Project Management in ERP projects: waterfall vs agile
ERP software, aka Enterprise Resource Planning software, is a software package that aims to support all business processes in a company in a single unified program.
An ERP system offers quite some advantages: a single source of truth, no spaghetti like mess of interlinked applications,…
Well-known ERP software developers are companies such as SAP, Microsoft, Salesforce, Odoo and many others.
Project Management Triangle
Project management is about balancing scope, time and budget. If one changes, so does one or both of the others.
Project management implementing ERP software
This article isn’t about ERP softwareitself, but about implementing it. ERP implementations are often large projects, especially if they’re green field projects.
The waterfall method
Traditionally they are managed in a classic waterfall way.
The project will more or less go through the following phases:
- Analysis: the as-is and to-be business processes are analyzed. The outcome is a blueprint of the to-be business processes.
- Implementation: The agreed blue print is implemented.
- Training: (Key) users are trained on the implemented solution.
- Validation: the key (users) validate the implemented solution.
- Go live: after a successful validation phase, the company goes live with the ERP solution, meaning the business processes are run on the new ERP system.
In a waterfall managed project, the scope is agreed and fixed and the timing and budget depend on the agreed scope. The advantage is that a company knows what it will get in the end.
The biggest drawback of this, is that user validation comes quite late in the project. Which means if something is not analyzed or implemented correctly, it is only known quite late and rework often is extensive.
Scrum or Agile
Scrum or agile project management aims to validate implemented functionality as soon as possible and aims to add functionality in an step-wise manner through so-called sprints. These sprints have a fixed length (4 weeks) and the scope of each sprint is determined based on priority and workload of the desired functionality (the so-called backlog).
In scrum, the timing and budget is fixed and the scope is flexible. The big advantage is that user validation comes very early.
The big disadvantage is that the scope isn’t fixed. In e.g app development this is less of an issue when adding features to a product, but in ERP this can be a huge issue: a company cannot go live with half of an order-to-cash process.
So, what now?
Though the waterfall tends to be the default method for ERP projects, a lot of projects will be run by a hybrid approach: overall the project will still be managed in a waterfall, but the implementation will be done through scrum.
This hybrid model counters the biggest drawback of the waterfall model through getting user validation early in the process.