What is ERP Project Manager’s role in ERP Implementation?

Who is ERP Project Manager?

ERP Implementation is a very demanding project in terms of time, effort, and financial investment. Once it goes live, it becomes the backbone of operations in the organization. However, according to Gartner, 55-75% of ERP projects fail or don’t meet their intended objectives. Meanwhile, global consultancy McKinsey estimates that more than 70% of all digital transformations fail.

Weak project management is one of the biggest reasons for the failure of ERP Implementation projects. Therefore, the role of the ERP Implementation Project Manager becomes of great importance for its success.

In this post, we examine the details of a Project Manager’s role in ERP implementation.

What is ERP Project Manager Job Description?

It is not a part-time job. An ERP project manager needs to work closely with CTOs, CFOs, CIOs, COOs, and CEOs. The leadership of the organization. The project manager coordinates with business leaders to obtain clarity on project objectives. It ensures alignment of the project with business strategy. The profile demands confidence, assertiveness, and perseverance to remain focused on the project objective.

Based on the project objectives and desired future state, the project manager has to decide the blueprint for business processes to be followed post-implementation. It includes right-sizing the expectations of all stakeholders in the project and defining the project’s success criteria with the framework for its verification. However, the desired outcome cannot materialize without the continued support of the organization’s leadership.

The Project Manager must continuously maintain a perspective of overall business goals. It is helpful while reviewing current processes and visualizing the system requirements.

The project manager should contribute the inputs for improvements in existing processes and also ensure limiting the changes/ customizations in the system to maintain its integrity and stability. Further, He has to assert himself to prevail, where a proven business process is required, and the new system cannot be allowed to disrupt it.

What are ERP Project Manager Responsibilities?

The ERP project manager has a pivotal role in ERP implementation. It comprises several responsibilities. Following are the essential ones:

Project Management

Poor project management is the cause of most ERP implementation failures. There are several variables in ERP implementation. A structured approach, therefore, is indispensable for managing an ERP Implementation. The ERP project manager should have experience in leading ERP implementation projects. Following project management functions are critical for a successful ERP implementation:

System Requirement Specification (SRS): The project manager has to develop and update project requirements, scope, and timeline. It involves driving the requirements definition process to resolve existing pains and lay the support framework to achieve the desired future state. It includes identifying the scope, goals, deliverables, and required resources. Managing ‘scope creeps’ throughout the project.
ERP Project Team Formation: The project manager has to assemble and lead the ERP project team. The team has to comprise subject matter experts of each functional area of the business. This core team is responsible for defining processes and information requirements of their respective functional areas. Its team members will also be responsible for vetting that the stated requirements align with the organizational objectives and goals.
Implementation Methodology: The ERP Project Manager has to coordinate with the ERP implementation agency to evaluate and define the implementation methodology most suited for the organization in keeping with its culture and processes. The project manager ensures compliance with the implementation methodology by the teams. It is critical because this framework will be the guide rail for the implementation to a successful conclusion.
Project Planning: The project manager has to develop and maintain a project plan. It should define project timelines and schedule milestones to determine project deliverables. It should ensure the timely realization of deliverables and provide a clear perspective on intermediate value and benefits from major and minor project milestones. The project manager controls the project schedule, budget, and scope by monitoring progress. Tracking the project timeline, deliverables, and milestones achieved indicates project progress.
Project Execution: The project manager has to lead the project team to ensure the project’s success. The project manager should plan, schedule, organize, and closely monitor project execution and the activities of the project team. It shall include managing the day-to-day operational aspects of project implementation by defining project tasks and resource allocation.
Project Coordination: The project manager should convene and hold meetings with internal and external project team members and manage project teams by driving motivation, collaboration, and performance. Serve as a liaison between the internal team and the team of consultants to ensure continued alignment on goals, project priorities, and timelines. To ensure on-time achievement of project milestones, the project manager may also have to manage inter-team coordination with third-party service providers.
Testing & User Acceptance: Testing activity is planned, managed, and verified by the project manager. It ensures system acceptance before it goes live. System acceptance confirms conformance to the organization’s requirements and a smooth transition to the new ERP system when it goes live. Successful completion of user acceptance testing, end-user training, and go-live preparation ensures smooth go-live.
System Administration: The project manager initiates and recommends required business software solutions, user interface design, data integration, data migration, and metadata management according to the organization’s business requirements, strategy, and culture. The project manager ensures a smooth transition from old processes to the new ERP system solution. He also oversees/ performs routine housekeeping tasks. It includes IT Infrastructure maintenance, system updates, data backup, and restorations.

Project Governance

Activities of any large project need to be regulated, and ERP project is no exception. A project governance framework lays down the structure, procedures, roles, and responsibilities. The project manager enforces compliance with the project governance framework.

