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Common errors in ERP-projects – Project value

25 March, 2015

Straight to the point: Business value is generated before and after an IT project, whereas the IT project itself only adds cost. For ERP projects, the cost can be significant.
Surprisingly, prior to launching an IT project discussions revolve to a large extent around choices of software and consulting providers, and detailing of user requirements, and not on the expected business benefits, such as shorter lead times, lower tied-up capital, or higher delivery reliability. Benefits could also be achieved in an external perspective, such as increased customer value, level of service or capability to deliver against new customer segments. To build upon today’s issues with today’s IT systems and maintain today’s ways of working is like adding a new IT cost to today’s IT cost without adding value to the business. Obviously, this is a waste of money and resources.

To create true value, the planning time before, and realization time after an IT project should be at least as long as the time for the IT project itself.

Prior to the ERP project, new ways of working need to be agreed upon, and customers’ changing requirements need to be understood. In addition, how complementing service deliveries or the serving of new customer segments will change the information model and the governance of the business need to be understood. Upon IT project completion, change management is necessary for a long period of time. After all, it is human behavior that needs to be changed in order to create value. However, different business cultures handle it differently.