A norwegian customer won a compensation case against an ERP implementation partner after the customer terminated the parties’ agreement on the supply of a new ERP. The customer was compensated by the Norwegian district court assessed at 288 mNOK (36,7 mUSD). Originally the contract was worth 120 mNOK. You can read the complete story here http://www.selmer.no/en/nyhet/felleskjopet-agri-wins-district-court-case. The court decision is expected to be appealed.
Luckily this was NOT a Dynamics 365 implementation, and the customer is actually replacing the failed ERP system with Dynamics 365. The reason why I wanted to write about this story is that it has implications on how much risk and responsibility an ERP implementation partner can take. A major part of the ERP partners are smaller companies with less than 100 employees, than cannot take the risk of getting into such a situation. There are always problems and risks that is beyond what a ERP partner can control. Partners are not the developer company of the standard software. They are implementing, and in some cases adding additional extensions. Also the cloud based software are running on azure that is beyond the control of the partner.
How can this change partners behavior? Partners are changing towards becoming verticalized trusted advisors, but with limited responsibilities. We can give recommendations based on what we know about the software and how to use it efficiently but the costs are more on a T&M(Time and Material) basis. It will more be the customer them selves that is responsible for the implementation and time-tables.
Some customers will not accept this change, but other do. There are currently resource constrains in the Dynamics 365 partner channel and we partners avoiding customers that takes a back-seat approach towards their implementation projects. The sales focus will change towards those customers that take more of the responsibility themselves, and that do understand to take a more dynamic and agile approach. A 400-page requirement document is not a good start for an ERP project, as we see the digitalization possibilities are accelerating. We also see that customers don’t run a 2 year ERP implementation project before going live. They run a 90 days project to get live with only parts of their requirements. The project then takes on other areas and they extend their use of the Dynamics 365.
At the end, I include some trusted advisor recommendations that I think can inspire anyone that is about to start a project.
4 thoughts on “Failed ERP implementation will change partners to become trusted advisors.”
Agree with the post however careful with putting “Quality” as the last point as that might be the downfall of the whole project.
I agree that quality is important, but there are many levels on that from perfect to “good enough”. If quality issues are too severe, then the project delivery is not performed. MVP (minimum viable product) is a concept I like, and see it on the following video on this : https://www.youtube.com/watch?v=0P7nCmln7PM
Agree, it’s about building a minimum viable product while at the same time thinking of the long term goal of the client and not jeopardizing future upgrades or maintainability of the solution. In ERP terms it’s usually postponing things to different “business releases” instead of trying to cram all requirements into a big bang.
LikeLiked by 1 person
Hi Kurt, 100% agree with this blog post. It might be win-win for both customer and partner to do an fast & agile time and material based implementation in stead of the traditional fixed price waterfall approach.Better to focus on setting up and working with functionality in the new ERP – not on producing big analysis reports about how things was in the old ERP.