Parallel Adoption - Risk Versus Costs

Risk Versus Costs

The reason for an organization to choose for parallel adoption in favour of a pilot conversion, big bang or phased adoption is often a trade-off between costs and risk (Andersson, Hanson, 2003). Parallel adoption the most expensive adoption method (Chng, Vathanopas, 2002, Microsoft, 2004, Anderson et al., 2003), because it demands from the organization that two systems run parallel for a certain period. Running two systems simultaneously means that an investment in Human Resources has to be made. Besides a good preparation of the (extra) personnel, that has to go through a stressful period of parallel running where procedures cross each other. (Rooijmans, 2003, Eason, 1988) Efforts should be placed on data-consistency and preventing data corruption between the two systems. (Chng et al. 2002, Yusuf, 2004 ) Not only for the conversion process itself, but also in training them for handling the new system.

When it is necessary for the new system to be implemented following a big bang approach, the risk of failure is high (Lee, 2004). When the organization demands heavily on the old (legacy) system to be changed, the trade-off between extra involved costs for a less risky parallel approach, should be in favour of those extra costs (Lee, 2004), despite this, we see that ERP adoption follows a big bang adoption in most cases (Microsoft, 2004, Yusuf, 2004).

This means that an organization should think clearly about their implementation strategy and integrate this decision in their Risk management or Change management analysis.