This is a true story. The company name has been changed.
Acme Corporation hired a project manager and an experienced consultant to implement their new ERP system, which included modules for project management, procurement, accounts payable, and general ledger. The project was to be completed within four months.
Acme set up a project steering committee to oversee the project. The members of the committee were the VP Finance, the Controller and the IT Manager.
The project team included full-time representatives from accounts payable, corporate accounting, and the IT department. Each individual on the project team was selected because he had experience in his particular area of work, and a good work history with the Acme Corporation.
Early on, it became apparent that tasks were not being completed timely. The consultant revealed to the project manager that the users assigned to the project team did not have the necessary level of expertise in accounting. Although they knew very well the specific steps to take on their existing system, they didn’t understand the underlying accounting principles. This lack of knowledge made it very difficult to make informed decisions about how they wanted their new system to work.
As a result, the consultant was spending a lot of time teaching fundamentals of accounting, before presenting the options available for configuring the general ledger module.
The project manager was concerned about the timeline, as there had already been a noticeable delay, and there were many decisions yet to be made. The project manager encouraged the consultant to be more directive in the design and pilot, and spend less time on the accounting basics.
This decision speeded up the pilot considerably, and the project team was able to catch up and get back on schedule.
When the pilot was finished, the project team was concerned that the system had not been adequately tested, and recommended delaying the go-live date.
The project manager disagreed with the rest of the project team and recommended to the steering committee that the system should go live as scheduled. She had met with the consultant and established that all appropriate decisions had been made, and that the project team’s discomfort was due to their lack of knowledge of basic accounting principles.
When the project manager met with the steering committee, the Systems Manager was away, and the VP Finance had recently resigned and left the company, so the recommendation was really made to just the Controller. The Controller was satisfied with the design decisions that had been made by the project team and approved the go-live as scheduled.
The system did go live on the scheduled date. However, a few months afterward, when the project manager did a post-project review, she discovered that Acme Corporation was unhappy with the new system. They said, “It doesn’t work the way we thought it would”.
The project manager pursued this comment and discovered that the procurement and project management staff at Acme actively disliked the system and the newly designed processes.
In addition, the accounting users were very uncomfortable with the new system and didn’t understand fully how it worked.
There were multiple causes for the dislike of the new financial system at Acme.
First, the project steering committee had no representation from the procurement and project management areas of the company. This omission led to an accounting-based project team, and accounting-driven processes, with little or no understanding of the impact on procurement and project management staff at the company.
The project manager should certainly have questioned this gap in the steering committee and project team representation right at the beginning of the project. Neither the steering committee nor the project team membership were set up for the project to be successful.
Second, the accounting users didn’t like the new system because they didn’t understand it as well as they should. Because the consultant was so directive in the decision-making process, and because the project team didn’t understand the underlying principles of their design, they didn’t have the confidence to take ownership of the design of the new system and processes.
When the lack of basic accounting knowledge was discovered, the project manager should have resisted the temptation to focus so much on keeping to the schedule. It would have been prudent to either question whether the right project team members had been selected, or perhaps to request a delay so that training of accounting fundamentals could have been delivered.
If the project is done on time and on budget, but it doesn’t support the needs of the business, can it be considered a success?
Copyright 2015 Debbie Gallagher