I am evaluating projects known of troubles to find the reasons of troubles and make remarks how to avoid and how to proceed when already occurred. As I wrote already in:
On the list of the biggest ERP (?) failures of 2011 I found three SAP ERP implementations and realized that … no one is really ERP failure! I like to exploit now the Marin County case because of two reasons:
- 1. it is very well documented in Internet – by this opportunity: I have no inside information and I am living in the “galaxy far far away“ from California – so I can play the role of auditor(?)
- 2. it gives an illustration of some specific aspects for project managed especially in public sector – most probably world wide – which gives really good material for generic hints as I like to do.
My strong belief after almost 18 years of experiences with implementing SAP ERP is that it is 100% “implementable”. There are of course some troubles in almost every project but they are mainly “organizational” in the nature and if properly treated are to be solved on-going on the project. That is why I am hunting for failures to identify the reason. I am sure that neither the product nor the implementation methodology may be the reasons for troubles – as for today after many researches I am sure of this thesis.
There is a lot of comments about the Marin County case. The easiest way is as usual to blame the implementation vendor – and many of that comments are making this. There are however also comments that are based on deeper inside and also naming the obvious negligence of the customer like this one:
I will come back to this article later to formulate the observation of public sector specific aspects of project management.
Please note that there is a lot of publications of “independent” consulting companies that are making their business based on scarring the audience about alleged dramatic ERP failures. I must say that I realized that they very often even not read the available documentation before formulating their comments and recommendations. Sometimes they are named as ERP also the tailored developments what illustrates their professional attitude and competence.
I am “independent” consultant as well but I am sure that scarring has no fundamental reasons by SAP ERP implementations and the right attitude is to be sustainable in taking the lessons and formulate the hints.
After evaluation of the documentation and information available (there are copies of contracts and the claims as well) I am sure that in case of Marin County we are not allowed to name this as “project failure”:
a) project ended on time
b) project ended in budget (however: there were 10 extensions on the change orders basis – I come to that in next post)
The only thing that may potentially allow to talk about this case as about the failure is that customer is “deeply” unhappy and claims that the system is not fulfilling the expectations. In view on the auditors reports however (ordered by the customer) it seems that the main obstacle is too small and untrained staff. With 1 million $ consumed only for trainings that is reason for consideration because it should be sufficient for intensive training of dozens of users. My opinion after evaluation is – but only short now – there are reasons of this specific for the public sector but not in terms of missing functionality! I will discuss this aspect in next post.
In this post I like to focus on that the Marin County already in 2010 started the process of preparation of replacement of SAP ERP. They made the evaluation of the costs ownership and in the effect they had the conclusion that it will be cheaper to replace SAP ERP with other system than to make the use more efficient:
I must say this is clear example how to prepare “analysis” to get the expected result. Please note that doing this County is now in conflict with their own evaluation led in the past to chose the SAP ERP for implementation. That’s obvious: how it was possible in 2005 to come to the conclusion that SAP ERP in best way suits to requirement of the County and now – based on similar parameters – to completely different conclusion: that it is cheaper to replace SAP ERP, to make into scrap the whole investment and implement completely other solution?
It seems however that this proceeding is more to strengthen the position in civil trial than really to replace the system. After two years the County came to the idea to take another company to make evaluation which software will be the most suitable as the first phase to replace SAP ERP. This time for 0,599 million $. And that in context of necessary savings due to worldwide economical downturn etc.:
I can imagine that there are many ways to spend public money for something that will lead to nothing. This is similar attitude like of child bored and sulky of the toy.
In this context I can make advice for free: if the initial evaluation (from 2005) is still valid – what I expect is the fact because it does not seem the County administration has shrunk dramatically – SAP ERP is the right solution, but has to be maintained in the right way to give the efficient support for administration. There are few built important points like: staff training and follow the evaluation of Phoenix from 2010 about the areas that have to be corrected. I will discuss them in next entry.
I come to formulate the general rule number 1:
if the ERP project encountered troubles the right way is to correct them and do not replace the solution. If the chosen solution was SAP ERP there is no other solution that in this point of time will replace SAP ERP and will be cheaper in terms of ownership.
The only one exception from this rule is when the initial evaluation was completely – but really completely – wrong.