Why communication is critical to implementing ERP

Many relationship experts will tell you that good communication is the key to keeping a marriage together. It's also one of the main factors in helping companies keep their ERP projects from hitting the rocks.

When successfully implementing ERP, companies must develop a detailed communication plan, Bill Baumann, an ERP consultant and expert witness at Panorama Consulting Services, says.

Baumann discusses why ERP implementations run into trouble, sometimes to the point of clients suing vendors. Panorama, a Denver-based firm that advises companies on how to select ERP vendors and implement systems, is often called in to provide expert witness testimony in ERP-related lawsuits.

Of the concerns that Baumann has examined in ERP legal matters, one that invariably comes up is organizational change management, which has many elements, although the biggest issue for implementation project success or failure is communication strategy. "It's people communicating within the organization as to what this new project is," Baumann says. "Why are we doing it, what are the purposes, what's the scope of the project and what are we trying to accomplish by putting the project in?"

Often, senior managers know the answers to these questions about implementing ERP, but do a poor job of communicating them down the line. Without a clear communication structure and strategy, those workers who will use the ERP system often can't get their concerns or comments about the project heard. "The communication is not only coming from the top down, but also from the bottom up," Baumann explains. "And that's one of the areas that we see in almost every suit. ... That component is missing."

Every organization should implement a formal communication strategy in order to avoid ERP implementation "divorce court." This communication can take many forms -- such as newsletters to users, email updates or town-hall-style meetings -- but it needs to be adhered to throughout the project's duration. "We've got to keep people engaged and excited about the project -- no communication means no excitement, and that's where one of the breakdowns occurs," Baumann says.