Enterprise Resource Planning Software has its own special place in a business. It holds the company together under one roof by integrating together different business departments. When the ERP implementation turns successful, the business is loaded with surplus benefits of higher productivity, better operational visibility, and better management of resources. However, everything can be ruined, if the implementation goes wrong. It can result in great financial loss or even worse for the company. However, ERP implementation failures can be significantly brought down if the business organization takes care of a few things before enrolling themselves for the ERP implementation project.
ERP implementation is always daunting for businesses. Because there involves a lot of considerations and checklists to follow before implementing an ERP. To list a few, the prominent ones include- the costs for ERP implementation, the listing of proper requirements in a new ERP system, providing functional training in ERP to the users, restructuring of key business processes, migrating the data from the old system to new and many others.
If the project team fails in properly defining any of the said above, it can bring in harsh consequences to the business as part of the ERP implementation. Of course, even the timeline contributes to the company’s success and failures. For instance, if the ERP implementation is progressing at a slow pace say slightly behind the pre-scheduled timeframe, it may not necessarily bring good cheers to the company. Rather it may spell destruction to the whole set up. When the problems start mounting, it can paralyze the entire organization.
To be precise, the rising number of ERP implementation failures is on account of not meeting successfully the key business goals, that includes the following:
1. On-time implementation.
2. Assurance of Operational Efficiency
3. Assurance of Higher Productivity.
4. Reduced Operational Cost.
5. Increase in Sales/Revenue.
6. Spending Plan Balance.
One yet another factor that totally disrupts the ERP implementation is the over customization. Many customers in dreaming of perfect software endure heavy customizations in the applications. However, this can hamper the standard workflow of the application, causing great problems in the software application’s run. If not initially, the problem can arise at any time during its run. Therefore, hefty customizations should be avoided if you plan for ERP implementation. Read rising ERP implementation failures in the Middle East.
One major reason for ERP implementation failure is the lack of consultancy. Often in many cases, it is seen that the business neglects completely to the role of ERP consultants so as to save money and time. However, this can bring traumatic impacts in the later run of implementation as the project may not succeed in meeting the desired changes. Consultants have a special role in ERP implementation as they match the right requirements in the ERP system. They forecast every requirement in prior and enhance quickness in the working of the business.
Their presence is highly critical for the successful deployment of software as they scrutinize every need in-depth. In designing different phases of implementation say customization, integration, the opinion of consultants matters as they rightly assess the degree of change required. The functional and technical knowledge of ERP consultants in different business domains will always stand tall from that of your boss or the application user.
Why many ERPs fail in business is because they are planned under the supervision of their boss or any other staff. Often the boss or managers are good at the top-level management. It is not mandatory that they possess a deep knowledge inside what is really required. Therefore, the whole project gets structured around their narrowed vision or opinion resulting in many deficiencies to the software.
Yet another causing agent of ERP implementation failure is poor change management. This includes insufficient planning and executing ERP alongside poor training for the users. Cybrosys from different collected samples of ERP implementation has found out that the major driving factor behind ERP implementation failures is poor training for users and poor execution plans. Thus it is highly critical that the employees get properly trained in the ERP and get knowledge on how the new application will bring changes in the user’s core responsibilities when they converse with the application.
Understanding the importance of ERP training in the ERP implementation process, Cybrosys has taken initiative for offering functional training in Odoo. The training series prospects to cover all the major modules of Odoo and literate Odoo users how the application influences their daily operation routines.
It’s Not the Software, It’s You
Based on our research conducted in this segment, it is found that about 36 percent of the ERP implementation failures stemmed from the organizations not efficiently meeting the functional requirements for the software application. Therefore, the software isn’t at fault. It is the participants from the ERP vendor, the client company to implementation consultants who are to be blamed for the loss.
The problem arises out of a combination of the following:
> Client not properly defining the need or not doing its due diligence in researching the need.
> ERP Consultants failing in properly understanding the need of clients.
> Vendor proposing hefty customization or over-hyping software’s captaincy.
Read a real case of a Manufacturing Company who witnessed to their ERP implementation failure. Reason: Lack of homework.
