December 26, 2000, 4:33 PM — 1 Carefully analyze the problems and potential solutions. Sometimes a software implementation is not the only answer, or even the correct answer, for improving corporate performance, according to the report. In many cases, simple upgrades to existing software are more effective than new systems implementations.
One participant company was under the gun to increase inventory turns, according to Hal Sirkin, a BCG senior vice president based in Chicago. Rather than buy a packaged SCM solution, however, the company found after careful analysis that it could achieve the goal by reworking a few critical work processes. Pre-project analysis should include competitor and best practice benchmarks.
2 Scrutinize vendors and costs. A third of the respondents to the BCG survey said they believed their vendor encouraged unnecessary spending. One in five respondents who had implemented ERP or SCM solutions said they could have achieved the same business value for much less cost.
3 Divide projects into manageable pieces. According to BCG's study, the average size of projects with a strong positive outcome was $10 million, while the average for negative outcomes was $90 million. Said one survey respondent, "Divide and conquer.... Do it piecemeal or none of it will be done right."
4 Know when to stop. Establishing clear metrics is one key to success. At the end of each step, "IS personnel have to work with business managers to figure out whether the next phase will add sufficient value," according to the report. Twenty-three percent of respondents identified "lack of a well-defined endpoint" as a contributor to overspending.