ERP implementation failures are seldom caused by software. They usually happen when governance, planning, process design, testing, data, training, change management, and go-live readiness are not managed as one coordinated transformation. That is the problem Pemeco’s Milestone Deliverables methodology is designed to solve: it breaks a complex ERP implementation into defined phases, deliverables, checkpoints, and measures of success so project teams can make progress visible and correct course before problems become expensive.
Using our implementation methodology as a framework, I delivered a workshop on managing ERP implementation projects at the PMI Summit 2021. My workshop, “Hershey Halloween Debacle,” dissected the causes of Hershey’s 1999 ERP implementation failure of its $115 million deployment of SAP, Manugistics, and Siebel Systems. That failure contributed to a 19% quarterly profit drop and an 8% stock decline. You can watch a teaser from the presentation below.
Today, the need for a disciplined approach to ERP implementation remains.
In my presentation and case study on the Hershey’s project, I studied the causes of the failure and recommended solutions that could have supported a stronger outcome. Those solutions are based on our firm’s ERP implementation methodology: Milestone Deliverables. Since 1978, we have used this methodology to deliver more than 800 implementation projects. It breaks a complex ERP implementation into 13 distinct phases supported by 14 actionable deliverables, giving teams smaller, measurable goals to work toward throughout the project.
Each deliverable is tied to tangible measures of success, including cost, schedule, and performance. These measures act as signposts—or milestones—on the route to go-live. At each milestone, project teams pause to assess whether they are still on the path to success. If they have deviated, they can take corrective action before issues become more difficult or expensive to resolve.
This article focuses on three phases that are especially important to ERP implementation success: project planning, business process mapping, and ERP systems testing and piloting. Each phase must be planned carefully, managed actively, and measured against clear deliverables. Without that discipline, poor planning and weak execution can quickly put the project at risk.
What Should an ERP Implementation Project Plan Include?
An ERP implementation project plan should function like a GPS for the project. It should provide a clear, turn-by-turn roadmap to a successful outcome and connect every major phase to measurable targets for cost, schedule, and performance. Because success is judged against those targets, each phase should include milestones and deliverables that show whether the team is progressing as planned.
Companies that use Milestone Deliverables build ERP implementation project plans around five core planning components:
Project Charter |
Defines the business reasons for the ERP implementation and clarifies the value the organization expects to achieve. |
Scope Statement |
Sets the project boundaries and translates the charter into measurable key performance indicators (KPIs). It should include:
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Target Budget and Schedule |
Assigns clear completion dates and cost targets to each project phase and milestone deliverable. |
Organizational Structure and Staff Requirements |
Defines communication lines, decision rights, responsibilities, and staffing needs. A clear structure helps prevent accountability gaps that can leave major issues unmanaged. |
Subsidiary Plans |
Turns major workstreams into focused sub-plans with defined tasks, MSFs, budgets, and schedules. Examples include infrastructure, risk management, resource management, scope management, and communications plans. |
What Are the Key Deliverables of ERP Business Process Mapping?
ERP implementation requires organizations to design their future-state operations alongside the software. As I have argued before, operational improvement should generally accompany ERP implementation. ERP software cannot make an organization significantly better unless the business is also committed to improving how work gets done.
Because operations and ERP are closely connected, business process mapping is a critical implementation activity. It defines how people, systems, and machines will process transactions in the future-state organization. These maps clarify how work should move through the business and how the ERP system should support that work.
The Milestone Deliverables process mapping phase includes four key deliverables:
Business Scenarios List |
Serves as the central organizing tool for process mapping. It catalogs each business process, associated artifacts (process maps, test scripts, training artifacts), and status. A well-developed ERP Business Scenarios List gives teams a shared toolset to track design and implementation of the future organization’s state – function-by-function, process-by-process. |
Blueprint White Papers |
Document the draft blueprint for each future-state business process. Each ERP Blueprint White Paper should:
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RAID Log: Gaps, Issues, and Risk Management |
This Risk. Action, Issues, Decisions (RAID) log provides one place to track, prioritize, and manage project risks and issues. Each issue should be defined, assigned, prioritized, scheduled, and monitored through resolution. |
Organizational Change Management OCM) Plan |
The OCM plan drives all of the workstreams associated with the people side of change to assure effective adoption. An organizational change management plan should address organizational alignment, change readiness, organizational design, skills gaps and job assignments, communications and training. |
How Should ERP Systems Be Tested Before Go-Live?
