ERP Project Implementation: Risk Management Case Study

ERP Project Implementation: Risk Management Case Study

ERP Project Implementation: Risk Management Case Study

The present ERP Project Implementation: Risk Management Case Study relates to the risk assessment and management techniques developed in the project for company named Alfa Pneumatics. Alfa Pneumatics is a small and medium level enterprise which is indulged in the business activity of manufacturing of pumps and related products for the marine industry. Margins in this industry are very thin and looking at the future scope for the growth management of the company is looking for cutting down their cost in order to enhance their profitability. Hence in order to increase operating margins management is thinking to implement Ebizframe ERP system which would sort out problems related with supply process and would help in saving cost for the company.

Identification of various risk related to project

Some of the particular potential risk which can be identified in order to conduct ERP implementation project in Alfa Pneumatics can be listed as below:

1. Organisational fit

  • Failure to build an organisation wide design which would help in data integration
  • To redesign business processes so that ERP system can be implemented with high accuracy

2. Skill mix

  • Lack of training and development can lead to complete failure for ERP implementation system
  • Insufficient expertise in house or through external resource can become challenge for delay in project
  • Failure to chose ERP experts in order to combat with ERP implementation issues

3. Management hierarchy

  • Failure to get proper support from senior management
  • Lack of structure for management control
  • Ineffective communication hierarchy

4. Technology integration

  • Inability to have efficient troubleshooting techniques
  • Issues related to data transfer and integration

Risk identification technique and data required for risk identification

In order to identify various risks related with the ERP implementation project in the organisation interview method was adopted in which various users and top level management people would be interviewed. A set of questionnaire was prepared with listing for all the probable risk related to project and a scale of 1 to 5 was assigned with 1 as least risk and 5 as highest risk level associated with the project. Characteristic assessment method (CAM) for risk assessment is used which would take into account various sub task which need to be accomplish and these sub task has been categorised into various categorises based on the level of risk associated with each. A probable CAM for ERP implementation for Alfa Pneumatics can be given as below:


Figure showing the characteristics assessment model for ERP implementation

Communication plan for communicating risk

Risk communication plans are the tools to communicate views of the experts regarding the probable risks involved in the project so that users can be made aware about the probable risk and users can participate in the risk management process. An efficientrisk management plan for communicating essential risk inherent in the project is expected to contain the below four important criteria:

  • Education and information regarding risk and risk management strategies so that they can understand and contribute in organisational risk management
  • Change in user behaviour to combat from probable risk
  • Strong management commitment leading to overall organisation change
  • Communicating organisational and individual changes which project would provide

Project management as per risk management plan

Risk management strategies are an important part of any project management but for ERP project management it is of immense importance as if risk are not assessed and managed properly then it can lead to failure of whole project. Hence ERP project implementation projects should make a risk assessment plan before initiating the project implementation and each project implementation step should be carried out with assessment of risk and risk management plan should be built accordingly.

Risk monitoring strategies

In order to monitor probable risk sources related with ERP implementation project below strategies can be adopted:

  • To review various project objectives
  • To review resources assigned to project such as financial resources and time allotted for the project implementation
  • To get user feedback regarding project implementation and understanding risk inherent in the project from time to time

Procedure to follow risk management plan

In order to manage risk management plan for the ERP project implementation it is advisable to compare the ideal project objectives with the actual project achievements. Also there should be timely review for the various project elements which consist of higher risk so that risk related issues can be addressed and risk monitoring can be done timely in order to manage risk under certain level.

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