Implementing an ERP system is a significant undertaking. It’s costly, time-consuming, and complicated for an IT department to get on. Unluckily, here expenses and potential delays and are all too common. The global lockdown has transformed how teams undertake ERP implementations, regardless of scope and size. In this blog, you will discover how collaboration, team selection, and change management can make your ERP, a success, thereby avoiding ERP implementation failure.
Most businesses are aware that they need to choose digital technologies to compete in today’s market, but the fear of failure pulls them back. But transformation concerns a lot of people. If you are investing, you need to get it right so that it pays off significant business benefits. If got it wrong then you could have troubled employees and unhappy customers, and no one wants that.
ERP implementations are a great move, and because they are such a huge change, having proper planning and issue avoidance can help decrease costs and reduce the implementation timeline. There are several benefits of adopting an ERP system: it enhances your productivity, streamlines your workflows and processes, and maximizes your ROI.
Several businesses encounter challenges when attempting to get all the parts of an ERP to operate together in agreement. That is the reason why it is the responsibility of cloud ERP software organizations and their partners to train and encourage worried consumers regarding the value of cloud ERP. There are several methods by which you can prepare people for success and avoid ERP implementation failure, from the initial discovery and learning phase, till it goes live.
6 Common ERP implementation failure and how to avoid them
A good point to start the process is to identify the most common, and costly mistakes that administrators make while selecting and deploying an ERP system. To help prevent this scenario from happening, here are the 6 most frequent ERP implementation failures that you should avoid and should learn from:
1) Inadequate planning and resources
While preparing for an ERP implementation, your company should include high-level strategic and accurate planning at the detailed level. Without proper planning, your ERP implementation project can fail. That is the reason why making a detailed plan to sketch your goals for the ERP implementation is crucial.
A comprehensive plan can help the implementation team to stay on the same page and serve as a supportive and productive team during the entire process. Each phase of planning should consider every department that is impacted and every employee group as well. A well-planned roadmap ensures that you get the solution that your business lacks, with the right team in place, where everyone is aligned and working together.
2) Improper or over customization
Customization can lead to extremely complex systems and can also extend your project scope. This does not mean that customization should be avoided, but it is recommended to minimize it. Research also reveals that the lack of customization can also hold back the optimum delivery of the ERP.
You should also keep in mind to never go for over customization of software, which can act as a hurdle in scalability or development of the process in ERP features, with an insignificant change in the business operational way. A business can customize its process about the general ERP system that it chooses, or it can allow for the customization to suit the important processes. So, management here needs to be very careful of incorporating the customization to optimally use the software and likewise provide the scope for scalability in the future.
3) Inadequate evaluation or miscalculated expectations
Implementing an ERP can help your business streamline processes and accomplish goals, but it is a complex process. It is likewise a process that needs from 6 months to 2 years. You also need to assure that you have the appropriate team in-house that can devote a portion of their time to the process.
By not assessing the software with demo and adjusting it with business process, the possibility of failure rises and can be seen in 40% of ERP implementations, as major operational disruptions occur after go-live. Doubtful and miscalculated expectations are always a key driver of ERP failure. Around 25% of respondents indicated realistic ERP implementation expectations as the most essential element for avoiding failure.
4) Lack of expertise or not getting the right leader
You will probably notice that the knowledge and team involved are crucial. This varies from having various stakeholders to having people so high up in the company that they don’t have a solid knowledge of the regular activities and work that needs to be planned for the system. It needs a careful balance, remember not too many people are involved it can make things slow down, and no need to cut back too many people as it generates issues later on in the process.
You require the appropriate person to perform the implementation. The ideal person to manage the project should be able to adapt to day-to-day operations, develop solid relationships with various departments, possess excellent organizational skills, and should also be able to manipulate different components along with team members.
5) Choosing the right product
With many ERP options in the marketplace these days, choosing a package for your business can be a terrifying task. While many businesses believe that any software will work, and they will simply adapt to the functionality of the software. So, this decision should not be taken lightly or with inadequate information.
With a vast choice in ERP; right from on-premises systems industry-specific solutions to cloud-based software as a service. With so many options, reaching the right decision could become the biggest challenge. A consumer with a set of defined requirements and a checklist of core requirements can make an excellent start in obtaining the best fit.
6) Lack of post-launch maintenance strategy
Implementing an ERP solution is not a solution that can be set once and forget later. As the implementation gets completed, the businesses need to invest in a maintenance strategy to achieve what is required for maintaining and enhancing the ERP system consistently. Outdated ERP systems can raise the risk of security issues.
You should assign teams to collect data regarding how employees are utilizing the software, what problems they are facing, and overall, how to fix it and make it more efficient. Your employees serve as your biggest asset and listening to them not only improves the overall ERP software but also its effectiveness. To avoid your solution becoming obsolete in terms of efficiency, and to assure its continued success, your rollout plan should be at least two years long, providing time to time updated versions to take care of increased workload.
Your ERP implementation, from planning to execution, can become both exciting and sometimes stressful as well. Ensuring organizational alignment can help you evade any type of ERP implementation failure and can bring in incredible results.
The ERP implementation plan is not a limited one but an open-ended process that demands the maintenance of healthy relationships, with the right team in place, establishing milestones, proper and proper training. You must have an incredible team ready, that has the expertise and dedication to support you throughout the process till the launch and post-launch as well. Understand this process as a long-term partnership and then be ready to accomplish your desired results.