Re-post Top Ten Reasons Etrm System Implementations Fail
Top five (5) of ten (10) reasons that energy (commodity) trading and risk management -ETRM –CTRM and Emissions Management Information System -EMIS solution implementation projects fail and how to avoid the pitfalls.
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1. Hard coded software rarely meets requirements; 80% is the avgerage fit to requirements requiring 20% (minimum) customization. This should not be a surprise to those that have been around software etrm implementations, rarely does software meet 100% of requirements. One of the big reasons for this is that everyone in the energy trading and risk management space does business differently and likes to look at it differently. The key is to manage the 20%. To avoid rouge projects insist on a fixed price for the implementation, if that cannot be accomplished an iterative approach, where payment is made at the end of delivered iterations, should help ease risks. Also look for new technologies that are easily configurable (no coding needed) versus customizable (requiring coding expertise).
2. Clients are not engaged in the project (client does not participate and expects all to fall on vendor). This is more common than you might think. Most companies expect employees to resume normal workload while implementing systems. This can be a recipe for disaster. Bottom line, the client and each stakeholder, ex. Trader, risk mgr. etc need to be engaged throughout the project to be sure he or her requirements get met. If you assume it will get done for you, it probably won’t.
3. Implementation team is not seasoned in subject matter. Etrm -Ctrm implementations are extremely complex, having well seasoned consultants assures that the gaps are well understood and quickly closed. This is pitfall for many of the vendors that stretch their implementation teams too far and a common pitfall for even the largest vendors. Be sure you know who is going to be on the implementation and get it in writing.
4. Scope of project is not well defined. A seasoned implementation team should always strive for clear and concise requirements however those are not always easily attained considering pitfall #2. Demand a scoping session that outlines and defines expectations and milestones. This will help not only the client but the implementation team as all strive for a way to measure success.
5. Vendor product is not fully integrated; In the Etrm-Ctrm, Emissions management information systems- Emis space many legacy vendors and their product have grown through acquisition. Be careful, just because they say that it is fully integrated it is probably not. This is where bugs and stress testing lead to implementation failures because the interfaces cannot straight-through process the etrm data. Look for a vendor who has grown their etrm software organically.