NFP Partners' consulting team has implemented over twenty software implementation projects over the past four years, primarily involving Sage Fund Accounting software. While all were successful, there were a few bumps along the way.
I am starting a new series of articles to share our experiences and advice with you. I hope you will find this information useful, since most nonprofit and government organizations will face at least one major software implementation project at some point in their lifespan. In this article, I will preview the overall scope of an implementation project, focusing on the front end planning phase. Other phases will be addressed in subsequent articles
When you take into account an organization's size, complexity, personnel qualifications, management involvement, time constraints, and the primary consultant's skill set, there is no universal single format or process. However, most projects can be broken down into fairly distinct phases or collections of tasks with an expected outcome. The variation is in the detail of each project phase:
� Project planning
� Data conversion
� Going live
After the decision has been made to acquire new software, the detail project planning commences. If the consulting organization providing the software has done a good job in discovering the client organization's needs, much of the information required for completing the implementation plan has already been collected. The key questions to address are when (the time frame), what has to be accomplished, and who is responsible for what?
Regarding project timing, we are often asked about the best time to implement a new accounting system, often motivated by an implicit assumption that scheduling the new software's launch should coincide with the start of the fiscal year. Our consistent advice is to choose a time period that has the fewest distractions, so accounting management and staff can focus their energy, time and attention on the project. This time period does not usually coincide with the end or beginning of a fiscal year when there are other things going on such as year-end closing, compliance reporting, audit preparation, or annual budget development. In the end, whether to go live 3, 6, 9, or 12 months into the fiscal year is not important assuming that good accounting balance and transaction data originally entered in the old system can be replicated in the new system. Plan at least 90 days from the start of the project to going live. It is important to remember that day-to-day work will go on, which will require double work for some people. You should also expect that a random crisis may occur.
The first critical step in planning the data conversion is to settle on the new chart of accounts. This should be done as early in the project as possible since everything that comes later depends on it. How much the new accounting structure differs from the old one influences some practical decisions regarding the scope and detail of the data conversion. If the difference is significant, more staff time will be required to translate historical balance and transaction data to the new account structure, sometimes overshadowing the whole project. Key questions to raise and resolve are how far back to go in converting historical data and in what level of detail. Standard financial reporting usually requires going back to the previous year for comparative purposes. Two, three, or four years of comparative information is sometimes required, but usually at a summarized level. Our general rule of thumb is to go back no further than the prior year and to convert it and the current year at the detail transaction level. Try to translate as much substance of the detail as practicable if old account values can be translated fairly cleanly to new account values beyond the normal accounting categories, for example to programs, grants or projects. Remember, the data from the old accounting system will be available as long as necessary for those infrequent occasions that something has to be researched.
The third leg of system implementation project planning is to assign responsibilities and tasks along a timeline. First, there needs to be a clear understanding that the overall responsibility for the project's success or failure rests with the client. The consultant can facilitate, provide certain defined deliverables and transfer expert knowledge, but in the end, it is the client's 'baby to have and to hold'. Projects that become too much a consultant's exercise, or conversely a client's self-help exercise, usually do not work out very well. We strive for a team effort that can happen with active client management support and participation of the accounting staff, whether it's a single person or several. We prepare and execute a Consulting Services Agreement that clearly communicates the client's overall responsibility, a definition of work and scope, the consultant's committed deliverables, expected time line and project milestones. The detail plan document, which supports the Consulting Services Agreement, lists the project phases and tasks, the individuals from the consultant or client staff primarily responsible for task completion, and the expected and actual completion dates. Usually, the consultant is responsible for keeping the plan updated and communicating it to the project team as the work progresses.
If you have any questions regarding the scope of an implementation project, please contact me at 303-586-5011.