Through implementation, ERP systems should be progressively tested through a deliberately stacked set of pilots that incrementally test business process design and configurations, integrations, security, and performance.
Hershey’s 1999 ERP implementation is the textbook case study on the impacts of inadequate testing. Having failed to sufficiently test and surface issues with complex interfaces between its ERP and supply chain systems, Hershey’s failed to process shipments of $100 million of confectionary during its peak Halloween and Christmas seasons.
Far too many systems integrators and implementers dogmatically prescribe a single piloting and testing methodology. In our view, there is no single ‘best’ way to organize testing and piloting phases. Rather, the right methodology is context dependent. A company implementing core functionality with minimal integrations might test differently from a company with a more complex design.
Of course, there are certain ERP piloting principles that companies should apply when designing their methodology. Pemeco’s Milestone Deliverables implementation methodology organizes these principles into three distinct groups.
Conference Room Pilot Phase(s) (CRP) |
CRP piloting phases are intended to validate whether the ERP software can handle the most common business scenarios across each functional department. Core team members participate in the CRP, which also supports their hands-on training. The Conference Room Pilot includes six key testing tasks that help project teams validate these business scenarios. |
System Integration Testing (SIT) Phases |
SIT testing phases should cover all business processes, including both common and exception scenarios and cross-functional touch points. as well as technical customizations, extensions, and performance. The SIT should:
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User Acceptance Testing (UAT) |
The UAT testing phase is intended to validate the system in day-in-the-life scenarios. By this stage, all critical issues should be resolved and the system should be validated against business reality. |
Continue Exploring Pemeco’s ERP Implementation Methodology
In Part 2 of this introduction to Pemeco’s Milestone Deliverables, I cover three additional components that are critical to ERP project success: organizational structure, training, and data migration.
Want to learn more about the Milestone Deliverables ERP implementation methodology?
We wrote the book. Read Milestone Deliverables: ERP Project Management Methodology.
Frequently Asked Questions
How does an ERP implementation methodology help keep a project on track?
Pemeco’s Milestone Deliverables helps keep ERP implementations on track by turning a complex transformation into a managed sequence of phases, deliverables, decision points, and measurable checkpoints. At each milestone, the project team assesses whether cost, schedule, performance, risks, and readiness are still aligned with the plan. If the project is drifting, the methodology helps surface the problem early enough to correct it before it affects go-live readiness.
Why does an ERP implementation project need a formal methodology?
ERP implementations need a formal methodology because too many workstreams have to move together: process design, configuration, data, testing, training, change management, and cutover. A methodology gives the project a control structure. It defines the phases, deliverables, owners, decision points, and measures of progress that keep those workstreams aligned. Without that structure, teams may stay busy but still miss critical dependencies, defer hard decisions, or discover readiness gaps too late. Milestone Deliverables is designed to surface those issues early enough to correct them before they affect cost, schedule, performance, or go-live readiness.
How is Pemeco’s Milestone Deliverables different from an ERP vendor’s implementation methodology?
A vendor’s implementation methodology is primarily built to deploy that vendor’s software. Pemeco’s Milestone Deliverables is built to manage the client-side transformation around the software: business outcomes, process design, governance, risk, adoption, data, testing, and readiness. It is ERP-agnostic and adaptable, so it can be used to coordinate vendor activities while keeping the implementation tied to the organization’s objectives.
Unlike rigid methodologies, Milestone Deliverables provides a ‘best-practices’ framework that can be tailored to the circumstances of the implementing organization.
Can Pemeco’s Milestone Deliverables be used across different ERP systems?
Yes. Pemeco’s Milestone Deliverables is ERP-agnostic. It is not tied to a specific software product because it focuses on the client-side work that every ERP implementation requires: governance, project planning, process design, testing, organizational change management, data migration, cutover, adoption, and post-implementation stabilization. The framework can be adapted to different ERP platforms while keeping the project organized around business outcomes, responsibilities, risks, and measurable deliverables.
