ERP implementation challenges grow in COVID-19 crisis

Matthew N. Henry

ERP implementation troubles exist underneath even the finest of economic circumstances. ERP initiatives are likely to be complicated, high priced, time-consuming and can have an effect on crucial enterprise features.

These troubles will only be exacerbated by the COVID-19 crisis, as firms reassess the value of prolonged-time period IT initiatives. In a session at Electronic Stratosphere 2020, a virtual meeting sponsored by Third Phase Consulting Team, attorneys Marcus Harris and Daniel Saeedi of the Chicago legislation firm Taft Stettinius & Hollister LLP explored the impacts that the pandemic will have on ERP implementations and what customers can do to alleviate risk and shield their ERP investments.

Harris and Saeedi have in depth working experience consulting customers, vendors and associates on ERP implementation initiatives. Harris focuses his practice on drafting and negotiating ERP licenses and SaaS agreements, and has litigated scenarios stemming from ERP implementation failures. He also served as in-property counsel for ERP vendors, including SAP and Infor. Saeedi focuses his practice on employment legislation and unfair levels of competition issues.

This is the initially of a two-element sequence talking about ERP implementation troubles in the wake of the pandemic.

three ERP implementation troubles induced by the COVID-19 crisis

Marcus Harris, partner with Taft Stettinius & Hollister LLPMarcus Harris

Marcus Harris: The pandemic offers alone in three different approaches for an ERP implementation: It has an influence on the delivery of the cloud services that you previously have it has an influence on the ERP undertaking that you’re now engaged in or about to and it offers an prospect to renegotiate or reassess your connection with ERP vendors. If you’re about to embark on an ERP implementation undertaking now, it can be heading to be much more challenging than typical. Generally, any ERP undertaking is heading to get extended than you be expecting and is heading to price tag much more than you be expecting, and these issues are exacerbated by the current atmosphere.

Determine apparent aims at the begin

Harris: Basically, you have to outline apparent aims for your ERP, and if you’re simply just employing know-how for the sake of employing know-how for the reason that you want the hottest and best, you’re heading to do oneself a disservice. You’ve received to have a apparent comprehension of what your enterprise specifications are and what the enterprise circumstance is for that application. This is the time to have a apparent intention and a apparent comprehension of what you’re hoping to get out of the procedure. You also have to have realistic implementation anticipations. If you consider that you’re heading to roll out a complex ERP procedure in multiple web sites about the entire world in a three- to 6-month time period, that’s probably not realistic. It wasn’t realistic in a pre-COVID atmosphere, and it can be definitely not heading to be realistic now. You are heading to roll with the punches and foresee what some of the troubles are heading to be and appear up with creative workarounds to offer with that so that you can make certain that your implementation undertaking stays on keep track of.

Get treatment of the nontechnical issues

Harris: You have to handle the nontechnical issues connected with employing your ERP. It is really terrific to have all the bells and whistles, but you have to make positive that you’ve performed simple points. You’ve received to have a undertaking charter in spot, you’ve received to have professional consultants that you’ve employed — it’s possible from the outside the house — be element of your internal crew and manage undertaking sources. If you do not have undertaking governance of methodologies in spot in your contracts, you’re heading to set oneself up for catastrophe. You’ve received to diligently manage the scope, diligently manage the price tag of the implementation undertaking.

Offer with the undertaking disruption

Harris: Devoid of a question the COVID crisis is heading to result in undertaking disruption. You have at the very least two choices. A single solution is to halt or postpone the undertaking, but there are sure risks connected with that. You will find heading to be a reduction of ‘tribal awareness,’ and the consultants that comprehended your enterprise may well not be readily available later. You will find also heading to be ramp-up time and expenditures connected with receiving new consultants on board that have an comprehension of where by your undertaking has been, where by it can be heading, and what your enterprise specifications are. So there’s a lot of risk connected with suspending your undertaking in this current atmosphere. A much better solution from a risk perspective is shifting forward, but building positive that you set in spot sensible workarounds. You’ve received to account for the undertaking disruption and you’ve received to consider about points like consultants functioning from home.

Take into consideration info security

Daniel Saeedi, partner with Taft Stettinius & Hollister LLPDaniel Saeedi

Daniel Saeedi: Now, with full sections of the workforce functioning from home, you have to account for the amplified fee of info security risks and privacy risks. The entire world of info privacy is booming for the reason that there’s an exponential maximize in the variety of units that contain the private data of the undertaking. Acquiring a limited plan construction of how this is heading to get the job done in conditions of coordinating a undertaking with quite a few individuals functioning remotely is critical. You also have to develop in the acceptable nondisclosure provisions and account for amplified risk in the contract, for the reason that if an staff or third party has delicate solution data on a home laptop computer, and that laptop computer receives strike by a cyberattack, you have a issue. So you have to account for the amplified risks of compromising private data and trade techniques, and account for the fact that the crew is heading to be functioning remotely and is heading to have to coordinate who is in cost of what data and who has possession of what data. You’ve received to get your ducks in a row.

Emphasis on undertaking governance

Harris: Given the disruption to your undertaking that’s heading to be induced by COVID, you’re heading to want to emphasis with a renewed diligence on undertaking governance. Make positive that you get undertaking updates on a standard foundation and make positive that they offer you with significant data. In the previous, [a lot of these stories] just have consultant converse that won’t actually inform you where by it is these days or where by it can be headed and won’t give you the appropriate sum of risk identification that you have to have.

Regulate the undertaking spending plan

Harris: You have to have to scrupulously manage the undertaking spending plan for the reason that some vendors may well use COVID as an justification to overbill you. Normally, your expenditures for the implementation may go down, but they may be unfold out further. Transform orders come to be much more important than right before for the reason that now you’ve received this disruptive situation, and it can be an justification to use the alter order course of action to back-in amendments to the contract. You can say that the get the job done-from-home state of affairs wasn’t envisioned four weeks or 6 in the past, so it can be now acceptable to carry out some large-responsibility alter orders to make positive that you’re capping some contingencies, accounting for spending plan raises that may come about, or even use it to renegotiate some of the simple assumptions in the statement of get the job done.

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