Healthcheck saves firm from potential £10m overspend

PE-backed mid-cap manufacturing business

Value Highlights

PE investors in a global manufacturing and logistics business were concerned that the Microsoft Dynamics 365 ERP implementation underway was over budget and underperforming so asked Panamoure to undertake a health check of the implementation.

What were the challenges?

There was no clear plan to deliver, with management and the chosen Microsoft Dynamics implementation partner working separately and with obviously disparate goals. The project spend forecast was incomplete with the original business case expectation and ROI exhausted when the programme was 40% complete. The business had allocated inexperienced human capital to areas of the project who were unable to recognise the gravity of the situation. With confused and fragmented governance in place, decisions were being made outside of management knowledge.

So, what did we do?

We reviewed the governance, available plans, business case and what the business actually needed the solution to achieve. We uncovered that requirements across the global supply chain were distinct and the MS Dynamics partner was building the solution to fit how it “thought” it should be implemented. Post this initial review, we forecast the true cost and expected timeline to deliver successfully, which transpired to require a further ~£10m spend adding an additional two years to the programme. As this would have disrupted the firm’s daily operations and was outside the investment cycle, we recommended that stopping the programme by adopting a revised transformation strategy was the correct approach.