Pemeco Inc.

Serving Business Since 1978

How to Implement ERP

Correctly:
Guarantee That Your
Implementation Finishes On
Time, Stays Within Budget, And
Achieves Performance-
Improvement Goals

Discover THE “MILESTONE DELIVERABLES” APPROACH TO IMPLEMENTING ERP:

THE HANDS-ON IMPLEMENTATION METHODOLOGY THAT HAS NEVER FAILED

By Peter Gross

Pemeco, Inc.,
416 Wood Ave.
Montreal, QC H3Y 3J2

+1 (514) 910-5079 Phone

+1 (514) 931-0047 Fax
www.pemeco.com
business@pemeco.com

416 Wood Avenue

Montréal, Québec H3Y 3J2
Telephone: +1 (514) 910-5079
Fax: (514) 931-0047
 Successful ERP Implementation:
The Challenge of Your Career
Is your organization about the jump on the ERP bandwagon? Then you probably
are full of questions, not the least of which is “How do I pull this off without a
hitch?”

You have good reason to be concerned. According to a 2000 study by PA

Consulting Group, a mind-boggling 92% of ERP implementations fail. That is, these
critical projects aren’t finished on time, they exceed their budgets or, perhaps most
distressing of all, they don’t work as envisioned.

When ERP projects fail, the results can be devastating.

Hershey Foods and Whirlpool suffered distribution problems associated with their
ERP applications … and watched their stock prices tumble as a result. Some
companies, such as pharmaceutical distributor FoxMeyer Drug, have gone so far as
to blame failed ERP implementations, at least in part, for their resulting collapse.

What rarely make the news are the personal repercussions suffered by the
executives in charge of the botched implementations. A failed ERP implementation
could haunt you for years, becoming a permanent smudge on an otherwise stellar
résumé. With the specter of failure looming over you, you end up being passed over
for promotions, receiving less appealing raises and bonuses, or even pounding the
pavement for a new job.

The Seven Most Common Reasons

ERP Implementations Fail … and
What You Can Do About Them
There is some good news, though. Pemeco Inc., a business and management
consulting firm that was founded in 1978, has identified the seven most common
reasons ERP implementation projects miss their budget, timeline and performance-
improvement goals.

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#7 Critical stakeholders don’t accept or get involved with the
implementation.

ERP implementations are “pervasive”. They impact most departments and

impose changes on the way people handle their day-to-day functions. If middle
managers sense a lack of senior management support, they may introduce
roadblocks that will adversely affect a project’s performance.

Many senior executives regard ERP implementations as simple, albeit costly,

technology upgrades. It is imperative they understand the end result will be a
significant change to the way the organization looks and operates.

By the very nature of ERP systems, departments are forced to share information
that they considered proprietary in the past. Stakeholders must insist that silos,
constructed over the years for hoarding information, be dismantled.

Senior managers must facilitate negotiations among the various parties when
disputes or disagreements erupt. They must keep their focus on the overall
objectives and contribute sufficient time to the endeavor while avoiding being
bogged down with the project’s finer details.

#6 Lack of user input.

Lack of user input will likely contribute to a bad ERP implementation. Introduce
the project to those who will be affected by the outcome. Include not only the
users, but also the business partners and other internal departments whose
cooperation will be needed.

Even though this may slow things down, the project management team must
identify all the key resources needed to implement and support the ERP project.

As mentioned above, information must not be hoarded. Convince middle

managers to be forthcoming about the way their departments run and alleviate
their fears that the new software will reduce their influence.

Senior managers must reinforce the project's benefits and stress the importance
of sharing information. They must make sure three broad groups contribute before
the project gathers steam: those who will be affected by it, those who will
implement it, and those who will pay for it.

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#5 Specifications and change control procedures are poorly
defined.

Poorly defined specifications and a lack of change control procedures are prime
causes of ERP project failure. Requirements must be well defined up front to obtain
the required consensus among the stakeholders.

One of the keys is to secure input from the stakeholders through a series of
planning meetings to define in clear terms what the project can, and cannot do.

Senior management must ensure project scope changes are managed in a

formal manner. This includes, but is not limited to, delays in the schedule or
requests for additional money.

#4 Expectations are unrealistic and undefined.

Estimating ERP project schedules and resource requirements has always been a
hit-and-miss affair. Stakeholders, less knowledgeable about what the technology
can really do, create their own expectations — even fantasies.

If expectations are not set, scope creep is inevitable. An initially straightforward

project can evolve into an unmanageable one, violating schedules and consuming
resources.

A formal project charter must be established to set expectations. Project

management must ensure that formal budgeting and risk assessment happen while
senior management makes sure the culture is in place for a strong project
management discipline.

