Project Management Body of
Knowledge (PMBOK) applied to
an ERP Project
Andres E. Diaz, P. Eng., MBA, PMP
Hunter Business Group Inc.
www.hunter-inc.com
ERP technology
• ERP systems are used worldwide regardless of company
size.
• AMR press release suggested that, by 2004, the ERP market
has reached $ 78 Billion in sales (AMR Research Centre
press release June 2000) and all of it requires
implementation.
ERP technology
• “Furthermore, those who have already
implemented report that 70 % of their
implementation have failed, have come over
budget or have been seriously postponed”
(“ERP Implementation Secrets White Paper”,
Michael A. Roman, Manufacturing Practices
Inc., 2005.).
• So why don’t ERP systems deliver what they
promise?
ERP systems: Is there something wrong with “the
system” technology?
• Most ERP technology embodies a
proven set of Logistics, Manufacturing,
Customer Relations and Financial
practices.
• When you embark in an ERP system
purchase you are implicitly and
explicitly accepting those practices as
the business process framework for
your firm.
ERP systems: Is there something wrong with “the
system” technology?
• Although the “best” package may have
been selected, why is that we still have
implementation problems?
• Everything seems to point to the approach
taken to manage the implementation
project.
Managing a project
• Identifying requirements
• Establishing clear and achievable objectives
• Balancing the competing demands for quality, scope,
resources, risk, time and cost to produce a quality
deliverable.
• Adapting the specifications, plans, and approach to the
different concerns and expectations of the various
stakeholders.
Defining effective project management.
• “Effective Project Management requires that
the project management team understand and
use knowledge and skills from, at least, five
areas of expertise” (PMBOK Guide, PMI)
– Interpersonal skills
– General management knowledge and skills
– Understanding the project environment
– Application area knowledge, standards
and regulations
– The Project Management Body of
Knowledge.
Project Management Body of Knowledge
• Project Life Cycle Definition
• Five Project Management
Process Groups
• Nine Knowledge Areas
Project Management Body of Knowledge
• Project Life Cycle Definition
–Project Phases
–Project Stakeholders
–Organizational Influences
Project Management Body of Knowledge
• Stakeholders’ influence
–The influence of stakeholder is high at the
project initiation. At initiation, the cost of
changes is also low.
–Those stakeholders who have responsibility
and authority in selecting the “best” package
are not the ones with responsibility and
authority in using it.
Project Management Body of Knowledge
• Stakeholders’ influence
–“Using” stakeholders come to exert their
influence in the intermediate phases of the
project life cycle (such as in Conference
Room Pilot mode), when satisfying them is
significantly more costly.
–Most methodologies correctly identify the
former group (“selecting stakeholders”) but
tend to ignore the latter one (“using
stakeholders”).
Project Management Body of Knowledge
• Five Project Management Process Groups
–Initiating
–Planning
–Executing
–Monitoring and Controlling
–Closing
Project Management Body of Knowledge
• Traditional methodologies tend to
emphasize “executing” and
‘‘monitoring and controlling”
process groups in detriment of
“planning” and, more importantly,
“initiating” process groups.
Project Management Body of Knowledge
• For instance, the PMBOK suggests that an outcome of
“initiating” is a Project Charter and a Preliminary Project
Scope Statement (which is an input to “planning”) instead of a
project plan (which is an input to “executing”).
– Most ERP implementation methodologies are “initiated” with a project
plan.
–“In multi-phase projects, initiating processes are carried out
in subsequent phases to validate the assumptions made
during Develop Project Charter and Develop Project Scope
Statement processes” (PMBOK Guide p. 43)
Project Management Body of Knowledge
• So what should be the scope of your ERP implementation?
–Although ERP technology is expected to deliver positive
results once implemented, results are delivered by processes
executed by individuals who may or may not use the
technology to carry their processes out
–Many ERP vendor driven implementation methodologies
tend to see the project scope and deliverables as
“implementing the package” instead of dealing with business
processes.
Forget about tools, techniques and the
PMBOK. What about people?
• Implementation methodologies depend on
people to function
– “Project team members are not dedicated to
the project 100%”
– “Senior management members can not agree
on the goals and metrics for success”
– “No time and money is spend on building the
team – people are just thrown together and
expected to work together from the first day”
Forget about tools, techniques and the PMBOK.
What about people?
