Risk Management for ERP Implementations

No project is immune to unexpected events and setbacks, this is why risk management is one of the fundamental principles of delivering a successful project. ERP implementations in particular are susceptible due to their complexity and nature of impacting key operational processes. This article explores best practices for managing risks while implementing a new ERP system such as S/4 HANA.  

Most large organisations will have a standardised approach to how they manage operational and transformational risks. This includes key roles & responsibilities, reporting procedures, tolerances & thresholds etc. While many variations of risk management exist, they all fundamentally have the same process at their core; identify future occurrences, choose how to respond to them, allocate ownership, and continually track until it can be closed. Ensuring the project’s risk management strategy complies with corporate guidelines from the outset will prevent re-work and re-calibration later when it’s in flight. 

The famous quote “Those who do not learn from history are doomed to repeat it” may have been written about war, but it’s just as relevant to transformation projects. During the pre-project phase consulting lessons learned from previous initiatives (both within the organisation and externally too) is one of the best ways to proactively identify risks to successful outcomes. Holding a workshop is a common way to focus on this activity by bringing SMEs together to collaborate and brainstorm. Some key points to consider for SAP S4/HANA implementations include: 

  • Wrong balance of customisations eroding the business case 
  • Custom code being incompatible with the target operating model 
  • Loss of data through the migration and reconciliation process 
  • Compromised system performance or resiliency 
  • Impacts to data security 

Every risk should have an actionable mitigation plan which reduces its impact and/or probability. For example, if teams identify the implementation could be delayed by other in progress change projects, a cross functional workshop should be scheduled to capture the key dependences and these be incorporated into the project’s plan. 

Defining accountability for risks is critical. If you identify a threat and set up a plan to combat it, it can all be in vain if you don’t allocate someone to oversee it. Deciding that the QA team will ensure that test data is available and fit for purpose for example is not specific enough; a named individual should be identified who is the point of contact for tracking, mitigating, and reporting the risk. 

Considering an ERP implementation such as S/4HANA? Integrated Cloud presents CloudCube, a SaaS application that is designed to reduce risk, improve transparency and governance by bringing automation and a consistency to PMO delivery. This includes pre-identified risks with remediation plans allowing system integrators and project teams to hit the ground running with their risk management strategy.  

About the author

Michael has been part of Integrated Cloud's journey since 2013 and has worked as a key resource on several large transformation programs for clients all across the world. Michael is Head of Product Configuration, meaning he uses industry knowledge and expertise to head up the team that implement changes to CloudCube using the CloudCubeDNA low code application builder toolset.