ERP Implementation Stalls: Governance and Change Leadership
A global manufacturer is 8 months into an 18-month ERP implementation across 12 countries. The project is 3 months behind schedule and 15% over budget. The steering committee meets monthly but has not made a decision on two critical design gaps: how to handle intercompany transfers and how to manage local tax requirements. The project team is frustrated, and key users from the business are disengaging. The CIO is the executive sponsor but has limited supply chain experience. The supply chain VP is concerned about disruption to operations during peak season. A recent survey shows that only 40% of business users feel prepared for the change. The vendor is pushing to go live with workarounds. What should the program leadership do?
1. What are the key governance issues, and what actions should be taken to address them?
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Key governance issues:
- Decision latency: Steering committee not resolving critical design gaps, causing delays.
- Sponsorship gap: CIO lacks supply chain expertise; supply chain VP not fully engaged.
- Risk of workarounds: Vendor pushing for go-live with workarounds that may increase long-term costs.
Actions:
- Escalate the two design gaps to the steering committee with clear options, trade-offs, and a recommended decision. Set a hard deadline for decision.
- Strengthen sponsorship by engaging the supply chain VP as co-sponsor or active steering committee member, ensuring supply chain representation in decisions.
- Establish a design authority with cross-functional representation to resolve issues quickly within delegated thresholds.
- Assess the workaround proposal: evaluate long-term impact and total cost of ownership; do not accept workarounds without a plan to remediate.
- Improve change readiness: conduct targeted communication and training for business users, address concerns, and set up a feedback loop.
- Re-baseline the plan with realistic timelines, considering peak season constraints, and communicate transparently to stakeholders.
2. How should the program leadership address the change readiness gap?
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The low readiness (40%) indicates insufficient change management. Actions:
- Conduct a stakeholder analysis to identify key influencers and resisters; engage them early.
- Develop a targeted communication plan emphasizing benefits and addressing fears.
- Provide role-based training and hands-on workshops, especially for supply chain users.
- Establish a network of change champions within the business to support peers.
- Use a readiness assessment to track progress and adjust interventions.
- Ensure leaders visibly support the change and model desired behaviors.
- Consider a phased rollout or pilot to build confidence and demonstrate quick wins.
3. What should be done about the vendor's push to go live with workarounds?
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Evaluate workarounds carefully:
- Assess the impact of each workaround on business processes, data integrity, and future upgrades.
- Quantify the cost and risk of workarounds vs. delaying go-live.
- Involve business stakeholders to determine if workarounds are acceptable temporarily.
- If workarounds are accepted, define a clear remediation plan with timeline and ownership.
- Do not let vendor pressure override strategic considerations; the steering committee should make a risk-based decision.
- Communicate the decision and rationale to all stakeholders.