Organizations often struggle with costly and delayed ERP implementations when they focus solely on technology, ignore requirements definition, and rush from requirements to development without proper planning. Implementing a project management office (PMO) can help organizations avoid common pitfalls by providing structure, oversight, and governance over project scope, scheduling, resources, communication and reporting. Leveraging a PMO's roles in solution architecture, process improvement, mentoring, knowledge sharing, and facilitation can help ensure ERP implementations are successfully delivered on time and on budget.

1. WhitePaper
A GUIDE TO ERP SUCCESS
B Y R ON A XAM AND D ARREN J EROME
I NTRODUCTION Organizations must broaden their perspective in
order to put their ERP efforts back on a success-
Enterprise resource planning (ERP),
ful path. Too many overlook a critical stage:
client/server applications for managing
New business processes must be established,
accounting, manufacturing, distribution, and
thought through, and implemented before the
human resources, are the de facto backbone
selection, purchase, and deployment of a soft-
of business intelligence. However, while many
ware solution.
organizations consider the introduction or
enhancement of an ERP solution, the signifi-
As more organizations worldwide choose to
cant and well-publicized challenges associat-
build their corporate knowledge base around
ed with ERP implementations often daunt
complex infrastructure solutions, the need to
them. According to Gartner Group, "…for 40
understand how to successfully implement an
percent of enterprises deploying ERP or ERP II
ERP system has become increasingly important.
systems through 2004, the actual time and
money they spend on these implementations
will exceed their original estimates by at least B ARRIERS T O S UCCESS
50 percent (.07 probability). Many enterpris-
Typically, there are three process barriers that
es have suffered spectacular project failures
prevent many ERP implementations from being
due to unplanned or underplanned implemen-
successful. These barriers result in an elongat-
tation projects."1
ed development cycle with poorly defined and
managed requirements and, as a result, poorly
Reliably predicting implementation costs and
defined measures of success. The implementa-
the time required for implementation are two
tion team often is tasked with chasing a series
key outcomes of successfully planning an ERP
initiative. Organizations must be able to accu-
rately predict costs, resources, and require-
ments, and develop a plan of attack both
before the implementation begins and
throughout the project. New business processes
must be established,
While ERP implementation horror stories high-
light serious business consequences and crit- thought through, and
icize leading ERP vendors for botched deploy- implemented before
ments, often the software giants are not to
blame. Companies must realize that ERP sys-
the selection, purchase,
tems are not a stand-alone solution, but and deployment of a
instead an enabling technology to support a
broad corporate change, and the key to a suc-
software solution.
cessful deployment is in the process.
Solutions used:
1
Frey, Ned; Karamouzis, Frances; Phelan, Pat; Zrimsek, Brian. 2001.
Estimating Time and Cost of ERP and ERP II Projects: A 10-Step
Process. Gartner Group Research (online).

2. of fluid requirements, no process for managing
changes to the project scope, and a false belief
that technology alone will prevail. These teams
are, without fail, disappointed with the results.
...there is no evidence anywhere in the history of IT
Specifically, the three most common mistakes of
that software alone will solve a business problem.
ERP implementations are the following:
Focusing on technology: The technology "silver bul-
ect implementation under the assumption that According to Gartner, "The recent success of
let" approach is one sometimes sold by vendors.
their vendors (both the software provider and the the many project offices that addressed the
However, there is no evidence anywhere in the his-
implementer) will have identified and addressed year 2000 problem has proven the project
tory of IT that software alone will solve a business
the problem. Issues arise because all parties do office to be a "best practice" for delivering suc-
problem.