• Are people issues in reality methodology
issues?
– Clearly, weak implementation methodologies
are more people dependent, i.e. super project
leader/consultant/user etc. syndrome
• However, the incorrect or no application
of “generally recognized good practices”
hinders success over a wide range of
different projects.
• 23
Project Management Body of Knowledge
• Scope Management
–Scope Planning
–Scope Definition
–Create Work Breakdown Structure (WBS)
–Scope Verification
–Scope Control
A sampling of commonly found implementation
methodologies
• “Information Technology (IT) will do it”
–Generic education for IT personnel with technical bias instead of
functionality applicability
–Current processes mechanics (as IT understands them today) are
programmed into the new ERP package
–IT educates users
–Limited involvement of the real process owners
A sampling of commonly found implementation
methodologies
• “Information Technology (IT) will do it”
–Scope focuses on completion of programs and not on process
improvement and strategic match.
–Overall project deliverable is technical in nature
–Go live with programmers making sure that the system (and
their programs) “works”.
–Programming and education budget may not be overrun but
expect low system utilization and inefficient business process
execution
A sampling of commonly found implementation
methodologies
•“Most Common”
–Generic Package Education for project team and others key
users.
–Some form of Process Simulation (Conference Room Pilot)
to identify gaps between package and “as-is” version of
business processes.
–Identified gaps (as the selected group understands them) are
programmed into the new ERP package.
A sampling of commonly found implementation
methodologies
•“Most Common”
–More education to those users identified as “super users” who,
in theory, are the people owning and keeping the system
current (T. H. Willis, p. 37)
–Scope focuses on reproducing the existing current state of
business processes and not on process improvement and
strategic match
–Go live with programmers making sure that the system (and
their programs) “works”.
–Expect budget overruns and very little process improvement
(but things look like before)
A sampling of commonly found implementation
methodologies
• “Don’t worry about it (or do it yourself)”
–Generic education
–Technical set up and system configuration done by
vendor or third party.
–Budget was kept low and may have been met but
your investment is significantly underutilized ((and
things still look like before)
A sampling of commonly found implementation
methodologies
• “Consultants’ dream”
–Discovery (lots of it)
–Massive documenting of current practices without any
benchmarking (non value added process mapping)
–Generic System Education for project team and others (lots of
it)
–Pre-configured Conference Room Pilot to sort out issues (still
too many modifications)
–Some refresher education
–Huge budget to begin with
–Go live (lots of consultants)
A sampling of commonly found implementation
methodologies
• These methodologies do two things (wrongly) in relationship
to scope definition and project initiation.
–First they look at using the ERP technology through the glass
of existing company functions and business processes, instead
of facilitating process improvement and re-alignment vis-à-vis
such factors as the firm’s marketing and manufacturing
strategies or the market place demanding the achievement of
goals and objectives not currently being attained.
A better implementation methodology
• The challenge of a better implementation
methodology is to implement a set of improved and
re-aligned business processes supported by the ERP
technology tool within budget and timeline. In order
to meet this challenge the project methodology must
include the following generic steps:
A better implementation methodology
–Business definition
–Logical system design
–Package Selection
–Essential Processes Model
–Process validation and training
–Final deployment and Go-live
A better implementation methodology
• Non PMBOK complaint methodologies use the CRP
sessions to identify mismatches and discrepancies
between the ERP system and the “as-is” vision of
business processes as understood by those stakeholders
performing them; a different scope begins to “creep up”
(hence the term “scope creeping”)
• The result is an expensive retrofitting exercise that ends
up consuming most of the implementation resources and
the ERP project’s success is seriously compromised.
Successfully Managing a project
• Identifying requirements.
• Establishing clear and achievable objectives
• Balancing the competing demands for quality, scope,
resources, risk, time and cost to produce a quality
deliverable.
Successfully Managing a project
• Adapting the specifications, plans, and approach to
the different concerns and expectations of the
various stakeholders.
• Select appropriate processes from Project
Management Process Groups.
• Applying the right combination of knowledge areas
to project activities in order to meet requirements.
Contact Information
• Andres E. Diaz, P.Eng, MBA, PMP
• Hunter Business Group Inc.
– Web Site: www.hunter-inc.com
• Office:1-905-477-9241
• Cellular: 1-416-721-9835
• Email: andres.diaz@hunter-inc.com