ERP: It’s Going Nowhere Without the Buy-In of Your Users

A decade ago, in November 2001, the state of Idaho embarked on a huge Student Information Management System project that was set to improve the collection and maintenance of student data across the state. But instead of bringing needed positive changes, the $35 million project was terminated just three years later after it failed miserably to deliver on its promises.

You’d have thought Idaho would have learned some important IT lessons from that embarrassing failure, wouldn’t you?

Alas, the lessons were there but no one seemed to have paid any attention to them.

Instead, history is repeating, this time with an ERP project in the Idaho Department of Health and Welfare, according to a blog post by Brevard Neely, the marketing director for Panorama Consulting Solutions, an ERP consultancy.

Last June, the department began processing Medicaid payments using the new medical claims processing system it had built for $106 million with the help of vendors Unisys and Molina Healthcare (Molina bought the Unisys product line after the project began so Unisys is no longer a prime vendor). But this latest project, which took three years to implement, is now a year old and it’s still not working properly, according to a recent report from the Office of Performance Evaluations (OPE), a nonpartisan, independent office in the state that evaluates whether state government programs and agencies are operating efficiently and cost-effectively. The OPE does research for the Idaho Legislature, which asked OPE in February to look at the problems with the latest IT system.

The 71-page report found some glaring problems. “A series of design defects, provider enrollment issues, and a lack of coordination to resolve issues led to months of payment delays and inaccurate processing of claims,” the report states. “As problems continued to plague the new system, concerns were raised by providers and legislators about the amount of time taken to resolve defects and whether the system would ever function properly.”

That’s certainly not the way the project was supposed to progress.

But hold on. It gets worse.

“Problems with the system quickly surfaced and legislators and other state officials began receiving complaints from Medicaid providers. According to our study request, many Medicaid providers have been in crisis-laying off employees, limiting services, and identifying exit plans to no longer provide Medicaid services,” the OPE report continues.

Rakesh Mohan, director of OPE, says his agency’s reviews of the project and it’s problems is now in a follow-up mode that will dig deeper into what has happened and how it can be corrected. The next report is due in November. That first “quick evaluation” done in February and March was just meant to touch the surface, but now investigators will take more time to talk to the actual hands-on users of the problematic systems to find out what’s really been happening, Mohan says.

It’s all reminiscent of that 2004 Student Information management System debacle, Mohan says. “The state back then was trying to do a project for tracking the progress of students in grades K through 12. They spent $35 million but the system just totally collapsed. It just didn’t work. Then people asked us what went wrong and we did an investigation and issued a ‘lessons learned’ report.”

Apparently, it didn’t take.

“There were so many similarities between what we said about that project back in 2005 and what we said about the latest project in 2011,” Mohan said. “No one cared about the users. The users got neglected. Unfortunately, we sometimes don’t learn lessons. The same kinds of problems happened again.”

Now the clean-up begins.

“We are not IT experts in our office,” Mohan says. “We are generalists. But the kinds of mistakes being made by the leaders of these projects make our job easy. We don’t have to be rocket scientists to find out what’s wrong.”

So what can be done differently to fix what’s wrong and try to prevent such things from happening again?

“The good news is that when we presented our initial report to both the Department of Health and Welfare and to Molina, they both said that they will implement our recommendations,” Mohan says. “That was a good thing.”

Changing the psychology that got the project into this place will take some effort, he says. “I think the reason it all happened is that sometimes the easiest things that you have to implement can be the hardest to actually accomplish.”

When the project began, there was talk all along of including users in the process so their input would be brought into the final project. But over time the project schedule took on a life of its own and no one seemed to find time to get adequate input from users, Mohan says.

“People talk about getting user involvement, but then they cannot minimize their own roles,” he says. “They get busy with the project deadlines and responsibilities and they think they will eventually talk to those people when the time comes. And then it doesn’t happen. Or they don’t have a good sense of what the real users can bring to the table.”

Part of the problem is that project leaders can become isolated in siloes and they can forget that their ultimate responsibilities are to the users of the technology.

“Sometimes it’s as if they think, ‘what would an end-user know about the complexities of this IT system anyway’?” Mohan says. “They think that since a user doesn’t need to know how to program a system or how to create a microchip that they don’t have to talk with them. But a user knows how to use the system and if their needs are not met, they will not be happy or be able to do their job.”

Users weren’t adequately trained before the system went into use, which caused lots of problems, according to the initial OPE review.

Wow, what a fiasco.

The amazing thing is that it never had to happen.

A recurring pattern of these kinds of ERP meltdowns seems to be that the IT folks need to start remembering that the world doesn’t actually revolve around them. Instead, they need to remember that they need to actually be focused on the users and the business. Those are the people who need the tools the IT folks provide to serve customers, bring in revenue and keep the machine running smoothly.

Yet, companies seem to make this huge mistake over and over again.

But maybe there is some hope.

I’ve been talking with an enterprise user for an upcoming story here on CIO.com about how a large company decided to move from SAP to Oracle and as part of the process, they’re incorporating an amazing thing — they’ve empowered their users from the very start of the project. They have been asking their users to give their input, talk about what they need and to be part of the process until the project rolls out next spring. The results so far, according to the company, have been eye-opening and phenomenal.

Crazy?

No, that’s smart.

That means that on day one of their project they began earning and collecting goodwill and buy-in from the people who will use the application every day. They’re the same people who will help the company — or let the company down — if the stuff doesn’t work as designed.

That’s how it’s supposed to be done.

So, tell me, how is your company approaching your next IT project? Are you ready to be the next Idaho or do you want to get accolades from the boss after a smashing success?

It’s up to you.

Let me know your thoughts on this. I’m all ears.