The worldwide cost of failed IT projects could be as high as 3 trillion dollars, reported ZDNet analyst and columnist, Michael Krigsman.
It’s an astounding figure to consider and not the only number related to IT failures that is bound to raise eyebrows. Roughly 18% of 2012 IT projects failed according to the Standish Group (“Chaos Manifesto 2013”). Each year, literally tens of thousands of scrapped projects cost companies giant sums of money.
What’s not needed?
One of the most significant IT projects most companies will undertake is a new accounting software implementation. A project failure related to the financial management system of record can be a catastrophic business event, so it’s important to take the right steps to maximize your chances of success.
A smooth accounting software implementation does not require a bevy of on-staff tech gurus squirreled away in a temperature-controlled server room the size of a football field. Regardless of what Super Bowl half time commercials show us, it’s just not a hard and fast requirement. In today’s market, skilled experts are easily available on a contract basis for companies of all sizes and across all industries.
Huge financial reserves aren’t needed either. Smaller organizations are often at an advantage when it comes to IT projects. They usually have fewer integration challenges and more flexibility in allocating resources. Tight budget constraints can actually help companies to focus in on the necessary return on investment for a financial win. Furthermore, many vendors offer flexible payment terms through leasing or monthly subscriptions. Each of these options allows you to pay for software over time, while you are realizing the cost benefits of improved efficiency.
Purchasing and implementing software with success is really about the basics of solid project management. In the report I mentioned earlier, the Standish Group took a look at the companies who were getting it right. They studied their projects and found a number of common factors.
The top IT project success factors include:
- Executive management support
- User involvement
Each of these factors can and should be applied to your accounting software implementation.
Executive management support
All businesses have the goal of financial success, but often have competing visions within management to realize that success. Consequently, it’s important to have executive buy-in.
In an article entitled “Getting the Most Out of Your ERP System,” technology writer Rick Cook described the overall significance of executive support:
Input from the top is critically important. The reason is simple. Only the people at the very top can express their ideals for the company and if you don’t have that critical input about what the enterprise is doing and where it is going you’re probably going to end up charging off into the weeds.
Very few businesses, if any, can say that their key financial processes are as efficient as possible. For this reason, accounting software projects are often highly appealing to key decision makers. Or, at least they should be. Accounting software and ERP projects offer a big advantage: they are relatively low risk and high reward. Many IT projects are highly speculative and serve as their own prototype. This is not-so with accounting software projects where technology that’s new to you is likely to have been installed in dozens or hundreds of other businesses.
The increased predictability of the results of implementing new software is beneficial for determining the project’s potential ROI. Identifying ROI numbers can be an intimidating prospect. But it’s surprisingly straight-forward with accounting software purchases. (Check out our software ROI calculator to run some of your own test scenarios.) All accounting software automates repeated processes. Determining ROI is often as easy as asking software providers to provide data on the amount of time that can be expected to be saved in each functional area. It’s then a matter of applying your own knowledge of your labor costs to the time saved.
It would be hard to imagine remodeling a kitchen without asking the cook where they want the sink. But the recipes for software projects are often written without any input from the main users.
The core user group for most accounting systems will be internal staff. Of course, you also need to have project leaders who understand the larger corporate strategy and how the purchase fits into it. But it’s just as critical to receive input from front-line users.
Decision makers are often unaware of just how complex or repetitive some business tasks can become, simply because they’re often somewhat removed from more mundane processes. While you may have staff who also think it’s a good idea to turn the break room into a functioning bar, their input on taking steps to improve efficiency by fixing broken processes should be considerably more solid.
What does the Standish Group mean when it talks about “optimization” as a project success factor? Essentially, they are referring to proper planning and a tightly defined scope. A lot of projects, including software purchases, start with the best intentions, but end up running into issues that could’ve been resolved with better project planning and tighter project scopes.
Participating in a proper needs analysis interview is a great way to either establish or reconfirm the key requirements for your software purchase. A good needs analysis interview allows you to clearly identify baselines for your software purchase project, including its scope, cost, and timeline.
Another best practice for establishing your plan for your software purchase is to talk to experts early in the process. In order to accurately plan the scope, cost, and time expectations it’s good to talk to experts who can help you answer the following questions:
- What functionalities are available to you and what’s the specific business benefit of adding these capabilities?
- What is a purchase likely to cost to meet your goals? And,
- How long does it take to implement software, configure it, and receive adequate training?
Many software providers even provide this type of consulting free of cost. Whatever your company’s size and industry, there are software providers who can speak to your specific needs, share ideas on what your competition is doing, and help you establish a plan for a successful software integration.