Many understand that ERP is necessary and are aware of the endless opportunities that ERP Systems offer, but what about the side effects? Everyone has heard horror stories of ERP System implementation failures. What are the reasons for those failures? In this article, we will explore the common implementation failures of ERP Systems and how YOU can avoid it happening to your business.
- Unrealistic Expectations
Let’s be honest, we have all been excited about a project and overestimated the time it would take to get done or even underestimated how much it might cost to accomplish a task. This is a very common “failure” that some companies have encountered while implementing their ERP Systems. Don’t let that be you! The best way to not be overly ambitious? Hire an ERP Consultant to help you implement this new technology. They deal with this every day so they have realistic expectations and can help your company reach your goals–no matter how ambitious they may seem. An ERP consultant can help unpack everything that a vendor unloads on you, such as claims about expenses or timelines, and help curb those unknowns that may lead to having to cut corners or unexpected costs. When comparing implementation proposals from various vendors, be cautious of the lowest proposals being presented. You may be facing a bit of a bait-and-switch with compounding change orders down the road, or perhaps even a project destined for failure due to lack of necessary implementation activities.
- Incorrectly Prioritizing
When looking at implementing ERP Systems, some have prioritized the technology over the people. That is a big no-no and could potentially lead to failure when implementing. Excellent technology needs to be the heart of whatever ERP system you choose to implement, but your main focus should be on the employees who will be using this system, NOT the technology itself. Essentially, it is important to remember that an ERP System is only one part of your project. The bigger picture will impact your employees, business processes, and your company’s culture as a whole.
Due to this, it is important to also focus on organizational change management to ensure a smooth transition and help everyone understand the new changes. It is also important to ensure that the team dedicates enough time, budget, and resources to manage resistance and ensure buy-in of the new system.
- No Business Process Management
First things first, make sure you invest in a system that is appropriate for your current and future business processes. It is very easy to get overwhelmed with the choices and invest in fancy bells and whistles that you don’t necessarily need. It is important to clearly define goals and understand your current state of business or it will be difficult to make any kind of improvement. If you fail to do this, you could potentially select the wrong system and then have to endure the nightmare of investing in expensive and time-consuming customizations to get the software to fit the processes you actually need.
That is why we recommend that you map your current workflows and define what you wish for your future businesses before you begin browsing potential ERP systems.
- Inadequate Resources
We know, there is so much that goes into starting a new project. For integrating ERP Systems specifically, it is important to have the best resources to complete the project. Quality is just as important, if not more, than quantity in almost every aspect! When creating a team, take the time to choose those who are the best for the job. You may find that you need an outside party to come in and help to give this project the time and dedication it needs, as if you staff the team with employees, they will have to focus on their day-to-day tasks as well as this project, which could potentially cause some issues.
Most businesses bring in third party resources to round out their implementation team. These may include system integrators and ERP consultants, such as our team here at Godlan, that have the industry specific experience you really need for the project.
- Much. Customization
Earlier we stated that it was important to know your current business state and present goals. Software customization isn’t cheap. Those bells and whistles that seemed so attractive initially, can slowly add up and can cause issues without the right implementation team. When you go through software selection, make sure you consider how it fits your businesses short- and long-term goals. Be wary if you will have to edit the source code or implement integrations and third-party modules simply to get the functionality you need. This is most likely a sign that it is more trouble than it’s worth and will cause issues down the line. Ideally, the system should do what you need it to do without much editing and “fixing”. The burden often comes from customizing functionality that should be standardized.
- Improper Data Migration
Transferring data can be tricky, especially when there is so much of it. When all is said and done, it is a necessary process unless your business is planning to start from scratch. Because it is such a vital part of the process, you cannot rush it, or it will lead to problems later. Perhaps the biggest challenge? Knowing which data to transfer and in what format. How do you do that? Well, first you need an advanced understanding of how the new ERP System works.
We recommend engaging an expert to help your team make these decisions and to help you be correctly informed. At Godlan, we can assist with customized training for whoever will be involved in this process. We also recommend assigning someone to the task who is familiar with the data you desire to transfer. Assigning the job to them will make it easier in the long run because, along with your Godlan technician, they will be able to identify and remove duplicated data before it gets transferred.
- Insufficient End-User Training
The most common implementation failure is lack of buy-in. You have spent all this time and multiple resources to implement this ERP System and now your employees aren’t using it. What is the point of going through all that work only for you employees to not put it to use? Well, this may be because of a common issue that you may not even realize is happening until it’s too late. A simple lack knowledge about the system is the main reason why employees push back on and do not use new software. If they don’t understand it or how it works, they will revert to what is comfortable and what they know. To mitigate this risk, it’s important to have end-user training which will eliminate resistance to the change. We recommend showing employees the in-and-outs of the new ERP system before it officially goes live so that they can become comfortable with the software and be able to ask all the questions before they are expected to use the new system.
No one wants to fail in the implementation process of ERP Software. With Godlan as your ERP Software partner, failure isn’t an option. Our team is highly skilled at evaluating your current systems and processes in order to plan and execute a successful implementation. Whether you are upgrading or just getting started, we can quickly:
- Identify opportunities for performance improvement
- Help establish priorities based on the magnitude of the opportunity versus the effort needed to achieve it
- Provide an objective “Level of Use” analysis
- Improve overall use
- Better align business processes to corporate objectives
Godlan’s Professional Services Organization (PSO) will assess and analyze the ERP implementation needs in your organization and prepare a plan of execution based on our proven methodologies that will shorten time to value and maximize the project success.