Did you know that in North America, studies show that over 50% of enterprise-type software implementations fail?You read it right ... greater that 50% of all software implementations fail. If you think that is bad, in Europe, the numbers are over 80%. Enterprise solutions are ERP, CRM, Accounting, GTM, and Trade Compliance. In fact, Gartner actually reported that the failure rate is 75%.So this begs two questions. Why? and, How can the risk of failure be reduced or eliminated?Firstly, let’s define failure. From a software providers perspective, there are three dimensions in which a software implementation will fail.
- The functionality implemented does not meet requirements specified or the implied work processes.
- The implementation took much longer than promised
- The implementation went significantly over budget.
Failure on any one dimension is noteworthy. Failure on 2 or more dimensions leads to grave dissatisfaction between client and software provider. The gravity of the failure will depend on how you rank dissatisfaction when the system is finally implemented.
3 Reasons why software solution implementations fail?
Poor Project Definition - In my mind, this is the most significant point of failure. Defining the project is not only about functionality and specifications. Foremost, it is about clarifying the process(es) that the solution is meant to address as well as the functionality required to deliver the needed outcomes. Yet process definition is usually ill-defined because it is difficult to enunciate.
For trade compliance, it is critical for the client and the solution provider to spend the time to clearly define the required outcomes, which include process, functionality, and requirements. To properly define the project requires selecting a vendor who understands the area of trade compliance and establishing a very close working relationship, right from the start, between the software provider and the client’s internal team. The solution provider’s ability to fit in with the corporate culture and compatibility with the internal team is possibly the most important element determining the success, or failure, of a trade compliance project.
Poor Project Management – Another critical point of implementation failure is poor project management. Poor project management occurs if the project is poorly defined or there is a disconnect between the implementation team members and a misalignment of roles and responsibilities. To underestimate this potential problem at the outset is to increase the risk of project failure.
For trade compliance, project management takes on special importance because it is an area that is usually a poorly understood within the organization. The knowledge base for the solution resides in the user community (directors, managers, and specialists) but they lack project experience. The internal IT resources, while possibly understanding project management, lack trade compliance experience, and the nuances related to trade compliance. This puts even greater need for the client’s internal team and the software solution provider to be able to establish a clear approach to how the project should be managed and the lines of responsibility and authority.
Poor Implementation Support – Bringing a project to successful conclusion requires the solution to not only deliver system functionality and process support. Success depends on the solution aligning with the user’s expectations and ability to use the solution effectively. Success is dependent on ensuring that the data supporting the solution is useable throughout the application, that the solution is intuitive and supports the user’s workflow, and that the users are well-trained on using the application.
To successfully deliver a comprehensive, automated trade compliance solution initial vendor involvement and support is critical. Trade compliance is about conformance with government regulations and agency filing requirements. It is held to exacting filing and reporting accuracy and requires that the supporting data is specific for these purposes. There is significant process complexity, and the solution needs to address this complexity in a simple and straightforward manner to achieve success.
The most important step to successful Automated Trade Compliance
Vendor Selection – Without question, who you select for your trade compliance automation partners will determine the level of success of your project.
Knowledge of trade compliance is fundamental to configuring and delivering great trade compliance solutions. Without reservation, I am comfortable saying that all trade compliance solutions providers have the knowledge and understanding of the requirements necessary to meet the trade compliance regulatory regimes.The critical differentiator between solution providers is their sensitivity to helping their client define, design, manage and implement their project.
9 Questions to ask yourself about a prospective solutions provider:
- Have they successfully worked with their clients on project requirements definition and work process design?
- What experience does the solution provider project lead have in the area of trade compliance and related global trade issues?
- Who is on the solution provider’s team that will work with your team? Are they compatible with your culture?
- How successful have their previous projects been in meeting their clients' expectations?
- How flexible is their solution in supporting the required work processes?
- How responsive is the solution provider to answering and addressing client concerns?
- What is the overall cost of the project?
- What guarantees is the solution provider willing to provide to insure a successful project?
- How successful were their previous implementations? Were their solutions a success?
Manual trade compliance is complex and labor intensive. Getting the right automated trade compliance solution should be simple.The ultimate success or failure of the automated trade compliance project depends on:
- the vendor you select,
- the flexibility and adaptability of their solution to support work process,
- the completeness of the solution (out of the box),
- the solution’s ease of implementation, and
- the on-going support the solution provider extends during and after the implementation.
If you are thinking of automating your trade compliance processes, I hope you will take these musings into account as the success or failure of your project will depend on it.About 3rdwave:
3rdwave simplifies global trade through automation. 3rdwave is a GTM platform that delivers total global supply chain visibility, minimizes manual data entry, streamlines business process, and provides contextual information enabling its users to make informed decisions to reduce global supply chain risk. It's a cloud-based platform that requires minimal IT resources for quick implementation. 3rdwave ensures that companies meet the highest levels of GTM execution and Trade Compliance conformance.
Ned Blinick is Chief Product Officer of 3rdwave.co. He has been involved in global trade for too many decades and he loves making the global supply chain simpler for everyone. If you would like to engage with Ned he would really enjoy the opportunity of communicating with you or your boss. He can be reached at (416) 510 8800 ext 234 or at firstname.lastname@example.org.