Making Sense of an ERP Failure

air forceIn December we wrote about the inadequate leadership and mismanagement that led to the $1B U.S. Air Force ERP failure. Surely, poor communication and dishonesty were at fault but what else can be said about this IT disaster?

As with any ERP failure, disaster can be traced back to a number of early warning signs. The Air Force’s business process reengineering (BPR) efforts, in particular, lacked the acumen and decisiveness that leads to benefits realization and high ROI.

Seven years ago, when the Air Force began the Expeditionary Combat Support System (ECSS) program, it had business process management on the mind and hoped to streamline the process of collecting and analyzing logistics data and thus improve weapons systems availability. Unfortunately, ECSS has provided no improved military capability to date.

Following are three business process reengineering errors that led the ECSS project team astray quite early in the implementation process:

1.    Failing to integrate disconnected business processes across multiple locations. Business processes evolve over time to meet the unique needs of individual departments and locations. Eventually, these processes can become inefficient to the enterprise as a whole. When optimizing its business processes, the Air Force should have focused on how processes could work together to make the entire enterprise fully functional and efficient.

2.    Assuming technology automatically enables business process changes. Implementing a new ERP system without first defining and optimizing business processes almost always leads to poor ERP ROI and, in the worst cases, can cause ERP failure. The Air Force assumed that software best practices would lead to process changes suitable for the entire organization. This assumption caused the Air Force to overlook the proven approaches of the defense industry on a whole and ultimately derail the project.

3.    Diffusing responsibility for business process reengineering. A single entity should be responsible for defining business processes because when something goes awry or there are questions about customization, it will be able to provide answers. Senior leadership should also be held accountable for errors in business process definition. Unfortunately, the Air Force’s senior leadership team was seemingly unwilling to push business process changes or take responsibility for poor documentation.

If the Air Force had been quick enough to recognize these errors before the project became unsalvageable, their financial losses might not have been as steep. Moving forward, however, the Air Force would be wise to document and optimize business processes before placing their hope in new technology.

Learn more by downloading our white paper, Lessons Learned From a Government ERP Failure and stay tuned for more ERP failure and success analysis in our 2013 ERP Report (to be released on February 20)!

Written by Jennifer Aldrich

As a creative and analytical-minded digital content strategist, Jennifer is experienced in writing, data analysis, communication strategy and social media. As the Marketing Lead at Panorama, Jennifer supports all of the company’s marketing and content development initiatives and regularly writes blog posts about best practices in organizational change management and other ERP implementation components. Jennifer holds a BA in Public Relations from Colorado State University.

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