Projects fail, not because the tasks are insurmountable, but because they're
engendered by an effort to transform the company. Information Technology is
used as the catalyst for that change and makes a very convenient scapegoat if
things turn ugly. When a project falls short, it may look like IT failed—but it's
almost always because the organizational change was unsuccessful.

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#3 The wrong consulting partner was chosen.

Employees often experience resistance and resentment when outsiders are paid
to do consulting work within a company. And this is an impediment to sharing
information.

Avoid the bait-and-switch practice wherein the integrator’s "A Team" flies in for
the presales meetings and launch — and then promptly hands the project off to a
less experienced and, perhaps, less-skilled, crew. And when working on the
consultant’s contract, it's important to negotiate toward a reasonable, achievable
agreement. These aren't adversaries; these are partners.

#2 Communication is poor.

The everyday communication problem is worse when IT is involved, simply

because it's hard for a lay person to grasp the lingo. Use non-technical terminology
whenever possible, especially when communicating outside the project team.

The project manager must be forthcoming with any news good or bad. Line
workers don't want to be the bearers of bad news, and senior managers contrive to
not hear bad news if it’s ever delivered. As a result, nobody sounds the alarm on IT
projects that have "disaster" written all over them until it's too late.

Ensure that senior executives are available when they’re needed and that they
stay in constant touch with the project management.

#1 The implementation methodology is unclear and untested.

But perhaps the biggest – and deadliest – mistake organizations make when
implementing ERP is relying on an unrefined, and even untested, methodology.

Too often, the key players in ERP implementations – VPs, CIOs, CFOs,
controllers, and the like – assume that they can get by on their own. They dive into
the project only to discover that implementing ERP is more complex than any
garden variety project-management style or approach can handle.

An alternative scenario, which will become more common as smaller companies

begin using ERP, is that the personnel in charge of the implementation mistakenly
believe that because their organizations are small, their implementations won’t be
complex and, therefore, don’t require as much “fuss” as a big business
implementation would demand.

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 Both of these beliefs are false and could lead to the downfall of your project.
ERP implementations are complex, regardless of the company size. To ensure your
project is a success from the get-go, it makes sense to find and religiously follow a
methodology that has been proven to work consistently with a variety of ERP
implementations.

The Milestone Deliverables Methodology:

Used in 47 ERP Implementations During the
Past 26 Years – with ZERO Failures
For the past 26 years, Pemeco has been refining a proprietary implementation
methodology – called “Milestone Deliverables” – that virtually guarantees the
success of any ERP project.

We’re able to make that claim based on our results:

47 ERP implementations … in 26 years … and ZERO failures.

The Milestone Deliverables process succeeds where other methodologies fail

because it is a common-sense, cut-to-the-chase approach to implementation. It
slices through the touchy-feely “paralysis by analysis” and endless dialogue of
“consultant-speak,” instead concentrating on a clearly defined process and tangible
results.

Since the late 1970’s, scores of Pemeco’s clients have implemented complex
systems. As the projects got progressively more complex, our team members
avoided floundering all over the place by focusing on the scope definition, rigorous
change control, and a tightly monitored phase execution. To ensure that the project
roadmap was clearly defined, appropriate signposts were erected along the way.
From this analogy, the “Milestone Deliverables” methodology evolved, providing a
framework that structures the myriad tasks into a simple, deliverable-oriented
model.

Specifically, the project tasks are accompanied by fourteen tangible deliverables,

strategically sprinkled throughout the project’s phases. Completing a deliverable
signifies the completion of a particular milestone. And this completion often is a
prerequisite to the start of the next phase.

The format of these deliverables is not set in stone. In fact, this methodology
does not intend to limit the choice of software for word processing, spreadsheets,
project management or databases, nor does it intend to suggest using the sample
report formats without modification. What is important is to be faithful to the

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concept of using this methodology to manage the team to produce high-quality,
tangible results in a timely fashion.

The Milestone Deliverables are:

1. Project and Subsidiary Plans to list project objectives and scope

2. Kickoff Presentation to signal the start of implementation execution
3. Core Team Training Courses to teach ERP overviews and application
details
4. Business Scenario Lists to list each department’s processes
5. Blueprint White Papers to document each department’s operations
6. Gaps and Issues Database to assist tracking and reporting of gaps
and issues
7. Change Management Plan to lay out end users’ skills upgrades
8. Walkthrough Presentations to present each department’s business
processes
9. 80% and 20% Scenario Scripts to detail and pilot user instructions
for each business scenario
10. User Training Courses to teach the new operating methods and ERP
application details
11. User Documentation to combine the many deliverables into a
comprehensive document
12. IT Specifications to detail customizations, interfaces, and special
projects
13. Migration Plan to map out tasks for conversion and entry of legacy
data
14. Cutover Plan to document the project final weeks’ tasks

Why Milestone Deliverables Succeeds

Where Other Methodologies Fail
The Milestone Deliverables premise is simple and powerful: If you provide
managers and their teams with the ability to measure the project outputs, you will
be rewarded with an organizational culture that is focused on deliverables.

