This is a true story. The company name
has been changed.
Background
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.
The situation
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.
Action taken
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.
Go/no-go decision
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.
Post-go-live review
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.
Conclusions
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
