Risk analysis of major ERP investment.

  • The management team decided to replace outdated Core-IT systems with an ERP system.
  • The project is technically complex and a heavy financial investment.
  • When the financial results of the company disappoint, the CEO asks for an evaluation of the investment and a risk analysis of the project plan.
    • 3 countries are involved.
    • The management team does not support the project roadmap.
    • Feasibility of the project, both technically and financially, is key.

    ANALYSIS

    • Several work sessions with the management show that the company has no experience with complex projects.
    • Square Circle is appointed to make an evaluation of the investment and the proposed implementation roadmap.

    APPROACH

    • Preparation of three alternative implementation roadmaps, together with the project team.
    • Interviews with project stakeholders to identify business risk appetite and high level project risks.
    • Review of the budgets, together with the project team and the CFO.
    • Based on critical uncertainties in the budgeting exercises, a Palissde @Risk Monte Carlo model is drawn up for project cost and project planning.
    • The results of the analysis are presented.

    RESULTS

    • Preparation of three alternative implementation roadmaps, together with the project team.
    • The ERP Implementation will be implemented in phases, instead of the initially approved “Big Bang” approach.
    • Contingency Plan is an integral part of the revised plan.
    • The revised project cost and the Value @ Risk have been validated by the CFO and are within the risk appetite of the company.
    • The project team and the leadership team support the revised plan.