Financial Systems

ERP System Implementation Project Management [Video Q&A]

In this video, one of our senior ERP system implementation project management experts, Dan Lauten, sits with David Lewis for a discussion about selecting a project manager for an implementation. Watch to learn why common resourcing approaches often set companies up for failure, so you can start your implementation on the right foot.

We’ve posted the full discussion below along with the full audio, but if you’re in a rush, you can also skip through the playlist for shorter segments featuring key questions.

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We’ve also included the full transcript (with time stamps) below for convenience. Happy viewing, listening, and/or reading!

Introductions (00:00 – 03:00)

David Lewis: Welcome to this riveting webcast, and it will be riveting. What we’re going to be talking about is search, selection and implementation of an ERP system. And specifically the benefits of using a third-party project manager to lead this extremely challenging effort. And a corollary of that, by the way, is why it would be disastrous to do otherwise in our view. So, I am David Lewis, I’m the CEO of 8020 Consulting. My good colleague, Dan Lauten, who’s an expert on this, will be joining us. And we’re going to start out by having Dan give us a brief overview of your experience in terms of project managing ERP implementations, types of systems, scope and the types of companies and industries you’ve worked in. Dan.

Dan Lauten: Okay. Thank you, David. Thanks for having me today. Throughout my career, I have project managed implementations for, several ERP systems, including NetSuite, SAP, Sage Intacct, Microsoft Envision, QuickBooks. I’ve also led implementations for other systems, such as Concur for T and E, accounts payable, also for Cognos, Carta, Expensify, Softrax Revenue Manager and various other systems. And I’ve done that for a variety of companies ranging from small startups to large global companies in a variety of industries. I’ve also been called in to help fix the implementations that have not gone so well for some companies throughout my career, which has been a very interesting work.

David: Hmm. Okay. That’s great. So in other words, Dan is eminently qualified. To brag a bit about Dan’s background, he’s spent a considerable part of his career at Accenture doing business process optimization and also financial system implementations in large enterprises. He was part of the accounting and financial and financial systems infrastructure building effort at a large carve out of Accenture called Avanade, which was a joint venture of Microsoft, from there moved into senior leadership roles, first at the global consumer products company, actually a wine business, a global wine business, and from there has been a CFO at startups in that space. Since joining our company, his work has been focused almost entirely on financial systems and business process, project management and in the technology and entertainment space, including post-acquisition and post-merger accounting and financial system integration.

Using a Third-Party Consultant to Drive the Effort (03:01 – 06:58)

David: So I want to talk a little bit about why companies should choose a third-party consultant for ERP system implementation project management. I’m specifically interested in hearing your perspective on some better practices — some people would say best practices — for leading a successful implementation, but I’m also interested in what you’ve learned from clients you’ve helped, where you had to go in and remediate failed implementations. What, if anything, did these implementations, the not-so-successful ones that you came in once it was done have in common?

Dan: Right. You know, David, I think in every situation where I’ve been called in to help fix failed implementations, there’s been one thing in common and that is the reliance on that company to use an internal resource to lead the project management efforts for, you know, very sophisticated, very complex ERP implementations.

David: Okay. That’s interesting. And I’m wondering why that is because I know that many companies have the idea that they’d like to give the project management role– It could be one of the company’s IT project management staff, it could be that they pull somebody out of a full-time finance or accounting role who, you know, they view as bringing some institutional knowledge to the design and implementation process. So why doesn’t that work?

Dan: Interesting question. And a lot of companies do assume that that’s the way to go. Pull somebody from the internal resources to lead that implementation, but it’s really not a good idea. And I’ll tell you why. There’s two main reasons. Number one, a project management of an ERP implementation is a very demanding assignment, and it requires a hundred percent of the attention of the person leading that implementation in order for that implementation to be successful. So if you’re going to pull somebody out of a full-time role and also assign them a full-time role as the PM, for something that’s very complex and very demanding, you are essentially going to be setting that person up to fail, not only in their previous job as Controller or Director of Finance, but most likely at leading this implementation. It’s just really hard to pull somebody in two different directions at the same time.

Dan: And you know, you’re also going to pull that person away from their regular duties. So they’re not going to be able to attend to their direct reports and others they support the business. And therefore, you know, others are going to lose confidence in that person in their regular duties. So the other thing is that successful implementations require the skills and expertise of a very seasoned project manager. And when I say seasoned project manager, I mean somebody who has worked extensively with software developers, implementers, the VARs and cross-functional groups such as IT and business intelligence within your organization. That person who’s leading that implementation has to have experience with transforming, mapping, migrating data, designing processes, procedures, reports, and developing content for the user acceptance testing and also for user training as well. And most importantly, you need somebody who has got very strong PM skills to lead that complex engagement and without having that in place, again, I think you were setting yourself up for a failed implementation. It’s virtually impossible to find one person who has all of those PM skills and has also risen the ranks in finance and accounting. So it’s just very difficult to find that– all those, all those particular skills in one person.

Using a Qualified, Internal, Full-Time Resource as a Project Manager (06:59 – 09:45)

David: Okay. That’s interesting. So let’s just pose a hypothetical. Let’s say that I have a senior member of my finance staff who does have strong project management skills. Somebody who’s led other ERP implementations in the past. So they have past experience doing that. Would– in that case, would you recommend assigning a project management role to them if you could successfully back-fill their current position?

