Unfortunately, I’ve heard some epic system implementation failure stories, like this one at FoxMeyer: This $5b company needed a solution that would make complex supply chain decisions and they budgeted a $65m “XYZ company” ERP implementation, expecting $40m savings annually. The project was a disaster that ended in a final charge of over $100m, savings of less than $20m p/a, and the company ended up filing for bankruptcy within a short period of time.
Generally we can summarise most of the issues surrounding system project failures into 5 main categories:
- Lack of business re-engineering
- Skills failure
- Engagement failure
- Scope too large
- Expectations too high
And further analysis gives us these reasons:
- Choosing partners for the wrong reason or choosing wrong partner
- Not changing mindset
- Expecting system to mimic excel solutions
- Wishful thinking
- Thinking it was just an IT project
- Scaling up without interrupting existing systems
- Needing new more capable people prior to change
There are a number of causes for this:
- Too often time is a big factor here and it needn’t be. A good software solution should be able to be assessed relatively quickly because you know what you need and the vendors know what they can provide. If they take too long to formulate a quote you have to assume they don’t really have exactly what you need. Prophit Systems saved the day for one customer recently where we quoted and implemented a solution for their organisation within weeks and gave them an ROI of over 300% within the first year.
- The purchasing team or steering committee needs a high level of technical expertise to understand the product’s deliverables in relation to the organisations needs. If you don’t have the resources for this we offer a Supply Chain Opportunity Assessment whereby we come to you, assess your needs and report on the best solution, all of which is refundable against the purchase of our software.
- You don’t always get what you pay for. A $10m generic ERP system isn’t necessarily better than a $200k tailored product. And you want to ensure you’re going to get a good ROI so the product pays for itself.
- Don’t expect the most expensive option to be the best just because it is an internationally recognised product. It needs to fit the criteria above first and foremost.
Prophit Systems are industry leaders at pinpointing complex supply chain issues and solving them whilst saving you potentially millions of dollars.
If you'd like any further information, please don't hesitate to reach out.
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