Mitigate Risk in ERP Projects with Organizational Change
We approach risk mitigation from the perspective of an ERP organizational change agent and stakeholder. That means that we examine an Enterprise Resource Planning (ERP) system implementation effort as an ERP project as well as an organizational change project. In order to properly mitigate risks, the organization needs to fully understand all of the real, not just perceived, risk factors that may contribute to the failure of an ERP organizational change effort. And then, there needs to exist stop-gap mechanisms that proactively identify, react to, and properly address these potential risks. This stopgap mechanism needs to be deliberately, intentionally, and purposefully designed into the ERP organizational change project plan.
Know the Risks involved with ERP Organizational Change
ERP risk mitigation is a crucial concept as every ERP organizational change project will have its own unique set of risks. ERP organizational change efforts need to be good at playing the “What if” game. From initiation to close out, the organization needs to ask themselves what if this or that goes wrong. The general idea is to try and anticipate the events and conditions that will produce negative consequences. This general idea requires that an organization know what these potential risks actually are and then they can proactively address them.
At Nestell & Associates, we have developed an extensive array of critical questions that we ask ourselves to uncover potential project-based risk. The way we reveal potential risks is to follow a project’s critical path keeping in mind both the [what ifs] and the [what might] questions. We follow the critical path to discover potential breaking points, but also to measure progress in the project life cycle, partition the potentially problematic areas of focus, and adaptively assess the project implementation controls and evaluation.
Large and small ERP implementations are subject to many opportunities for failure. As ERP organizational change agents, we keep focused on anticipating and revealing risks that can impact the success of the organization. We keep one eye on our target-state and deliverables, the gap between the initial project scope (its assumptions) and the implementation progress. There are certainly ERP implementation risks, but there is an antidote.
By Matthew V. Brown, Ph.D. and Jack G Nestell, Ph.D.