Major Order Management System Project Failures and How To Avoid Them

   

In doing some research for a client looking to get started on an order management system project, we order management system failurecame across a study that was conducted of 800 senior IT managers from the United States, England, France, Germany, India, Japan and Singapore. The study revealed: 

  • 62% of the IT projects failed to meet their company’s schedule

  • 49% experienced budget overruns

  • 47% experienced higher than expected maintenance costs

  • 41% failed to deliver the expected business value and return on investment

Although this study is a few years old, it is consistent with other studies we see published about IT project management.  Since 1983, our order management system consulting has identified 20+ major problems which cause these failures in systems projects. 

What Are the Reasons For A System Project Failure? 

From our experience, we have divided the reasons or causes into three categories: a) common causes no matter if in-house or commercial systems; b) for in-house developed systems; and c) for commercial systems.

The failures are as follows: 

Common Causes No Matter if In-House or Commercial Systems

  • Scope creep for the 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 usually back fires

  • Lack of a detailed plan, failure to schedule  project status updates on regular basis

  • Lack of effective and sufficient testing and validation; unit, system testing, user acceptance or 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 the appropriate resources

  • Lack of strong and effective Project Management

In-House Developed Systems

  • Development never reaches high percent completion

    • Underestimate scope

    • Underestimate resources required

    • Overstate in-house abilities

    • IT management fails to understand fully the business requirements

      • There is no formal review and signoff process by the users before anything  proceeds

Commercially Available Systems

  • Poor “application and/or process fit” for business

  • Making too many modifications which increases cost, risk and project delay

  • Failure to use a high percent of standard commercial system functionality

  • Turning over project management to the vendors

  • Failure by vendor to dedicate sufficient resources

Assess Your Company’s Risk and Readiness

In order for you and your company to be successful at implementing a new order management system you need to assess the risk and readiness of your company before you commit to a major system project. An objective, dispassionate assessment and proper planning will help reduce or eliminate many of these problems. 

In order to effectively complete an objective assessment of the risk and readiness of your company, you will need to approach all departments within your company that will be affected by the new system. Your IT department is a great place to start reviewing. Here are a few points to think about: 

  • Review with your IT department any lists of open requests for needed functionality and anticipated new peripheral systems currently being made by departments within the company.

  • Review with your IT department their perspective on how well they can support a new order management system, and the means available and required to maintain the system in the future.

  • Review with your IT department and come to an agreement on how to develop the cost and schedule for the future system.

  • Review with your IT department the feedback from all departments affected by the new system on any future system requirements requested.

  • Review with your IT department all integration points for the new order management system with internal systems and 3rd party (external) service bureaus and systems.

Don’t stop there though. This is just the tip of the iceberg for a risk and readiness assessment of your company. Remain objective and unemotional and you will be on your way to a successful risk and readiness assessment of your company.