(and how you can avoid them)
So you’re thinking about changing your computer system. You see all the cool technical capabilities that your competitors are deploying and you feel that you’re stuck on a legacy system that doesn’t meet your current or future needs. You know it is time to make the change but you’ve heard some horror stories from your peers about failed system conversions, budgets that were 2x to 4x the original quote and promises that were not kept.
Statistics suggest that 60% of new system projects fail. However, failure is a subjective term. Failure can be summed up in the following criteria:
1. Didn’t achieve the ROI expected or promised
2. Inability of the new system to provide needed functional requirements
3. Significantly over budget
4. Incorrect and incomplete training
5. Higher maintenance and upgrade costs
6. Missed target dates
7. Does not meet promised or expected business needs
These failures can be avoided if your business creates the right strategic and tactical approach to system evaluation and deployment. Key to a successful system conversion is to avoid the most common mistakes your peers have made during this business critical process. Here is a list of the most common mistakes.
Requirements gathering was incomplete or ignored
The importance of determining what your business needs are is imperative. It seems simple but it is a task that is missed over and over. Evaluating a new system is a complicated process and the computer sales team will focus on their good features. Digging into your operational needs – not just cool executive dashboards – is the difference between success and failure. And a system conversion failure costs more than just dollars spent.
Understanding your requirements will allow YOU to drive the evaluation process. You will lead your potential new partner down the path of what your business needs, not what they want to sell you.
You don’t have the right team
Engaging the right stakeholders from the onset is critical to success. Roping in executives well down the evaluation path – or worse case, during the installation – is a costly mistake. In the best case, late involvement will steer away from disaster, but at a huge cost.
In order to save money, many businesses do not engage professional project management – they depend on their vendor. But the incentive of the vendor’s project management is radically different from yours. You must control costs and make sure that you’re receiving the maximum benefit and return on the money you spend. Professional project management does that – they keep your vendor honest in making sure that time is committed to the RIGHT tasks. And the right project manager can translate your business needs into the technical jargon that your implementation team needs to understand – kind of like translating German to French.
You didn’t get independent advice
A project should always have an independent project manager paid by the customer, not the supplier according to ITSelector. This is incredibly important. And that independent advice should take place during system evaluation (pre-sales), during the sales process, during contract negotiation, system implementation and post system implementation. Any costs incurred will most likely save you 10x those costs in avoiding lost opportunities and wasted time spent headed down the wrong path.
Management is not committed to the process
Management may view the system conversion process as a painful project but leave it in their technician’s hands. Management must commit to the project and be leaders in engagement and follow through. Buy-in from management regarding the need for system and business change is essential for success.
Your vendor doesn’t provide guidance
All too often the difference between the sales process and the engagement process is night and day. Follow-up, engagement and making sure the right questions are asked (and answered!) are not just important – they are imperative. And you’re in business to move product and make money. If you’re lucky, you change systems once every 5-10 years. Your vendor does this for a living. So who is best qualified to provide guidance in the right moves and steer you away from the wrong moves?
A common problem is that the hand-off between sales and operations is not done well. Typically, you’ve spent a lot of time with the sales team – not just the salesperson, but the pre-sales technician as well. That team has heard a lot of your requirements and “gets” your business. Time and time again, the “knowledge transfer” between the sales team and the implementation team is incomplete. Having to “re-tell” your requirements and needs to the new team is beyond frustrating – and costly.
Your vendor doesn’t understand your business
Systems vendors sell software and solutions. However – are the team members vertically oriented? Or more importantly, do they come from your industry or at least have vertical experience over the past 5 or more years? There are a lot of companies that have been selling into your industry for a long time – but how well does your installation team understand your business? They may be recent graduates, or come from a manufacturing background. Do you have time to explain your distribution business to a neophyte?
End users were not involved
While most businesses think of a system change as a technical project, it is an end-user change. While your end users may be doing things the way they’ve been doing it for 10 years, they know their part of the business better than anyone. A decision made at an executive level without structured end user engagement will create obstacles to acceptance and efficiency. Have all segments of the business own the decision and be “equity partners” is incredibly important.
Change management isn’t understood or isn’t deployed
To repeat a theme – this is not just a technology option. By updating your system you’re changing the way you do business. And if you’ve done your homework, you will improve the way you do business. But making these changes isn’t as simple as training users on how to use the new system. It is about changing business processes to make your company more efficient, add more tools for your employees and make you more money!
Change management is also about engagement and communication. Regular involvement with all facets of your company is important. Keeping the process transparent will help grease the wheels of change.
And remember – very few people like change. Everyone knows how the system works today and they’re comfortable using it. Change dictates that things won’t be as easy as they were in the past, and few people see through the trees to recognize the value in the change. Communicating this from all segments of the business is important – if not critical.
Testing is not adequate
As the new system approaches go-live, theoretically a lot of testing has taken place. Unfortunately, rarely has enough testing of real life processes taken place. Often lip service is given to assure the team that the new system will handle the required business processes. But to insure the change is right your business needs to “see the process”, not be told it will be fine. Many vendors will fight this requirement as it just isn’t easy to perform – but testing the system with YOUR data is critical to make sure you’re providing your business with the right information, and your customers are going to receive the right paperwork. In addition, testing allows the employees use the system before the live data is processed which reinforces the training.
Training is incomplete or not timely
Training is hard for your vendor and your employees. Getting training done at the right time so that your employees have the information fresh in their mind is important. Methodology on how you train is also critical. Do you train the entire staff (hard to do while you’re still running your business), or do you train the trainer? Different methods work differently, so work with your vendor and pick the way that works for you. But don’t train too early unless your staff will be using the system continuously until go live. If you train 3 months in advance, and then don’t touch the system, go live will be very interesting – and not in a good way.
A recurring theme for system conversion failure is lack of knowledge and understanding. It seems that well educated decisions would be key in avoiding these expensive failures. This is especially true of executive management. Being educated and involved in the project will help properly guide towards successful implementation. It is important to understand that management does not need to get into the weeds of the technical process – there are proficient consultants that can assist and enhance this process. Communication is key – the organization must convey what is required in a lucid manner. All key partners must understand the organizational goals – and the more metrics that can be provided, the better the team will be able to measure success.
Implementing a system is an expensive, tedious and time-consuming affair. Your business can’t afford a failure under any terms. Your decision to convert and implement a new system must be made after careful information gathering, analysis and planning.