Mythology and Process Obsession -- Critical Factors Causing Business System Failure

I.T. mythology and process obsession is the single biggest cause of ERP and other business information non-performance.  The perception that computers are magical and can do everything that people can dream up.  This and process obsession are the single most significant factors causing failure.

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According to Gartner, ERP implementation failure rates exceed 75%. Meanwhile McKinsey estimates that more than 70% of all digital transformations fail. 

   Succeed by engineering against failure In the process I have been through with regard to troubleshooting and turning around dozens of failed and sub-optimal ERP projects I have identified seven “Critical factors causing ERP project failure” and seven “Critical factors for ERP investment success”.  These are not what most people would think – they are repeated at the end of this email.

In considering this discussion it is important to define what is meant by “success” – in my experience this is a system implementation which results in the organisation being more competitive, more profitable, more efficient -- success at a tangible level that is evident to the shareholders in a cash return on investment.  Failure is, per definition, anything that does not achieve these objectives and is best determined via a private, off the record interview with the Chief Executive – most C suite executives are very reluctant to admit failure in public and on-the-record.  

Mythology, hype and tradition – 30%

The first factor causing failure is “mythology, hype and tradition”, this is a huge subject.  The business systems industry is rich in mythology, hype and tradition and light on delivery.  Perhaps the biggest myth is a seemingly deep conviction that the current ways of doing things, that have such a poor track record, will, one day, if executed really well, turn around and produce different results.

What I term “process obsession” is perhaps the single biggest myth around.

In understanding this point, consider the statistics reported above – the ERP failure rater, per Gartner, exceeds 75% -- yet, as a whole the industry persists in endeavouring to get better in the very processes and methods that are delivering the high failure rate.

Let me give an example:

Large vehicle leasing client

Two year project with one of the top four global consultancies and one of the top global ERP’s – no expense spared.  No indication that they were close to going live – deadlines repeatedly missed.

Dedicated in-house team that were increasingly concerned they were no longer relevant to the business.

Dedicated implementer team.

I was brought in to investigate.  In three days, having interviewed all key client personnel, all key implementer personnel and having a detailed walkthrough of the configuration I established that:

1.      A critical strategic requirement had been completely overlooked – this was the defining requirement for the project in the first place.  It required a piece of clever bespoke software which, if correctly designed and implemented, would potentially have voided the requirement for the big brand ERP.  Most of what had been done was irrelevant!

2.      The configuration in the development system was what I call “scrappy”, the master data and validation data lacked structure and did not model the realities of the business in the data.

3.      The team had produced thick files of process documentation, flow charts, workflows, swim lanes, etcetera, all the classic process orientated textbook stuff.

4.      They were nowhere close to running live and no one had any idea how or when they would run live.  They were just doing what they knew to do which was not geared to a successful outcome.

Immediate drastic action was called for.

The above is what I call “process obsession” the obsession with workflow / process at the expense of accurately modelling the strategic essence of the business in the configuration data and master data.

I will touch on these elements more in subsequent articles and, in particular, share how the methods that I advocate and have applied successfully over many years avoid this type of situation.

If you would like further information please reply to this email.

For more information please visit my website

For more about our troubleshooting services please see the troubleshooting and turnaround page

I look forward to being of assistance.

Reference

For ease of reference the full list of factors is as follows:

Factors causing failure The seven factors causing failure are:   1.           Mythology, hype and tradition – 30% 2.           Inappropriate or ineffective executive custody, governance and corporate policy – 19% 3.           Lack of effective strategic alignment and strategic solution architecture – 16% 4.           Lack of Precision Configuration – 14% 5.           Failure to address soft issues, business engagement and change impacts – 12% 6.           Lack of an Engineering Approach – 6% 7.           Technology Issues – sub-optimal or defective software, hardware, network, etc – 3%   The percentages represent the extent to which each of these factors has played a part in the investigations I have undertaken.  It is important to note that the factors with the lower weights are still very important but that if the higher weighted factors fail it does not help to get the lower weighted factors right.   Critical factors for success The seven critical factors for success are:   1.           Effective Executive Custody – 25% 2.           Effective Strategic definition and alignment – the Essence of the business – 22% 3.           Effective engineering solution design and implementation approach – 17% 4.           Effective Precision Configuration – 16% 5.           Effective Business Simulation Laboratory operation (war games) – 12% 6.           Effective business integration, training, change facilitation, process specification – 6% 7.           Reliable technology – 2%   Conclusion From consideration of the above it will be apparent that the real issue is not the ERP product, all the mainstream products are capable of delivering a quality outcome, it is the quality of the implementation and therefore the capabilities of the implementer that are critical.   In the weeks ahead I plan to share the headlines of my thoughts on each of the above and the lessons that I have learned in terms of  how to implement ERP and other business system projects in a manner that ensures a successful outcome.   My offering I offer technology agnostic services in terms of: a. Troubleshooting projects that are in difficulty and providing guidance to turn them around. b. Strategic project leadership services achieving a high level of executive engagement and delivering high quality business relevant outcomes. c. Instruction and training in how to apply these methods.  d. Guidance on “precision configuration” – a very rigorous approach to the detailed content of master data and other validation lists and other elements of the configuration.   This would have prevented the scenario  that I shared above. If you would like further information please reply to this email and we can get on a call to discuss  your requirements.

For more information please visit my website

For more about our troubleshooting services please see the troubleshooting and turnaround page

I look forward to being of assistance.

  Warm regards,

Dr James A Robertson

James A Robertson and Associates

We help clients liberate the full value of their ERP Investment