not agree up front on priorities, schedules, escala- cessful projects." Additionally, Gartner notes,
tion procedures, and communication channels. By "…a project office is a shared competency
Ignoring the importance of requirements definition:
the time this comes to the fore, the problems can designed to integrate project management
Organizations too often ignore the need to define
be insurmountable. within an enterprise. A project office can be a
an optimal process and then use the technology as
key resource in establishing an enterprise com-
an enabler for the process. In too many instances,
In addition, management of project scope and petency in project analysis, design, manage-
organizations either try to adopt a process that is
requirements can be a sticking point. Many organ- ment, and review. Given the appropriate gover-
inherent in the ERP solution, even if it does not fit
izations jump into the implementations without nance, it can improve communication, estab-
their business requirements, or they try to shoe-
defining the project in "bite-sized chunks" that can lish an enterprise standard for project manage-
horn their legacy processes into a software pack-
be accomplished in a reasonable period of time. ment and help reduce the disastrous effect of
age that is not designed to support their process-
As schedules drag on and requirements are failed development projects on enterprise
es. In both cases, they suboptimize the capabili-
heaped on the initial phase, the customer loses effectiveness and productivity."2
ties in the technology and don't take advantage of
faith in the initiative and organizational inertia can
the opportunity to streamline their business
take hold. If requirements are managed scrupu- In its basic configuration, the PMO supports
process—the entire point of technology implemen-
lously and reflected in the form of clearly articulat- core project management-related functions
tations.
ed scope elements, the entire project is more like- including scope management, baseline change
ly to succeed, and chances are better for its ulti- management, project scheduling, resource
Jumping from the requirements definition to the
mate adoption and survival. management, cost management, and project
development phase: Pressed to deliver systems
reviews.
against predefined timelines that don't take into
The final barrier lies in visibility at all levels of the
account all of the necessary implementation steps,
organization. Without this, small issues can snow- Some organizations expand PMO processes to
organizations often rush the process, neglecting to
ball into major hurdles—often it isn't what you include additional functions such as risk man-
build both a solid implementation plan and solid
know, but rather it's when you find out. If execu- agement, earned value, and requirements man-
agreement across the organization as to what it will
tives, managers, vendors, and clients all have time- agement. Ultimately, in its most robust state,
take to develop and implement the solution before
ly visibility into project status, looming issues, and the PMO supports portfolio management,
implementing the technology.
resource requirements/constraints on a regular which in addition to the core and/or enhanced
functions, supports selection, prioritization,
L EVERAGING THE P OWER OF THE P ROJECT basis, the entire team is more likely to get ahead
M ANAGEMENT O FFICE F OR ERP of the problem and find a solution without signifi- performance measurement, and ongoing man-
S UCCESS cant impact to the project as a whole. agement of multiple projects and internal
investments. Portfolio management enables
As organizations embark on their ERP initiatives,
But how can an organization ensure that it will companies to align IT and business manage-
many ignore key issues that can easily be
avoid these pitfalls and implement successfully? A ment objectives, one of the key components
addressed through a professional project manage-
project management office (PMO) can be a key suc- missing in previous ERP implementations. In
ment organization. Some of the most critical items
cess factor. A PMO is a central organization with this configuration the PMO supports enterprise
that cannot be overlooked are: the integration of
responsibility for management, oversight, commu- and project requirements, hence the term
client, implementer, and software vendor goals and
nication, and tracking either for a single significant "enterprise PMO."
plans; constant management of the project's
scope; and a method for gaining visibility into proj- project (like an ERP implementation) or for all of
the projects of a department or enterprise. The Figure 1 summarizes the PMO process domain
ect health at all levels of the organization and
PMO can provide the needed structure and disci- showing the progression from core to enter-
throughout the life of the project.
pline, as well as assume an organizational leader- prise management capability.
The first point—integration of client, implementer, ship role to support ERP solution deployment.
and vendor objectives—is essential. Too often,
client organizations abdicate responsibility for proj-
2
Berg, Tom; Light, Matt. 2000. The Project Office: Teams, Processes and Tools. Gartner Group Research (online).

3. management knowledge that is relevant to the Gaining Trust: An issue of trust can arise from
stakeholder. This role also includes developing and using a third-party integrator. Frequently disclosure
implementing (or recommending) project manage- becomes an issue, as not all integrators are willing
ment training. to provide complete information to the customer.
