How to save millions on ERP Implementation

My SAP implementation went 7x over budget, I’m ashamed to say this happened under my watch”, said the IT director of a large petroleum company during a presales presentation of Dynamics AX. “So we`re looking for an alternative”. “Are you asking me how much will it cost to implement Dynamics AX and more importantly how can we guarantee that the budget remains the same?”, I asked. Sadly enough this is not the only example of an “over budget case” during an ERP implementation. And this is also not related to SAP, since I’ve seen my fair share of over budget projects in Dynamics AX as well.


Your best interest or theirs?

The most interesting example of a project that went over-budget was an implementation built by a large system integrator for a very large online retailer;

–          The system integrator was happily implementing the system

–          Passed all the integral test cases.

–          Was delivering according to the planned schedule

–          Was delivering on budget

But something was off.

That something was revealed during a cigarette break, where the Solution Architect of the system integrator admitted to the PM of the customer that they put a lot of logic into Biztalk instead of the ERP system, simply because they couldn’t find the Dynamics AX resources but they had plenty of Biztalk developers. Luckily the PM of the customer was a smart cookie and Kaya Consulting was hired to give a second opinion of the implementation and Microsoft was hired to give a second opinion about the architecture. The outcome was “a whole new reimplementation is needed: If you would go live with the system it will do its job but you cannot change a single parameter or setting because of all the modifications made”.


How much do you want to save?

The ERP reimplementation was done by Microsoft Consulting Services with the help of Kaya Consulting. The system integrator was sued, but like most cases the customer lost that battle. So how do we prevent this from happening?

How do we not go over budget because of a bad effort calculation, planning or execution? The answers are simple:

  • Recognize that you, as the customer, have no clue about what it means to implement an ERP system! It is not your core business, nor do you want to make it your core business.
  •   Hire an independent experienced project manager, or if you want to appoint someone within the company please make sure that the manager actually has project manager experience. Having a PMP certification, being an Agile Scrum master, having a green belt in Six Sigma doesn’t mean a whole lot without the necessary experience.

See the above as “You want to buy a house. You can negotiate terms yourself with the other real estate agent but most likely you are better off with your own broker who knows the market, the area, history of the house etc.”

Those are not all the answers though because most of the people simply forget to hire the independent consultant;

You bought a house, made a good deal but when you get the house, you should inspect it.

  • You can do it yourself (Integral testing),
  • you can trust your PM (who has no clue about the technical state of the product)
  • you can trust the PM partner (but honestly, why would he tell you the truth?)
  • or you can hire an inspector

Which is the best thing to do. It will save you from going live with a system that is not build well and it will prevent you from doing emergency repairs while using the system. However, this consultant might find something that needs to be repaired or rebuild, which of course will cost you money.

This can still lead to an over-budget-situation. How can you solve this? Easy: hire this consultant right from the get-go of the project. He will keep the implementation partner in line and has only one interest in his mind: Helping You!

Looking for this independent inspector for your Dynamics AX implementation? Give us a call.


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