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 Each team member benefits from managing by deliverables. Working with their
personalized work package in a simple intuitive framework, they gain instant clarity
on the scope of their assignments and associated deliverables.

And the deliverables themselves are like a good wine – they constantly improve
with age throughout the project cycle. As the team gathers more and more
information and resolves any outstanding problems and issues, the deliverables
evolve into better and more complete versions of themselves.

If truth be told, this “Milestone Deliverables” methodology is nothing more than

a common-sense approach to managing people, objectives, and tasks. It has
evolved continuously over 26 years and simply assumes that people are more
effective, and better motivated, when working towards smaller, finite goals.
Completion of these goals is signified by the production of tangible “end products.”
And with this feedback, managers are empowered to keep the project on track.

A Methodology that Works for Any ERP Implementation in

Any Industry

Enterprise Resource Planning (ERP) system implementations are extremely

complex, touching all aspects of an enterprise's operations. The Milestone
Deliverables methodology has been used to implement ERP in a variety of
companies around the world, including:

• A multi-national provider of products and services to the worldwide

nuclear power market.

• A diversified multi-national manufacturing and service concern to the

aerospace, ground defense, railroad, and fire & rescue industries.

• A multi-national designer and manufacturer of pressure relief and safety

relief valves, air driven pumps, boosters, power units, and nitrogen
product boosters.

• A global leader in the animal agriculture industry, providing goods and

services to the leading commercial food producers worldwide.

• A leading provider of voice technologies, systems that manage patient

information, and recording solutions for contact centers, public safety and
correctional facilities

• A medium-sized plastic and fabric manufacturer and distributor.

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 • A multi-national manufacturer and distributor of security and banking
systems.

• A manufacturer and distributor of truck bodies

• A multi-national manufacturer and distributor of printer ribbons

• An international manufacturer of computer components

• An international manufacturer and distributor of bathroom accessories

• An international manufacturer and distributor of forestry equipment

• An international manufacturer and distributor of electronic musical

instruments

How You Can Master the

Milestone Deliverables Methodology
You can learn the complete Milestone Deliverables process – and how to customize
it to your organization’s needs – during Managing a Successful ERP
Implementation, Pemeco’s two-day seminar.

By participating in this event, you’ll learn:

¾ Break the implementation project into easily managed tasks …
making it easier to keep your team focused and motivated
¾ Develop accurate budget projections … and ferret out the hidden costs
that cause most budget overruns
¾ Develop a realistic project timeline … and keep the project running on
schedule
¾ Manage “scope creep” and other project changes that distract your
team … without sacrificing your deadlines or budget
¾ Guarantee your ERP application enhances productivity … and that it
works exactly as envisioned
¾ Help change your company’s culture and the way employees work …
so you get the biggest return on your ERP investment
¾ Build credibility with top management … so you get the support you
need for a successful ERP implementation
¾ And much more. Full details about this event can be found at
www.pemeco.com/seminar

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 As one of the benefits of attending this seminar, you’ll also receive a free half-
day consultation with Pemeco President Peter Gross. Conducted via telephone
conference call or at your site (your choice), the consultation will help you analyze
your organization’s readiness to implement ERP, to spot the wrinkles and flaws in
your implementation plan, or to get your implementation project back on track.

Alternatively, if you know now that you’d prefer having Pemeco’s 26-year track
record of success backing your project, bring us in to head up your organization’s
implementation. Just call us at +1 (514) 910-5079 or email us at
business@pemeco.com to request an ERP Implementation Project Analysis. We’ll
review your project’s parameters and goals to help you decide whether Pemeco is
the right consulting company for your organization, as well as answer any questions
you have about the Milestone Deliverables process.

How Else Will You Guarantee

Your Implementation’s Success?

With your career and your company’s very existence riding on your ability to
successfully implement ERP, you can’t leave anything to chance. Only the Milestone
Deliverables process has a failure-free track record … which is exactly why you
should plan to attend Managing a Successful ERP Implementation.

Don’t let Big Business’s discouraging history of ERP failures get you down. Your ERP
application can be implemented successfully, so that it achieves its budget, timeline
and performance-improvement goals. The Milestone Deliverable implementation
methodology can practically guarantee your success.

This report is provided compliments of Pemeco, Inc., creator of the proprietary Milestone
Deliverables approach to implementing successful ERP applications. You can reach Pemeco
via phone toll-free at 1-866-931-0046 or by email at business@pemeco.com

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