Let us consider a very common situation. A company has decided to invest in a new ERP system. The company has operations in 10 countries in several continents. The company also has local ICT management, expertise, and staff in each of the countries.
Let us also assume that the ERP system deployment boasts a very good business case. The payback time will be only a few years and the project’s ROI is high. In short, once the ERP system will be up and running, it will generate great value for the company. But only when the system will be up and running, not before.
Now, consider the project manager, who is responsible for getting the system up and running. Should she play it safe and plan for a series of roll outs or should she be bold and deploy the system simultaneously in all ten countries?
The traditional approach is to develop a global design (template in SAP parlance), implement the design and then deploy the resulting system in one country (usually the one in which the company has its headquarters). Once the system has been up and running for a while in the first country, the project will proceed by deploying (rolling out) the system in the other countries. Usually deployments proceed once country at a time.
The modern, or bold, approach is to implement the system once and for all and deploy it in all countries at the same time. The main idea is that since the ERP system will be the same in all countries (global master data, global processes and global interface standards), deploying will be as difficult in one as in ten countries. The deployment will also consist of same steps in all countries. There is nothing to be gained by postponing some deployments.
Th traditional – phased – approach has both benefits and drawbacks. The benefits have to do with risk management: by postponing most deployments, the project management will have more time for fixing bugs. The main drawback is delayed value generation.
The bold approach – deploying to all countries at the same time – will deliver more value to the company. All the systems will be up and running at the same time, the project can be terminated much earlier than in the phased approach. Also management can refocus its attention to the next project.
So, deploying once and for all seems to be better than deploying country by country. Why does the phased approach still prevail? Is it because it generates fatter profits for system vendors and consultants? Or is it because ERP system development is still so risky and error prone that the only way to get anything up and running is to deploy country by country.
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