ERP Application Management: Important Steps in Mitigating Risk

1
ERP Application Management

• Important Steps in Mitigating Risk

2
ERP Application Management

• Risks is described as countless potential failure
  point that exist throughout an ERP project
• Risks surface from problems in technology, staff
  nature and more
• Project managers can break down risk avoidance
  into five steps

3
ERP Application Management

• Step 1 Identify Potential Points of Failure
• An experienced project team is best defense
  against risk
• Well qualified IT outsourcing firms offer the
  highest levels of expertise and experience
• Examples of point of failures cost estimates,
  unqualified project managers and lack of clear
  objectives for ERP application management project

4
ERP Application Management

• Step 2 Assess the Potential Damage
• After identifying point of failure, team must
  assess the likely damage
• What will happen to budget, schedule or users
  requirements?
• What will the impact be at micro or macro level?
• How severe will damage be and who are affected?

5
ERP Application Management

• Step 3 Determine the Probability of Failure
• Assess the probability that failure will actually
  occur
• Project team needs in-depth expertise in ERP
  application as well as companys business
• Working with IT outsourcing company, businesses
  have opportunity to get expertise they may not
  have in-house, as well as experience implementing
  package within similar sized company in same
  industry

6
ERP Application Management

• Step 4 Prioritize the Risks
• Team can decide what risks theyll focus on
  eliminating due to detrimental effect on business
• Project team makes executive management aware of
  priority risks
• Monitoring plan should be in place for project
  team to oversee all identified and less important
  risks

7
ERP Application Management

• Step 5 Mitigate the Risks
• Team needs appropriate action to mitigate all
  risks
• Goal is eliminate all risks as much as possible
• Mitigation involves reducing risks probability
  or impact
• Team needs to address both risk probability and
  impact in application management plan
• Plan should identify actions needed to reduce
  risk and steps required to recover

8
About the Author

• Chuck Vermillion is CEO and founder of OneNeck IT
  Services, a leading provider of hosted
  application management and managed services since
  1997. For more information about ERP Application
  Management, visit http//www.oneneck.com/Solutions
  .aspx today.