Implementing an enterprise resource planning (ERP) system can be a complex and challenging undertaking for small to mid-sized businesses. Despite the potential benefits of implementing an ERP system, many companies face significant challenges that can derail the project. Many businesses experience cost overruns, timeline delays, lack of user adoption, lost momentum and project rigor. This leads to a negative impact on the ultimate return on the investment and the overall bottom line. Fortunately, an agile ERP framework like Scrum framework can help address these challenges and ensure a successful implementation by nipping them in the bud or mitigating their influence. Let’s explore why ERP implementations often fail and how Scrum can help overcome typical hurdles.
Common Challenges in ERP Implementations
Before delving into how Scrum can help, it’s essential to understand the common challenges faced in ERP implementations. These challenges can range from technical, organizational, cultural, vendor and partner to planning and preparation challenges, negatively impacting businesses and organizations. The root cause stems from workflow management issues that produce uncertainties, obscure roles and responsibilities, subpar scope controls, poor understanding of the goal or “future state” and lack of accountability structures that drive momentum.
All these challenges can significantly impact the ability to produce desired outcomes from the new system. These challenges can be addressed by incorporating Scrum to ensure collaboration, consistent feedback loops and enforce communication and expectations. Businesses need to be aware of common implementation challenges and take steps to address them throughout the implementation process.
How Can Scrum Help?
Scrum is an agile framework designed to anticipate and address challenges commonly faced during ERP implementation projects. This agile ERP framework allows for flexibility and adaptability to change throughout the project’s lifecycle. It is achieved through daily standing-up meetings to ensure progress and address challenges head-on. This allows all team members to be aligned and accountable, enabling others to act in real time to keep work progressing. Scrum also breaks an implementation into sprints; this makes a release incremental and leverages an iterative process. A gradual and iterative approach allows a project to be broken down into manageable parts and learned from previous sprints. All subsequent sprints build off each other and enable the teams to understand, prioritize and adapt.
Another aspect of Scrum is to be transparent and add value. This is achieved through various meetings where teams brainstorm, reflect and get feedback from stakeholders. This allows for all involved to realign and avoid any unwanted surprises. One key idea in Scrum is knowing when you are wrong early to pivot and adapt earlier in the project lifecycle. The real value is added to the work and there is less wasted time and effort. Adding product backlog and sprint backlogs further clarifies the overall deliverable and what will be worked on during each increment.
By defining clear roles and responsibilities, facilitating collaboration through time-boxed events and introducing specific artifacts, Scrum enables teams to deliver value faster and more superbly.
The Waterfall Methodology for Addressing Challenges
The Waterfall methodology is a popular approach to project management. It is suitable for certain projects and circumstances needing upfront constraints. At the same time, Scrum is designed to provide increased flexibility, faster time-to-market, improved collaboration and iterative outcomes than Waterfall methodology. Both approaches are valid depending on the needs of the project and the organizational goals.
In addressing common challenges such as cost overruns, timeline delays, lack of user adoption and lost momentum, Scrum has a collaborative approach to address those hurdles. For example, Scrum’s focus on regular collaboration and communication within the implementation team can help identify and address issues earlier in the process, reducing the likelihood of cost overruns and delays. Similarly, Scrum’s emphasis on user involvement and feedback throughout the implementation can help ensure that the final product is more likely to meet end-users’ needs and expectations, leading to better user adoption.
When planning and preparation, Waterfall tends to require more detailed upfront planning, which can be beneficial in some cases but can also lead to inflexibility and difficulty adjusting to changes or unexpected challenges, Scrum, on the other hand, allows for more flexibility and can be better suited to complex or rapidly changing projects. Ultimately, the decision to use Scrum or Waterfall for an ERP implementation will depend on several factors including the specific goals and requirements of the project, the available resources and the organizational culture and preferences.
Benefits of Scrum for Accounting Solution Implementation
Here are a few examples of how Scrum can help address specific implementation challenges:
- Increased flexibility: Scrum provides flexibility in adapting to changes in requirements or priorities. As the team works in short sprints, they can quickly adjust their focus to meet changing business needs.
- Faster time-to-market: Scrum's iterative approach allows for frequent delivery of product increments, leading to faster time-to-market.
- Improved collaboration: Scrum encourages collaboration among team members, stakeholders and customers. This leads to better communication and alignment, which can help mitigate misunderstandings and miscommunications.
- Better quality outcomes: Scrum emphasizes the importance of continuous improvement and customer feedback. This leads to higher quality outcomes as the team can quickly adjust their work to meet customer needs and expectations.
These benefits are achieved by leveraging Scrum’s iterative approach, roles, responsibilities, events and artifacts. Scrum introduces the Scrum Master and Product Owner roles. They are responsible for ensuring the Scrum process is followed, facilitating team collaboration, defining/prioritizing requirements and ensuring that value is being delivered to stakeholders. These roles ensure that specific people are assigned to facilitate and guide the team toward a successful implementation.
Along with roles and responsibilities, Scrum has time-boxed events and artifacts. These events occur during the project to facilitate collaboration, inspection and adaptation. They include Sprint Planning, Sprint Reviews and Sprint Retrospectives. For example, Spring Planning focuses on defining the work to be completed, deciding which items can be completed during the Sprint, receiving feedback on the job, reflecting on the Sprint and identifying improvement areas. To tie all these events together, Scrum has a daily stand-up to discuss progress and impediments.
Lastly, Scrum provides artifacts to ensure that the team works towards the same goals and that progress is transparent. These items prioritize a list of features and requirements that will be performed throughout the project and a list of things from the Product Backlog that will be completed during the current Sprint.
Implementing an ERP can be a challenging task and many businesses face several common challenges that can lead to project failure. However, Scrum can help prevent these challenges and ensure a successful ERP implementation. The agile ERP framework’s flexible and collaborative approach allows businesses to address issues in real-time, which leads to reduced cost overruns, faster time-to-market, better user adoption and higher quality outcomes. Scrum’s focus on continuous improvement and customer feedback also ensures that the final product meets end-users’ needs and expectations.
The decision to use Scrum or another methodology like Waterfall will depend on the specific needs and goals of the project, available resources, and organizational culture and preferences. However, Scrum’s proven success in addressing common implementation challenges makes it a valuable approach for small to mid-sized businesses seeking to implement an ERP system successfully.