Dan: I wouldn’t recommend that because, as I said earlier, the PM role is a full-time responsibility. And also transitioning your role to somebody else is going to be very time consuming. So let’s say if I’m the Controller or Director of Finance, and I’m setting up somebody else to back-fill that role so I can take over the PM responsibility. I’m going to get pulled in a lot of directions at the beginning of that project. And that’s a really critical point in a project, when you’re setting it up. And it’s just going to be a big distraction for that person, and it’s going to lead to burnout. It’s going to be very frustrating for the direct reports of that former Controller or Director of Finance and potentially lead to a failed implementation. So, you know, and also I think people get used to the relationship with their Controller or their Director of Finance.

David: Sure.

Dan: If there’s an issue down the line, they’re going to come back to that person and try to get their help to resolve issues, and it’s going to pull them away from that project. So another thing I’ll say too, David, is, you know, the nature of the role of a PM is somebody who has to at times, I guess, be the bad guy or the bad gal in this situation. They are assigning tasks to employees at all levels to get the implementation done. So people at all levels, so their direct reports, people who are senior to them in the organization, and it puts that person in a very awkward position. Because now you’re assigning responsibilities and making sure those things are getting done. And you’re communicating with people who are potentially seniors in the organization. So it just, it’s very awkward for someone to step into that role.

David: That makes sense to me, somebody once said that being the project manager of an ERP implementation is no time to be taking new friend applications because you won’t make many.

Dan: That’s very true.

David: And the other, the other is, you know, sort of the tyranny of the urgent over the important. And what I’ve seen is that, you know, if there’s an emergency or some urgent need state that involves a day-to-day transacting of business, people are just going to get pulled back into it. I would say that my observation reflects what you’ve just indicated.

Using Internal, Non-Finance or Non-Accounting Employees to Manage the Project (09:46 – End)

David: What if a company uses a non-finance or non-accounting employee to lead the implementation? So that would be for example, an IT resource who has project management experience, they understand the infrastructure backbone of the company, and they’re not going to be distracted by the day-to-day rigors of the accounting and reporting group’s responsibilities. So could that work?

Dan: Yeah. I’ve seen companies do that. And they do that when they assume that an ERP implementation is simply taking some data, transforming it, uploading it to a new system, maybe integrating their CRM system or accounting software with the new system. That’s not really what ERP implementation is.

Dan: When you think about the, you know, when you think about the end user, right? Typically it’s the accounting and finance team. And an ERP implementation is not simply just an advancement of technology or a change to new technology or something that’s shiny and new. I mean, it’s going to involve reengineering accounting, processes, procedures, controls, and it’s going to completely– it’s going to completely change the way accounting and finance professionals do their job on a day-to-day basis. So they are the administrators and the users of the system. So you need a resource to project manage your implementation who has a very strong finance and accounting acumen, as well as those PM skills I talked about earlier, if you want to be successful with your implementation. So a lot of companies do go that route. I don’t recommend it for those reasons, so.

David: Okay. Thank you. So if I think about the implementation, you have a software company, right? And so a lot of the VARs that are referred as– let’s say they’re the technical integrator. So you have the technical integrator and then you have the software company itself. Sometimes the VAR will actually have project management people that they would seek to, or would have historically, put in charge of the implementation. How does that work versus what you’re talking about is a more optimal solution?

Dan: I wouldn’t recommend that approach either, David. If you think about what the PM is doing, they’re representing your company, the company that’s doing the implementation. They’re– I would call them the conduit between the company and VARs and software developers or the software company. So that PM needs to be acting for you, for your company. And they need to have a thorough understanding of your business goals, your business needs, the direction that business is going in, and they need to represent you, the company. So I think by assigning that to a VAR or software company developer or a PM on that side, you’re not going to get the best representation from the project management effort.

Dan: So I would recommend that you, what we just discussed, you select an independent third-party project manager to lead the implementation. So that person is going to be your best representation, or represent you, the company. You’re not going to be pulling somebody off of your team or try to pull them in multiple directions to lead an implementation while still doing their old job. And you’ll be assured of getting somebody who has project management experience that knows how to lead a complex engagement, has also a high degree of finance and act and accounting acumen. And assigning that person as the ultimate, I guess, person who’s going to drive that implementation to a success.

David: Okay. That’s great. Thanks, Dan. It’s been great talking to you today. Let’s reconnect soon. Shall we?

Dan: Love to. Thank you.

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About the Featured Consultant

Dan has 20+ years of global finance and accounting experience across multiple industries. As an Accenture alumnus, he has over 14,000 hours of project management experience in the areas of Business Process Development and Re-engineering, Systems Integration, FP&A as well as M&A due diligence and post-acquisition integration. Throughout his career, Dan has created finance and accounting processes, implemented systems and built top notch finance and accounting teams for several business start-ups and acquisitions worldwide including Avanade, a joint venture with Accenture and Microsoft where he also served as VP of Finance for the Americas and Asia Pacific. Prior to joining 8020 Consulting, he was VP of Finance and Continuous Improvement for the 2nd largest wine company in the world. Dan holds a Bachelor of Arts degree from Texas Tech University, a Masters of Commerce degree from the Burgundy School of Business in Dijon, France and an MBA in Finance from Loyola University of Chicago.

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