How to Take Charge of Your Order Management System Project

IT projects often fail to be delivered on time and within budget. This is an old recurring theme for many system projects whether done internally or trying to implement a packaged order management system. A study conducted a while ago by Dynamic Markets Limited of 800 senior IT managers revealed:

• 62% of the IT projects failed to meet their schedules
• 49% experienced budget overruns
• 47% experienced higher than expected maintenance costs
• 41% failed to deliver the expected business value and return on investment (ROI)

Although this study is aged, it is consistent with other studies we see published about IT project management. Why do order management system projects fail sucha high percentage of time?

From our experience, we have divided the reasons or causes into three categories:

1. Causes in common whether in-house or commercial systems
2. For in-house developed systems
3. For commercial package systems

Common Whether In-House or Commercial Systems

• Scope creep for project
• Ineffective or poor communication among the project team and with management
• Failure to deliver needed functionality
• Failure to deliver on time
• Failure to deliver within budget
• "Big Bang" replacement strategy of all systems at once back fires
• Lack of plan, schedule and status updates on regular basis
• Lack of effective and sufficient testing and validation; unit, system testing, acceptance of conference room pilot testing
• Treating the project as an IT project rather than getting total buy in and making task responsibility and accountability assignments
• Lack of contingency planning
• Lack of sign-offs and approvals at key steps
• Management does not commit to appropriate resources
• Lack of strong and effective Project Management

In-House Developed Systems

• Development never reaches high percent completion
  • Under estimated scope
  • Under estimated resources required
  • Over stated abilities
• IT management fails to understand fully the business requirements
  • No formal review and sign-off process by the end users before anything proceeds

Commercial Package Systems

• Poor "application and/or process fit" for client's business
• Making too many modifications increasing cost, risk and project delays
• Failure to use a high percent of commercial system functionality
• Turning over all project management to the vendor
• Failure be vendor to dedicate sufficient resources

The IT spending waste that occurs in our industry is at times mind-blowing. Whether it is due to the vendor over committing, management fixed on a "go live" date that is not realistic, or any other number of reasons as stated above - order management system projects are delayed or abandoned. Whatever the reason for delays or putting the project on indefinite hold, it is costing hundreds of thousands of dollars in finacial waste.

A fair amount of the time this financial waste is due to the lack of project management on both the client and the vendor. The following tips are based on lessons we have learned that could help you to avoid the same fate with your system implementations.

• Understand the details of what it is that is being acquired or being done internally. Some projects should simply never be. Usually it begins when management accepts the vendors selling proposal, which turns out to be flawed or the internal project is signed off on with insufficient detail. We have clients who have approached us after signing agreements to purchase licensed software because they run into one roadblock after another. What they assumed was part of the base software turns out to be a modification for the functionality to perform as the client needs it to.

• Who is in charge of managing the project? Both the client and the vendor have to have a project manager. Too many times the client leaves this responsibility up to the vendor -and that is not a good idea. The vendor doesn't know your business or organization, so how can you expect that they can manage all of the tasks and do so remotely. Another reason not to employ the vendor alone to project manage your implementation is it is expensive. You need to be in control of all the processes that need to be done internally to meet the implementation.

• Have a detailed project plan. Some vendor proposals include a timeline to implement their order management system that is made up of high-level task schedules and bar graphs. A detailed plan for a complex systems implementation requires all the details to be thought out and include all modifications with their time frames. Both parties need to agree to the time commitments and be sure the end date for "go live" is realistic. A common mistake companies make is that they don't update the plan weekly. This, along with a weekly conference call with the vendor's project manager, is crucial to be sure that all task are on schedule.

• How often are you communicating? As we all know, systems projects involve a lot of verbal and written communication, with documents constantly passing back and forth. It would seem on the surface that you are talking many times every day. But that's really not the case. You need to have weekly conference calls between the two parties, conducted by the two project managers to review the total project and the schedule and resetting objectives, if necessary. Other critical parties can and should join, if available. Then the two project managers should circulate the updated schedule and meeting notes. Once you are inside 30 to 45 days, you should be having a brief conversion meeting daily. This is an excellent way for all parties to stay committed to each other and to get the implementation done.