As is happening with almost everything in business, COVID-19 is having an impact on ERP software systems and digital transformation projects – particularly with respect to interruptions or delays in software implementation projects. Some companies are postponing their implementation or drastically reducing the scope of their implementations.
While halting or postponing an implementation project in the face of COVID-19 may make sense, there is a risk of losing the institutional knowledge accumulated by the integration team working on the project.
Consultants that understood your business requirements may not be available at a future date. There will also be additional costs associated with getting new consultants on board who have an understanding of where the implementation project has been, where it is going, and how the project addresses unique business requirements.
We went through the options facing users when we spoke at the virtual 2020 Digital Stratosphere conference in late April. We also explored how current contracts can be renegotiated and what should be included in new contracts.
Creating Workarounds in a COVID-19 World
For implementation projects in progress, instead of stopping them altogether, a better option may be to narrow the scope to essential modules or pieces of functionality. If you are moving forward with your implementation, whether with a reduced scope or not, you need to ensure you have reasonable workarounds in place to account for the project disruption associated with stay-at-home orders, social distancing, and consultants working remotely.
Diligently managing the scope and the cost of the implementation is more important than ever. It is imperative you focus on project governance. You need to ensure you receive project status updates on a regular basis, and that the updates you receive provide meaningful information that allows you to make informed decisions about the project.
Similarly, you need to focus on change orders to counteract the likelihood of scope creep and budget expansion. You may also be able to use change orders to “back-door” amendments to the implementation contract.
Protecting Remote Integration
Data security and maintaining confidentiality of information in an ERP software system has always been critical, but is now even more so with consultants working remotely.
Long before COVID-19 created worldwide problems, the ERP software system contracts we negotiated for clients always included clauses that detailed specific responsibilities for the vendor, the integrator, and the user. Now, with many people using their personal computers, the chances of a breach, whether by accident or due to a hack, have multiplied ten-fold.
With consultants working remotely, having a structure in place for coordinating a project is essential. Users need to incorporate proper nondisclosure provisions into their contracts, which take into account the increased data security risk. Important data could be compromised. It is critical to account for the consultants who have possession of your information, as well as the security protocols you have in place to protect your information.
Right now, users have more leverage over vendors and integrators than they realize. This is important with new contracts and existing agreements, whether those contracts are on-premise or cloud contracts. Renegotiating onerous provisions or provisions that no longer make sense in the current environment is critical to success.
Take a practical approach and begin with the premise that vendors are your partners. However, don’t talk with the sales team who sold the project. Have the conversation with a senior decision-maker who is empowered to say yes and can fully appreciate the value of maintaining a long-term customer relationship.
It may also be possible to arrange for discounts and fee adjustments for either cloud services or the ERP software system.
Create a Long-Term, Flexible IT Strategy
Now is a good time to evaluate your critical IT initiatives and prioritize those that are strategically important to your business. Digital transformations are often complicated undertakings with many moving parts. If you have questions or concerns, feel free to contact Taft. We are happy to share our experience, and can also refer you to highly reputable consultants.