The key to developing and/or gaining trust is to
Facilitator: This role includes working directly with operate with an open book policy, working as a
project teams and conducting project workshops cohesive team rather than two separate compa-
designed to gain project team consensus on key nies.
project parameters such as scope, resource
requirements, project plans, and schedule depend- Define Success: As success is relative to each
encies. organization, it is essential to understand what
constitutes success ahead of time. For example, if
Knowledge Broker: In this role, the PMO ensures an ERP implementation runs over budget, but
that all project-critical management data and infor- encompasses all the functionality desired by the
Figure 1. Project Management Office Processes mation necessary for process implementation and stakeholders, it may be considered a success.
decision-making are available to all stakeholders Additionally, if an ERP system is implemented and
R OLES OF THE PMO
through procedural or technological means. This remains on budget and on schedule but lacks
In complex ERP implementations, the PMO includes the analysis and reporting of project met- some desired functionality, it may not be consid-
assumes a variety of roles depending on the rics including cost/schedule performance metrics ered a success. Only through open and honest
needs of the specific projects and organizations and risk metrics, as well as providing quantitative communication will all parties understand what
being served. Tactically, the PMO can provide and qualitative analyses including variance analy- constitutes an ERP success.
direct support to ERP initiatives in several areas sis, critical path analysis, and trend analysis.
such as scope definition, project plan develop- Deploying a PMO streamlines and facilitates the
ment, resource estimation, detailed scheduling, The relative importance of each role varies based ERP implementation process. Companies who
and performance reporting. Strategically, the on a number of factors including organizational leverage the strength of a PMO can mitigate risk,
PMO can help senior executives manage a portfo- project management maturity and size, complexity minimize costs, and ultimately, expect smoother
lio of projects, including customer and internal ini- of the projects within the portfolio, end-customer implementations. Putting in place solid project
tiatives. requirements, and the type of analysis and metrics management techniques through the use of tech-
used to select, prioritize, monitor, and control proj- nologies such as a PMO can provide the needed
The role of the PMO can be summarized into five ects. structure to successfully guide companies through
core functions: previously murky implementations.
Gartner notes, "Through 2004, information sys-
Project Management Solution Architect: In this tems organizations that establish enterprise stan-
role the PMO assumes a leadership function in dards for project management, including a project
defining the combination of processes, technolo- office with suitable governance, will experience half
gies, and standards required to meet the stra- the major project cost overruns, delays, and cancel-
tegic and tactical project management require- lations of those that fail to do so (0.7 probability)."3
ments of the organization.
D RIVING R ESULTS
Companies who leverage
Process Champion: Very few processes survive, Once a PMO is in place to provide the structured
improve, and add maximum value without active and disciplined processes needed to manage ERP
support. In the role of process champion the implementations, communication and corporate the strength of a PMO can
PMO develops, implements, and continuously culture factors must be considered. The PMO alone
improves project management processes based cannot ensure a successful ERP implementation.
on organizational feedback, management require- These factors include: mitigate risk, minimize
ments, and industry best practices. Implicit in this
role is the need to provide value to project and Staffing/Training: Once a PMO is implemented
costs, and ultimately, expect
senior management stakeholders alike. challenges often arise, as the customer team is
unfamiliar with PMO technology and methodolo-
Mentor and Coach: As mentor and coach, the gies. To successfully leverage PMO technology all smoother implementations.
PMO assumes an active role in promoting knowl- members of the team must understand the disci-
edge, understanding processes, and achieving pline, rigor, and sound processes a PMO can pro-
buy-in from stakeholders across the organization. vide. If a basic understanding is not put in place
The focus of mentoring is on promoting an under- through training, the integrity of the data can be
standing of the relevant PMO processes, but may compromised.
extend to an understanding of general project
3
Berg, Tom; Light, Matt. 2000. The Project Office: Teams, Processes and Tools. Gartner Group Research (online).

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