Taking the Risk Out of ERP

WASHINGTON (04/04/2000) - A quick review of U.S. General Accounting Office reports published last year reveals the titanic struggle the federal government is having with its financial management systems. Indeed, combine the antiquated software with rapid changes in accounting standards and it's easy to see how any agency chief financial or information officer would be pushed to the edge of sanity trying to keep the systems running, let alone operating smoothly.

Though financial management is only one aspect of an enterprise resource planning system, ERP is quickly becoming the enterprise application of choice for upgrading government accounting systems.

Years from now, ERP software will be pervasive in the federal government, but agency information technology and financial managers need to tread cautiously when selecting and implementing these systems.

ERP software has been around for years, yet only recently have commercial ERP packages from companies such as Oracle Corp., SAP AG and PeopleSoft Inc. appeared on the radar screens of federal CIOs and CFOs.

Properly implemented and managed, ERP can provide federal agencies tremendous benefits in productivity and manageability. However, if you follow the IT trade press or other business publications, you're probably aware of the dangers associated with ERP implementations that are improperly managed or poorly specified. Too many times, these implementations become delay-plagued money pits that fail to meet the organization's needs.

With this in mind, there are ways to minimize your exposure to these types of consequences when moving forward with an ERP implementation.

First and foremost, carefully screen the company that will implement your ERP system. These IT service providers are just as important -- if not more so -- to your project's success as the software company that developed the product.

The implementer should have experience implementing ERP in other agencies, have proven implementation methodologies and have impeccable references.

Second, minimize customization. ERP systems are complex enough without injecting extraneous custom requirements. Some customization will be inevitable, but to maximize your chance of success, keep it to a minimum.

Third, specify your requirements carefully and keep on top of the contractor to make sure all are met. By staying focused on the core specifications, you help assure that the finished system will meet those specifications.

Fourth, ensure your staff is properly trained to use the system. Proper training is overlooked too often.

Although these suggestions are by no means complete, they hopefully can point you in the right direction. With the Year 2000 bug behind us, ERP implementation should become much more common. As a taxpayer, I would prefer to read about the success of these endeavors in FCW rather than their failures in GAO reports.

Plexico is vice president and chief technology officer at Input, an IT market research and marketing services firm.

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