might be one failure in hundreds or thousands of one attempt at implementing an systems might be relatively ERP system. That means your meaningless to your batting average would be .000. implementation. It is your However, if the vendor is really responsibility to see that you large and has thousands of have a skilled in-house project clients, a failure in your project management team. Your probably will affect only the vendor’s overall size, sales second or third digit of the volume, and installed base do vendor’s batting average. We not necessarily provide any have heard vendors in more than assurance that they will apply one instance badmouth their the right resources to your client because of the client’s project. That will be a function of inexperience in implementing your request for proposals and multi-million dollar ERP systems. your contract with the vendor. Such inexperience was hardly unexpected, given that none of the client firms had ever CONCLUSION implemented an ERP system! You probably have seen many of these We also could find no examples of truthiness on ERP vendors’ documentary (or even anecdotal) websites, in their sales brochures, and indications that the vendor had in their proposals. You might have heard told their clients that they needed the examples in their presentations. to hire experienced internal They are all perfectly normal resources before they started the occurrences during the typical ERP project. In fact, we found sales cycle, also called the “courtship” indications that the vendors had phase of the relationship. The truthiness told their clients that they did not does not necessarily stop when you sign need to have experienced the contract with the vendor. The internal staff. Why? You guessed examples in this White Paper have it: the vendors were so large shown how truthiness can easily they had plenty of resources and continue right up through the final would not let the clients fail. system GO LIVE. Unless your contract specifies However, you probably recognize by that the vendor will bring in their now that the burden is on you—the most experienced resources at organization undertaking the project—to your request, you are likely to recognize the truthiness statements. get only the level of experience The burden is on you to probe behind and skill for which the contract the statements and separate the wheat calls. All of that vast wealth of from the chaff of the vendors’ experience and skill might presentations. In general, if the vendor remain on the bench or on is not willing to clarify and place the someone else’s larger project truthiness statements directly into the unless your contract specifies contract, the statements will have more that you get experienced help impact on the likelihood of the vendor when you need it. closing the sale with you than they will on the likelihood of your project’s Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 15 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.
  • 16. success. Remember: if it is not in the were driven by Year 2000 objectives. Her contract, it is not in the contract. involvement with ERPs continued at InfoSENTRY with her work on independent, All of these comments might give you third-party quality performance audits, technology project recoveries, and the impression that all vendors’ technology readiness assessments of statements about their ERP products enterprise-wide implementations. Helen has and services are misleading. You might continued to document successes and get the impression that you cannot trust failures from the early ERP implementations anything the software and to the present ones. In the process, Helen implementation vendors say. That is not has observed a lot of truthiness being used the case. That message is not the throughout the years in projects around the “takeaway” from this White Paper. The world. Helen has a Certificate in Executive more important message is that the Business Management from the Peter F. burden is on you to walk the fine line Drucker Graduate School at Claremont University and is a Certified Practitioner of between your ultimate dependence on the Achieving Styles Institute. Please your system and implementation contact Helen at vendors and your responsibility to helen_sims@infosentry.com . manage the contracts and projects through which you are inextricably tied to those vendors. You must “trust but verify”5 to assure that you are getting the system for which you are paying instead of the truthiness that led to your selection of your system and implementation vendor. Glenn Newkirk is President of InfoSENTRY Services, Inc. He directs the firm’s major IT consulting engagements, particularly those involving recovery of challenged projects, quality assurance reviews of large IT implementation projects, system security planning, and business continuity/disaster recovery projects. Prior to forming InfoSENTRY in 1994, Glenn was Director of Helen Sims is the Legislative Automated Systems Division Vice President of InfoSENTRY Services, for the North Carolina General Assembly Inc, and a certified quality auditor (CQA). and established the National Conference of Helen’s ERP experience began during the State Legislatures’ Legislative Information first waves of ERP implementations that System in Denver, Colorado. He has directed over two dozen project quality assurance reviews, project audits, and 5 project recoveries. He is a Certified Software Here is another bit of truthiness. While many attribute the origin of this quote to the Project Manager (CSPM) and Certified late President Ronald Reagan’s translation Business Continuity Professional (CBCP). of a Russian saying—and it was indeed in a Please email Glenn at Reagan speech—the American quote more glenn_newkirk@infosentry.com. likely originated decades earlier with the © 2007. InfoSENTRY Services, Inc. All Rights American journalist and novelist Damon Reserved. Reproduction and distribution Runyon. But Runyon was never elected without prior written permission from President of the United States. InfoSENTRY Services, Inc. is prohibited. Enterprise Resource Planning (ERP) Implementations and Truthiness: 13 Ways to Avoid Nearly 16 Accurate Vendor Statements. © InfoSENTRY Services, Inc. 2007. All rights reserved.

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