A couple of bloggers experienced with ERP projects are making the claim that ERP implementations could be done as a fixed price product:
I’m sorry guys but I must disagree.
The example used is that of the US hospital group that has ‘productised’ (awful word, by the way) some of its heart surgery procedures. The extrapolation being that if it can be done for heart surgery, why not ERP implementations.
While they are both complex procedures, one of them (heart surgery) is governed by physical rules – physics and chemistry – but the other is subject to the far more complex and vague rules of people and social interaction. It’s the same reason why sociology and economics aren’t considered sciences – because when you deal with interactions of people, things are far harder to understand and predict.
When I was one of Microsoft’s Dynamics NAV implementers, we tried very hard to push fixed price implementations with a packaged solution set called RIM (Rapid Implementation Methodology) because it was supposed to appeal to smaller companies. But once you got into a project you uncovered complexities that the customer didn’t even realise where there, and so variation orders had to be added to the fixed price. Perhaps for a basic financial system a fixed price project might suffice, but not for other areas of business; for manufacturing implementations specifically, Microsoft recommended that a fixed price project should never be quoted.
SAP’s Business One pushes fixed price implementations, but we heard from companies who have gone that route that they get a basic system which then costs them real money if they want the system to run like they need it.
The day I hear a lawyer offer fixed price court proceedings, or an accountant offer fixed price auditing, then I will consider fixed price ERP implementations.