Project Governance Scope: It facilitates project issues management, including steering committee meetings, project status review meetings, etc. It also helps to identify and manage changes in processes that are critical to the success of the project. It includes giving direction to project activities in the context of business and its transformation.
Risk Management: The review mechanism in project governance dictates that the project plan should include project risks and countermeasures to mitigate them. The project manager has to monitor potential project risks, opportunities, and issues that may impact the project.
Project Budget & Cost Escalation: The project manager should monitor the project budget. The project manager should report any change in budgeted variable costs whenever a cost overrun is anticipated; it is necessary to take approvals for cost escalations.

Communications Management

Being aware of where we stand and where we are heading. A robust communication strategy achieves this and keeps all stakeholders on the same page. It enables all stakeholders to be alert and play a proactive role in the project. Following tasks provide the desired transparency:

Project status reporting: The project manager should regularly communicate the project status to the project’s sponsor and the stakeholder community . It comprises the project’s progress and current roll-out status. It should also include the declaration of major and minor milestone achievements and highlight the value/ benefit from it, to keep the project team’s morale and motivation high.
Issue resolution: In addition to routine status reporting, the project manager should escalate unresolved contentious issues to the steering committee with possible recommendations. Timely escalations prevent project delays and cost overruns. Mostly, cross-functional dependencies or those involving contractual constraints with the ERP implementation agency, to name a few.
Management Support: Open communication lines ensure continued support for the project from the leadership. It facilitates the implementation of changes in processes that can be affected with minimum resistance and disruptive consequences. Regular communication also ensures internal buy-in and maintains the focus of stakeholders on the organization’s project objective.

Change Management

Change is difficult to accept. No digital transformation initiative can succeed without a sound strategy for managing change. The responsibility for ensuring acceptance of the new solution cannot be left to evolve spontaneously. The ERP Project Manager has to address several challenges to affect the internal buy-in and the adoption of the new system. Following are the tasks that can bring about the desired acceptance of the change:

Stakeholder management: The project manager has to ensure the continued alignment of the sponsors and all stakeholders with the project objectives. Further, the expected impact of the project’s success on the company and them individually has to be continuously repeated to them.
Training and Orientation: Familiarity eliminates the fear of anything new, and ERP is no different. The project manager has to facilitate the familiarisation of all stakeholders with the new system through training and orientation sessions. These sessions enable buy-in by highlighting the benefits of the software system to the stakeholders.
Knowledge Transfer: The internalization of knowledge about the new system expedites its adoption. Developing in-house proficiency in the new system has to be achieved through the necessary training and mentoring of team members to acquire expertise and become internal trainers. Nurturing internal champions of the system through incentives and encouragement can achieve this. These champions create a knowledge pool of expertise about usage and realization of the full potential of the new system.
Documentation about the new system: Facilitating documentation about the new system builds trust and reliance on it. Documenting the project objectives, the system requirement specifications, customizations, configurations, process flow diagrams, and process steps does it resoundingly. It also helps the organization in the maintenance of the system, deciding future upgrades, changes/ additions in the software, and migration to other software solutions.

Arbitration

Negotiated Settlement: It is common to encounter disagreements while evolving the best solution for the organization. The project manager will have to negotiate settlements in such cases. It would call for raising unpleasant questions, demanding explanations, and taking stands for arriving at a most amicable settlement.

Escalation of Issues: On many such occasions, if the resolution is not acceptable to the project team, then the issues may have to be escalated to the steering committee for its resolution.

Prioritization of Requirements: Disagreements generally crop up in the area of the scope of the project. The ERP Project Manager has to prioritize the realization of the project objectives. Those customizations that are good to have but do not conform to the project objectives; such customizations have to be kept low on priority in the interest of timebound completion of the project. The realization of project objectives and value should remain the top priority. Digression from this path jeopardizes all three, namely, the achievement of project objectives, timely completion of the project, and value. The project manager should have the wisdom to differentiate undertake good-to-have functionalities as separate upgrade projects.

What are ERP Project Manager Skills?

A project manager wears multiple hats. However, the top three skills necessary for a project manager’s role are:

Project Management Skills: Project management skills are the core skills required for the profile. Functional knowledge of business processes is an added advantage. However, proficiency in Project Management skills can compensate for lack of functional knowledge. Moreover, poor project management skills can easily ruin the positive impact of a good understanding of business processes any day.

Leadership Skills: Leadership skills are essential for driving the implementation. Introducing new processes and workflow changes demands skills and experience for motivating and persuading changes within the organization to fulfil the organization’s needs.

Negotiation Skills: The role demands continued negotiations with all stakeholders to keep the project on course. The project manager negotiates the best terms with the project sponsor, the leadership, the core team, the end-users, and the ERP implementation agency to steer the project to meet its desired objective. It involves patient negotiations to extract the best terms in the interest of the project. Therefore, proficiency in negotiation skills is a decided advantage.

Conclusion

The ERP Project Manager plays a pivotal role in the success of the ERP Implementation Project. His leadership skills give direction to the project team, preventing it from adopting a tunnel vision and losing focus. The team may forget the project objective in the process. The PM empowers the team to converge its efforts towards a singular goal through his people, leadership, and organizational skills.