For your ERP project to succeed, you need strong project management competencies. In fact, according to Panorama...
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Consulting Group’s 2010 ERP Report, strong ERP project management is one of the top 10 factors that differentiate successful ERP projects from those that are troubled or ultimately fail. Whether you have these competencies in-house or bring in outside help, it is critical to have the expertise on your ERP project team to make sure your implementation finishes on time and on budget while delivering the expected business benefits.
Does effective ERP project management only require having a taskmaster who enforces the project schedule? Or does it mean having people learn the ERP software inside and out and position themselves as experts? The answer is yes to both, but that just scratches the surface. Project management is an art and a science, and there are a number of things you can do to help build your company’s competencies in this area.
The project management office: the key to establishing the discipline in your organization
It helps to have a formal project-management function in the organization. Many companies establish a separate project-management office (PMO) to handle their complex IT and ERP initiatives. PMOs are typically responsible for a host of activities, including:
• Managing the implementation project plan, budget, and resources
• Project governance and controls
• Risk management and mitigation
• Executive steering committee updates
• Defining implementation project tools, templates and methodologies
• Managing external resources, contractors and software vendors
• Ensuring that business requirements are addressed
In addition, the PMO is often responsible for managing organizational change management, communication and benefits-realization activities. If your organization already has a PMO, it often makes sense to incorporate the ERP project into the established structure.
How to set up a PMO
If you do not already have a PMO in place, here are the key steps in creating an effective one:
• Establish internal and external resources with relevant background and expertise. Many companies, especially smaller ones with less experienced staff, find it useful to draw on outside expertise to augment their internal capabilities.
• Train team members on the technical aspects of project management, such as PMP certification. A number of courses are available, but it is especially helpful to find one that blends project management with concepts that are unique to complex ERP initiatives.
• Establish project governance with controls, processes and structures clearly defined and established at the start of the project or sooner.
• Institutionalize the PMO. Make sure it is understood and accepted by key project team members through training and performance management.
Understanding the art of ERP project management
Once you’ve grasped these technical aspects, it is important to understand the art of project management. Every project requires strong decision making and a deep, thorough understanding of the project’s impact on the business, neither of which can be addressed with a simple checklist.
Truly effective project managers also consider such “softer” issues as the project’s current impact on daily operations and the long-term effect of the design decisions on business processes. They also compare costs and risks against the benefits of key project decisions, such as the amount of ERP customization that is possible.
People issues get a lot of attention. What is the best way to keep the project team motivated, especially on long-term implementation assignments? How are organizational change management and benefits realization being addressed? What can be done to ensure that executives and stakeholders are engaged and helping to drive key business and project decisions?
These are just a few beginning steps to help establish an internal project management competency, get your PMO in place, and ensure a successful ERP project. All are key success factors in an ERP implementation that delivers the expected benefits.
About the author: Eric Kimberling is president and founder of Panorama Consulting Group, a Denver-based firm that helps companies with ERP software selection, ERP implementation, organizational change management and benefits realization.