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ERP Systems: At Wit's End

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“I am not afraid of death; I just don't want to be there when it happens.” – Woody Allen …

“I am not afraid of death; I just don't want to be there when it happens.” – Woody Allen

Doesn't the same hold true for IT failures? We've all read about failed IT projects, and working in the IT services industry, it is nearly impossible to avoid first-hand experience with one–with ERP projects having the distinction of a well-established legacy of failure.

We all know that failed ERP project are rarely caused solely by the ERP vendor or systems integrator, yet this is unfortunately not always accurately portrayed in the negative press and sentiment that follows. If there was a way , would that not be of value to you and your organization?

Our latest eBook, At Wit’s End, reviews some recent ERP failures and sheds light into their root causes while providing guidance and best practices that can help you to prevent these failures, or be the hero to a failure in progress, so you can “not be there when it happens.”

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  • 1. MUSINGS ON THE UNTIMELY DEMISE OF ERP SYSTEMS AND THEIR OWNERS
  • 2. Death has inspired many interesting musings,from the morbid to the profound. This collectionintends to shed some light, and perhaps somehumor, on the never-ending stream of failed ERPprojects and the owners that are buried with them.But we don’t believe misery deserves company.So we’ve included some insight into helping youstay out of the Grim Reaper’s long, cold reach.Enjoy.
  • 3. In 2011, U.K. officials pulled the plug on whatwas considered to be the largest public ITproject of all time, an attempt to provide electronichealth records for all of the countrys citizens.The sprawling effort began in 2002, but failedto produce a workable system, despite massivespending outlays for an estimated £12 B($18.7 B US). The U.K.s Major ProjectsAuthority concluded the project was "not fitto provide the modern IT services that theNHS needs.”
  • 4. PerformanceEstablishing a governance process that includesmeasuring the delivered product along projecttimelines will control outcomes, especially whencomplex integration is involved. Measurement ofvendors and integrators prior to RFP awardsthrough the use of objective assessmentsestablishes a clear and fair view of vendorsperformance record. Industry bodies such as theConsortium of IT Software Quality (CISQ) providemeasurement guidance and standards to gainvisibility early in client / vendor relationships.Leverage CISQ guidance by embedding standardsoftware measures as part of vendor SLAs.“Poor structural quality creates enormous waste inthe form of rework—30% to 50% of the effort in mostorganizations.” Using Software Measurement in SLAs
  • 5. Waste Management sued SAP for fraud overan allegedly failed ERP implementation, whichit dubbed "a complete and utter failure." Thetrash-disposal conglomerate claimed it sufferedsignificant damages, including more than $100million it spent on the project. SAP claimedWaste Management didnt "timely andaccurately define its business requirements"nor provide "sufficient, knowledgeable,decision-empowered users and managers"to work on the project. Waste Managementreceived "a one-time cash payment" accordingto a filing it made with the U.S. Securities &Exchange Commission.That’s whatlawyers look like.
  • 6. The impact of failed projects ripple well beyondthe users who must wait for new features orupgrades. Establishing a technical baseline—aquantitative assessment of the existing reliability,quality, performance, and security measures ofthe system—creates an objective view of keysystem parameters and forms the foundation forearly detection of critical failures, applicationhealth monitoring, and development of teamperformance. Not to mention strengthening yourcase if failures ripple into court!"Customers are upping the ante on the providers and pushing the envelope on benchmarking suppliers… they want to see where they stand in areas of innovation, agility, standardization and quality.”– How Benchmarking Can Improve IT Outsourcing Deals, CIO Magazine―
  • 7. Marin County, CA sued Deloitte Consulting andSAP claiming they had "engaged in a pattern ofracketeering activity" aimed at bilking the countyof more than $20 million in connection with afailed ERP project.Marin County said that SAP enticed it into joininga "Ramp-Up" early adopter program for thesoftware suite, a move it claims ended upcontributing to the projects failure since thesoftware was new and risky. SAP and Deloittehave both denied any culpability.
  • 8. A way to cure failing ERP projects is to regularly measureand benchmark productivity against industry standards,like CISQ Software Characteristics. The most severeviolations causing operational problems (such as outagesand security breaches) reside in interactions amongdifferent application layers. CISQ measures include rulesfor detecting architectural and other multi-layer, multi-language violations.SLAs should require that quality analyses be conducted onthe entire as-built, multi-layer application rather than onjust its individual components.―
  • 9. Nurses suffered through months of faultypaychecks due to problems with an SAP systemproject led by IBM. According to consultant JarretPazahanick, “Most SAP payroll project failureshave the same characteristics. The commonthread is junior consultants and weak testing.”ERP vendors are only one step in a broaderecosystem that includes the customers and thesystem integrators.” said ERP expert MichaelKrigsman, “Ultimately solving the problemrequires coordination among these threegroups, but certainly the ERP vendorsshould take strong leadership.”
  • 10. Large ERP vendors create entire ecosystems,so it can be challenging to know who to trust.Even well established SI’s are behind someof the largest ERP failures in history. As anoutsider, your vendor and project managementpractices must be top notch to survive.• Drive vendors through measurablequality objectives• Establish reward/penalty systemsbased on SLA compliance• Partner with vendors to obtain higherquality at lesser cost• Reduce production outages with automatedrisk assessments upon deliveryCreate healthier vendor relationships: Read “8 Steps to Measure ADM Vendor Deliverables.”
  • 11. Mitigating risk under these circumstancesis only possible when measurement isautomated and embedded as an early warningsystem to identify risks as they are created.ERP projects may go live and appear healthyon the surface, yet vulnerabilities which leadto business disruptions, loss of revenue, andcustomer satisfaction may lie dormant.Measuring performance, security, and stabilitybefore going live are critical success factors.
  • 12. LEARN ABOUT ANERP ASSESSMENTREQUEST A DEMONSTRATIONBy measuring the product itself, CAST analysisensures more stable, better performing ERPsystems that cost less to upgrade. Developing adeep understanding of your ERP system and itsinteraction with your legacy environment, CASTobjectively assesses the soundness of the systemwhile detecting vulnerabilities that are undetectableby functional testing or ERP code checkers.Weve studied this carefully in a number of ourcustomer environments and have developed areliable way to quickly find the architecturalvulnerabilities that remain hidden yet have seriousconsequences such as security leaks andperformance issues.
  • 13. CAST is a pioneer and world leader in Software Analysis and Measurement, with uniquetechnology resulting from more than $100 million in R&D investment. CAST introduces fact-based transparency into application development and sourcing to transform it into amanagement discipline. More than 250 companies across all industry sectors and geographiesrely on CAST to prevent business disruption while reducing hard IT costs.CAST is an integral part of software delivery and maintenance at the worlds leading IT serviceproviders such as IBM and Capgemini. Founded in 1990, CAST is listed on NYSE-Euronext(Euronext: CAS) and serves IT intensive enterprises worldwide with a network of offices inNorth America, Europe and India.For more information, visit www.castsoftware.com.