Legacy data can result in ERP failure: Analyst

The latest instance of an SAP AG enterprise resource planning (ERP) deployment gone awry highlights the importance, after the software has been chosen, of the implementation process during which organizations cannot forget to handle with care the data that will actually be fed into the ERP software, said an analyst.

“It’s not a matter of just installing a new piece of software. It’s really about data and we can’t necessarily start from scratch with data. We have to consider all of the data that came before,” said George Goodall, senior research analyst with London, Ont.-based Info-Tech Research Group Inc.

How data from various systems gets imported is key especially given that systems, such as payroll, said Goodall, presents many “moving parts” with such things as payroll-specific terminology that can make for a challenging time capturing all this variability.

“How much data do you bring forward? How clean is it? And, how do you use it?” said Goodall.

Goodall said the very broad scope of an ERP deployment can also contribute to problems. Typically, ERP implementations entail migrating from one system to another. But sometimes there can be a number of disparate systems being integrated in a single fell swoop.

That said, a cautiously incremental approach is not always possible for a payroll implementation because, said Goodall, there could be a “patchwork of different regional systems in place” that would have warranted nothing less than a big bang implementation.

Recently, the Victoria Order of Nurses, which employs nurses and home support health care workers, implemented a new payroll system in January of this year that was meant to consolidate several disparate systems used for accounting and human resources. But the ERP implementation has caused many employees the headache of erroneous paychecks.

The Victoria Order of Nurses, on Tuesday, issued a statement that attempted to illustrate the sheer complexity of the deployment.
“An information technology conversion of this size, which involved a huge amount of data transfer, requiring specialized configuration of the computer software and of business process flows, requires constant fine-tuning,” read the statement.

The Victoria Order of Nurses said the ERP deployment is “progressing to plan” and that resolving issues is a “top priority.”

SAP Canada, in a statement to ComputerWorld Canada, wrote that it stands behind its software and that “SAP, along with the Victorian Order of Nurses’ implementation partner, is committed to the success of this innovative project that will ultimately help provide improved services to the Victorian Order of Nurses’ Employees.”

A spokesperson with IBM Canada Ltd. said it was “not appropriate” for the company to comment on a client’s business, in response to a request for comment.

Goodall suggests to companies undergoing an ERP implementation, after a software has been chosen, to not ignore the importance of managing the relationship between themselves and the implementation team.

“How do you know when there are red flags? How do you know if there are things going sideways? It’s a very difficult thing to negotiate,” said Goodall.

The perception of ERP failure depends on how a customer defines failure, said Goodall. A typical multi-year project can have up to five phases, where customers rarely get past phase three. But that doesn’t mean it’s a failure because the core functionality is there regardless of whether it is delivered as hoped or as was sold by the vendor, said Goodall.

Follow Kathleen Lau on Twitter: @KathleenLau

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Jim Love, Chief Content Officer, IT World Canada

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