Why is it that two organisations can implement the same piece of software and end up with very different implementation costs? In this blog, we will look at some of the factors that affect project implementation costs. In this example, we’ll focus on a classic on-premise ERP implementation.
Remember, IT projects combine three principal variables: people, processes and technology. Whilst technology has its challenges, the people and process side of the equation typically introduce higher degree of variability and are harder to define. People and processes should (arguably) be within our control. However, unlike technology, people and processes are stewed in the juices of change. Also, we all know that change is hard.
The table below broadly defines the various implementation steps of any classic waterfall implementation approach and considers some of the possible variations:
Of course, all of these steps need to be set against the backdrop of the size, complexity and risk of the implementation. There is a danger that these three pillars can be glossed over; after all what does the word size mean? The key is to systematically chart or quantify impact of size, complexity and risk and avoid simply paying lip service to the terminology.
Simply saying it’s a high risk project doesn’t help the project team, steering committee or end users. However, by breaking down the individual constraints, impacts and variables that are likely to affect the project, then ranking them and developing mitigation strategies, advances a project to different level of maturity.
This systematic approach, if taken to all aspects of the project (not just risks) arms the project team with knowledge and perspective. This in turn helps to guide decision making along the way. All projects encounter unknown or disruptive influences. The fact that they arise is not the problem; it is how the project team responds which makes or breaks a project.
If we look again at the table of steps above, the positive influences follow a theme of discipline, clarity and preparedness. It is these qualities that impact the cost of projects.
Lastly, it takes a special team or organisation that can avoid ‘over-estimating’ its own abilities. Human nature tempts us and can lull even the most experienced into assuming things will be easier than they actually turn out to be. Project managers need to have an optimistic outlook but a pessimistic approach to planning. (Talk about a dual personality!)
Data migration is a classic pitfall. “What’s the problem? Don’t we just export data from one system and import into the other?” If only it were that straight forward. Think of data as a living thing; it evolves, it changes. Names and address change, get misspelt, get partially updated, duplicated, truncated, etc. The single biggest advice for any ERP project , could easily be ‘don’t underestimate the data migration task’. If you over-estimate and come in under, woo hoo! However in my experience that rarely happens.
Whichever technology you choose to implement, there are many factors that influence the cost of an implementation. In my view, it’s worth stepping back and considering the big picture and rationally identifying the key influences which you think are likely to impact your project. You may find that many of them have little to do with the actual software itself.
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Blog written by Chris Pennington, Consultant to PA. The opinions expressed here are the personal opinions of the writer. Content published here does not necessarily represent the views and opinions of Professional Advantage Pty Ltd.
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