The top risks threatening major ERP and digital transformation programmes
According to new analysis from specialist change management consultancy Nine Feet Tall, across every sector, organisations are carrying avoidable risk that could be surfaced, quantified, and addressed early through a structured health check. The study found that nearly two-thirds of major ERP and digital transformation programmes are carrying critical delivery risk due to resourcing problems.
Change management is infamously tricky – but getting to the bottom of why some projects and programmes can just get stuck is similarly perplexing. There are many factors which continuously affect the progress of high-stakes technology investments, such as changes to the market, financial pressure, a change of sponsor, internal resources or challenges with third party technology providers.
Nine Feet Tall specialises in this field – and has supported many clients including Weetabix, PA Media and Culina to assess and address issues which are potentially damaging to their programmes. This process is known as a “health check”, and allows consultants to determine the status of a number of critical factors. Now, the firm has deployed that experience, to outline the recurring delivery risks, leading indicators of stoppages and common characteristics of high-performing projects.
Nick Paul, business analysis lead at Nine Feet Tall, said, “Drawing on our more than 20 years’ experience helping clients recover momentum and realise the benefits of transformation, this report highlights the warning signs, recurring risks and characteristics of the programmes most likely to succeed.”
Overall, the study highlighted three of the most frequent ‘red risks’ – the worst for grinding a transformation to a halt – as being resourcing, planning, and governance, reporting and scope. Illustrating the severity of the issue, a 64% majority of health checks indicated resourcing was a leading problem – while just over half also pointed to planning issues.
The 64% finding resourcing issues will be a particular concern. According to the analysts, resourcing is the hardest part to guarantee for a project. Delivery relies heavily on scarce specialist skills and capacity is often overstretched. Business-as-usual is often under pressure and usually wins, meaning there is reliance on a few key individuals which can delay design, decisions and testing – and at the same time, change fatigue can also sometimes lead to high turnover which constrains progress and presents risks to programme delivery.
In stark contrast, only 12% of health checks found ‘green’ strengths for a company to play to during their organisational overhaul. The leading three were budget, scope, and strategy and alignment – which various reports have shown are indeed key to a successful transformation. As a result, such a low portion of ‘green’ results further reinforces why so many transformation programmes may still fail.
Further drawing on independent programme assurance and health checks it has carried out across large-scale ERP, cloud, finance, HR and operational transformation programmes, Nine Feet Tall also found that some industry sectors carried more programme delivery risk than others. The worst were media (79%), healthcare (72%) and FMCG (71%), suggesting that organisations operating in complex, fast-moving or highly regulated environments are particularly vulnerable to issues that can delay delivery, increase costs and undermine the successful adoption of new technology.
Nick Paul, Senior Manager and Business Analysis Lead at Nine Feet Tall, concluded, “There are many factors which continuously affect the progress of high stakes technology investments, such as changes to the market, financial pressure, a change of senior leadership, internal resources or challenges with third party technology providers.”
