Tuesday, October 01, 2002

Large system implementations require organizational discipline

Drew Rob, writing for Datamation, has a good case study of a $22 million implementation of Peoplesoft ERP and procurement applications at the City of Los Angeles. Although there were significant issues and complaints about the new system, a post-implementation audit found that nearly all of the problems were with users and entire departments not adhering to City policies. The project team implemented the new system "by the book," but it appears that large numbers of users hadn't been reading the book to begin with. As Robb points out, "Those complaining … were actually moaning about their own processes. PeopleSoft [was implemented] in accordance with mandated city policies and processes. Yet many within the city were not in compliance."

I often complain about the poor state of software quality. However, this case study illustrates that large system implementations often fail not because of software deficiencies but because of lack of organizational discipline. Nevertheless, this story does have a happy ending. After additional post-implementation work to improve organizational disciplines, the City of LA was able to cut check processing staff in half, cut warehouse staff by 40 heads, reduce inventory from $50M to $15M, and give each City vendor a single point of contact. Furthermore, LA saved $5M a year in contract consolidation and significantly improved the number vendor discounts taken for timely payment.

Read about the case study in Datamation.