In the last two decades as ERP software has evolved and become more affordable, more companies have made investments in systems to help better run their businesses,
But along with the growth of ERP use, more implementations than ever before are also failing.
Research shows that 75% of ERP implementations ultimately fail.

If your business is thinking of either moving to an ERP system for the first time or replacing your current one, how does your company avoid a costly failure that could cost millions?

Here are 9 key areas to look at to get the most from your ERP system implementation so you avoid becoming a cautionary tale for other businesses.

 

1.Failure to Redesign Business Processes to Fit the Software:

 

 Many companies have a strong desire to try and fit their new ERP system into existing business processes.
But the fact is, a new ERP system will give you new capabilities and the smart move is to redesign your processes to take advantage of the new technology.
The reality is that it is very difficult in most business to change old or existing processes. If you continue to do things the same way, why should you expect different results? Embracing business process change is a key requirement with any new system for you to get the most out of your investment. 

2.     Lack of Senior Management Support

If top management doesn’t support the ERP project you’re setting yourself up for failure. It is easy for senior managers to become a sponsor but very difficult to have them schedule crucial team members for system input, pilot testing or super user training.
The unfortunate fact is the people who need to be trained as “Super Users”, are the same key people who also run the business. The lack of senior management support to schedule time away from daily tasks is one of the most common ERP implementation risks.

3.     Insufficient Training and Reskilling of End-Users

A number of firms learned that the costs and investment in training and reskilling employees were a lot higher than expected and budgeted for. ERP implementations comes with deadlines that need to be met and one of the most common areas companies cut to stay on budget is in training. As a result, there’s not enough time to train the labor force who will use the system the most and give them skills they need to reach satisfactory production levels.

4.     Lack of Ability to Recruit and Retain Qualified Systems Developers

Many of the organizations found it difficult to recruit and retain good ERP specialists because of high demand and salary requirements. In-demand developers with strong skills typically move from one consultancy project to another. The best bet is to find and support an in-house ERP specialist to support your project both during the implementation phase and beyond. 

5.     Inability to Obtain Full-Time Commitment of Employee to project Management and Project Activities

Similar to point 2, it can be difficult to get managers and employees to commit to project management roles because they may be uncertain about taking on additional responsibilities.
Or, in some cases, there’s no back up for their regular jobs while they’re busy in implementation and testing, meaning employees will either have to do double-duty or the work gets backlogged, causing internal and external problems. 

6.     Lack of Integration

There is an old axiom attributed to Benjamin Franklin-“Failing to plan is planning to fail” and one of the key areas companies don’t pay enough attention to is the integration of key systems outside of ERP and how those will fit into the puzzle. If your company depends of external quality systems, H-R management tools or outside technical programs it is vital that you understand how your new ERP system will integrate those functions before you begin the implementation process.
Everything from business processes to the technical integration and expected information flow back and forth between systems must be examined, tested and planned for. The last thing you want is to force your team to download information and work outside your systems.
7.     Lack of Change Management

It is very easy to take for granted that all employees will accept that implementing a new ERP system is a “Good Thing.” Your team has grown used to doing things a certain way and don’t want to change.

 

These people firmly believe “If it ain’t broke, don’t fix it”

The people who know the most about how your business runs on a daily basis and are very good at their job sometimes can be the biggest road block to new system deployment.
Change management must be at the top of the list if you hope to be successful. Employees need to understand why things are changing and what that means to the business and their jobs and they need to understand that the short-term pain will result in long-term gains. 

8.     Poor Technology Planning

Technology is rapidly changing and today businesses have more choices than ever when it comes to ERP deployment. Companies hear about options like cloud services but many times don’t understand the different choices and how that can impact their business.
Businesses that don’t properly undertake a deployment plan and long-term cost analysis run the risk of cost-overruns, both short and long-term.
It’s important to thoroughly understand the technology and personnel requirements to maintain your ERP systems. 

9.     Less than Awesome Project management

Starting a new ERP project is a serious undertaking for a company of any size. You are committing time, resources and most importantly money to a project that will impact all areas of your business with the belief that it will ultimately take your enterprise to the next level with higher profits, improved customer satisfaction and business growth that will ultimately make it worth the time and investment you are making.
But all too often, ERP projects end up being an afterthought. Instead of putting the best resources and talent towards the project, the internal implementation teams end up being staffed by the people most available, with little oversight from top company management. Less than awesome project management in any business is significant ERP implementation risk.
Not having the right people and resources dedicated to a new ERP system significantly increases your chances of cost overruns and ultimately a failed implementation.

In Summary

A successful ERP implementation begins and ends with proper planning, strong decision making and a close collaboration with the implementation experts. Follow these guidelines to ensure the success of your project and you’ll significantly reduce your chances of an implementation failure.
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Technologies International supports manufacturers through ERP selection and implementation, supply chain optimization and warehouse management planning. For help optimizing your business, call us today at (909)-614-1416 or visit our website at https://www.tech-intl.com