News & Views

News & Views is published monthly by 180 Systems. Our objective is to provide recent articles to our readers on business technology topics. In some cases, our blog contains a title with a hyperlink to a source article, a quote from the article and our comments. In other cases, we have provided a blog without a hyperlink for original content by 180 Systems. We encourage you to post your own comments. You can also access our blog by topic.

Common Estimating Mistakes

ERP, Project Management

May 16, 2011 from gannthead.com – “Here are some common estimating issues that can often negatively impact your project…

  • Padding…
  • Being overly optimistic…
  • Bad requirements…
  • Omission…
  • Different levels…
  • Being put on the spot…
  • Forgetting the risk factor…
  • Pressure from above…
  • Failure to involve the “do-ers”…”

180 View – Estimating is tough and we ask for it all the time from the vendors when assisting our clients in a system selection project. The vendors don’t have enough information when responding to an RFP so they rely on past experience based on similar sized projects and what they think the market will bear or on the budget of the prospect. Later we give the AS-IS business process and invite the short listed vendors to meet with our clients to get a better understanding of scope so they can give a better estimate on the implementation. Unfortunately the vendors often still don’t have enough information to get it right. We suggest that you ask the vendors to break out the project estimate by module and by task. You may find startling differences in their numbers. We also suggest that you ask the vendors to conduct a needs analysis prior to finalizing the deal. One of the objectives of the needs analysis should be a firm quote on the implementation.

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Oracle says ERP software woes are school’s own fault

ERP

May 31, 2011 from ComputerWorld – “Oracle has fired back against a New Jersey university’s claim it is responsible for a problematic ERP (enterprise resource planning) software project, saying school officials have embarked on a “scorched earth” litigation campaign in order to cover up their own shortcomings.

Montclair State University filed suit against Oracle earlier this month, saying missteps and delays caused by the vendor’s staff may end up costing the school around $20 million more than it originally budgeted for the PeopleSoft system. It ultimately fired Oracle from the project late last year…

It’s not clear how the dispute between Oracle and Montclair will play out, but in some cases ERP customers have won significant awards against vendors and consultants sued over allegedly failed projects.

Last year, a jury in Alabama awarded pet food maker Sunshine Mills $61 million in connection with a suit it brought against Ross Systems. The vendor is appealing the verdict.”

180 View – Montclair State University has about 16,000 students, which is a large number but does not seem to justify a $20 million investment. We wonder whether there was ever any business case to justify the investment.

In the article we read that “The vendor also asked the school for $8 million more than the $15.75 million fixed-fee implementation contract originally agreed upon.” There can be legitimate reasons when a vendor asks for additional fees if there is a change in scope. But the problem is often that the contract or statement of work is abysmally worded and lacks scope specifics. The vendors will define scope at high level and their prospective customers don’t know the troubles that can occur when things go badly.

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Avoiding project death by ROI

Business Case

February 6, 2011 from The Enterprise System Spectator – “…My hypothesis is that, due to a reluctance to say “no” directly, ROI calculations are often a convenient way to refuse projects that management simply doesn’t want to do. This “ROI trap” can take several forms:

  • Management argues the project budget is underestimated
  • Management argues the benefits are overly optimistic
  • Management argues the benefits cannot be connected to the proposed initiative…”

180 View – We disagree. The so-called traps are in fact exactly the questions management should be asking. Often the people who are driving the project want it to proceed for personal reasons. I say bravo to the hard-ass decision makers who ask the tough questions.

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