Elizabeth Newman, Senior Advisor, KPMG Shared Services and Outsourcing Advisory

ERP systems have the potential to deliver significant cost savings, productivity boosts and efficiency gains to public sector organizations. But their implementation is fraught with complex technological challenges, are highly disruptive in how core business processes are conducted, and are highly prone to timeline extensions and budget overruns. So to help public sector organizations gain first-hand insights into what it takes to make an ERP implementation successful, we recently conducted a study among a variety of public sector entities that had already implemented ERP or were in process of doing so.

Per our study’s four major focus areas, following is what the participants – including ERP project sponsors, project directors and executives with broad knowledge of and experience with the project – recommend to their peers as “must do’s.”

The Timeline – 70 percent of respondents stated their ERP project timeline was inadequate, and inexperience with large IT projects was a commonly cited root cause. Their recommendations:
• During planning, consider your entire IT landscape, including current and planned projects
• Establish a contingency fund
• Develop a structured and manageable approach endorsed by implementation partners
• Clearly outline decision authority in your governance structure
• Build in ongoing assessments to enable constant project plan refinement

Change Management – While 77 percent of respondents reported their organization established some degree of change management during their ERP implementation, more than half cited failure or weakness in their approach. Their recommendations:
• Visible executive sponsorship is key to building project momentum and engaging stakeholders
• Communications must be comprehensive, consistent and tailored to a variety of target audiences
• The impact on end users cannot be underestimated, and you must carefully evaluate if a “big bang” approach makes sense for your organization
• Mitigate resistance by prioritizing and meeting project deadlines

Software Customizations – 79 percent of respondents stated their organization attempted to minimize ERP software customization and reengineered business processes to align with selected off-the-shelf solution. Their recommendations:
• Determine, upfront, the extent to which the software can handle your organization’s complexities
• During the procurement process, identify upfront necessary customizations where software cannot be configured
• Be cognizant of the long-term consequences of customizations, especially the impact on future upgrades
• Tap the executive sponsor to strengthen the commitment

The People Factor – 52 percent of respondents acknowledged challenges in identifying the requisite skills sets for ERP system implementation. Their recommendations:
• Leaders are most likely to volunteer valuable talent if they understand the value of ERP
• Foster project staff continuity on both the organization and vendor/system integrator side
• The availability of resources is not as important as their skills and experience
• Structure the project team (internal and external) for dual accountability

For more details and specifics on public sector ERP implementation, please read our paper, “ERP and the Public Sector: Useful Implementation Insights from Peers That Have Been There, Done That“.

Filed under: Enterprise Systems, How to..., Public Sector by EquaTerra