Key factors affecting system selection projects

Setting clear objectives for the project

The real objective of selecting and implementing an enterprise system is to ultimately add value to the organization, not implement a new system.

Setting clear objectives and boundaries for the system selection project is important upfront for a number of reasons. These include:

• Managing the scope to these objectives
• Being able to clearly articulate these objectives to stakeholders
• Revisiting these objectives throughout the project to ensure they remain valid

Key factor: Setting clear objectives and ensuring a common understanding of these objectives is important. Ensuring all ambiguity is removed is important.

The business case

Where enterprise systems are concerned, they are by their nature expensive and complex, and thus should be considered as an investment by the organization. As with any investment, the expectation is usually that there will be a return on the investment.

Return on investment for new systems, can be measured in a number of ways. Some examples below include:

• Improved customer service resulting in increased revenues;
• Ability to handle more customers resulting in increased revenues;
• Ability to sell more product to customers resulting in increased revenues;
• Process efficiencies resulting in reduced time and effort for staff;
• Staff development resulting in retention of staff and reduced recruiting effort and cost;
• Reduced cost through efficiencies resulting from reduced staffing requirements and the associated cost;
• Access to better reporting resulting in improved decision making and performance;
• Improved cash flow management, resulting in reduced working capital requirements;
• Compliance with reporting or other regulatory requirements resulting in reduced compliance risk and the related penalties
• Remaining competitive, giving the organization the right to stay in business.

If you cannot identify any benefits or return on investment from the new system, then the initial reasons for considering the purchase of a system should be considered and whether those reasons remain valid.

Key factor: As an absolute minimum, identify the benefits you hope to achieve and document these.

Follow a robust process or methodology

New technology more often than not will affect the larger organization. It is seldom the silver bullet initially thought, nor does it resolve each, and every problem the organization may have been facing prior to it being implemented.

For example, new systems may affect:

• how performance is measured and reported, which could have political ramifications and drive new behaviors in business managers;
• how customers are serviced and managed, which could result in a decline in customer service and associated revenues;
• the internal control environment, and remove previous manual controls or create bottlenecks where previously these didn't exist;
• processes that have been in place for years, resulting in employee revolt and negativity;
• the business model and the way people relate to it, affecting performance measures, key competencies and differentiators.
• Enterprise systems will remain in place for a number of years, usually between three to five years, and according to Bain & Company, less than 30% of IT projects are successful.

Poorly selected and implemented systems can affect profitability and ultimately the survival of the organization. In addition, poorly conducted system selections generally attract unwanted attention in the form of auditors, post implementation reviews and uncomfortable questions from senior management or the Board. 

Remember governance and process will more than likely only be required when things go wrong. Make sure you have both.

Key factor: Showing and following due process and governance is thus important in any system selection. The amount of due process will depend on the organization type and the attention to governance type process.

Consider corporate governance requirements

Organizations will differ in terms of their governance requirements.

Consider the following in your organization and how these will impact on the system selection project:

• Formality of decision making processes in the organization;
• How past similar projects or activities have been approved and managed;
• Organizational management structure;
• Relevant policies and procedures for approval and signoff.
  

Key factor: Identify and understand the right levels of governance for your organization. These may ultimately protect and save you.

Consider what stakeholder involvement is required

Consider the various stakeholders in your organization and their respective potential involvement in this project. These stakeholders may include:

• The Board of Directors
• The Executive team
• Various committees in existence
• Business unit managers
• Department managers
• Staff across the organization
• Your own direct reports
• Customers (external)
• Suppliers (external)
• Financial institutions (external)
• Business partners (external)
• Unions (external)

The objective with respect to stakeholders is to ensure their buy-in to the project and to manage their expectations, for both the system selection and ultimately the system implementation.

Key factor: Identify and communicate with stakeholders to get their buy in.

Ensure you read these regularly and understand them well. These factors will support you and protect you through the process.