In 2011, Group Manufacturing Services, a plastics and metal producer, started with their ERP implementation. From its beginning stage of ERP implementation, the execution was a wreck because the organization took it on without the help of ERP consultants. However, later during the implementation stages, the company realized their mistakes as there surfaced many problems like inefficiency to perform operations correctly, poor data management realizing that the software would not support the critical needs of the business. More on, it caused the company several other dollars to correct the application and channelize it towards meeting the businesses’ functional needs.
Had the company well-researched before the project what are their needs, and had they incorporated ERP consultants in the ERP implementation project, it would not have brought such harsh consequences.
Read our articles:
> 6 Critical Factors For Successful ERP implementation
> Role of Consultants in ERP implementation
Consultants have a significant role in ERP implementation as they rightly identify the current pitfalls in the application and map every requirement in the new system. The combination of technical and functional consultants assure a smooth and successful ERP implementation in many cases. From documenting to configuring, training to deploying the application, techno-functional consultants have a great play in the implementation phase. If you infuse the rightly skilled and talented ERP consultants for your business project, you can to a great extent save your ERP implementation from drowning.
Over again, an organization’s in-house IT group isn't given a voice during the ERP selection process or its implementation stage. In spite of having the in-depth information in the organization’s IT frameworks, IT staffs are merely made a participant in the discussion of ERP implementation project.
If No ‘IT’ in Team, Go for it
In our research, we found out many instances like companies not giving IT departments sufficient time to prepare for the implementation. According to an anonymous IT expert we talked to, he spoke how his management went ahead with the ERP implementation project, without consulting the IT group. Making it worse, the IT group were given one-month time to prepare themselves for the implementation. Just imagine, how an IT group that is totally unaware of the functionalities and features of the application, who never used the system, would prepare for implementation. Questions towards data storage, security, migration were left ignored and remained uncertain. Topping it, his management insisted on quick implementation of the application, though the vendor recommended a specific time period. To conclude, this ERP implementation was an utter flop and was pushed back to another year causing significant loss to the company.
Collaborating with IT resources helps with assuring technical responsibilities surrounding the ERP implementation project. The periodic upgrades carried by your IT staff can assure a smooth, problem-free pre-implementation phase and the post-implementation phase. Remember, the implementation team has a huge role in assuring the success of the project. And this comes from a combination of a team comprising technical skills, leadership attributes, and a positive approach.
Migration, Plan it Safe
Data Migration process is often taken lightly by many businesses. However, this is a big mistake. If not properly planned and executed, it can seriously disrupt the business and bring many misfortunes to the work. Therefore clearly outline the migration process, go for the data quality check, monitor data extractions and others. The inherent understanding of your data will help you to keep the necessary and dispose of the odds. Further validating and testing your migration process will help you with data conversion, comparison, and duplication.
Test Software, Assure Smooth Implementation
Testing is the essential action planned for recognizing and settling technical issues in the product source code and evaluating the general usability, execution, security, and compatibility of the application. It isn't just the primary segment of quality assurance; it is additionally a fundamental part of the software development procedure.
Plan Your Testing and Quality Assurance Planning
Best Practices To Avoid ERP Implementation Failure
Not every ERP implementation is ill-fated. However, there are rising numbers of failures as well. However, when cautiously and appropriately executed, out of ERP implementation, the businesses can reap unlimited benefits and returns. Here are some practices that can help you avoid ERP implementation failures.
Ensure Change Management
Never underestimate the importance of users when it comes to ERP implementation. If the users fail to use the application effectively, your project will never bear the fruit you wanted it to offer. Therefore, consider the fears users can have when changes take place at their desk. Consider the fears experienced by users when automation and computerized procedures get faster results than them, making them old.
It is highly disappointing and frustrating for workers to find all of a sudden that their work processes have been significantly changed. However, providing them user-level training prior can subdue their fears and more it helps with their quick adoption of the application. The user’s resistance towards change can be easily brought down by providing them proper training in the application and educating them on how software applications will behave in particular circumstances. Further introducing them to functionalities will help in the quick adoption of processes and tools within the application.
Do not rush
ERP implementation is one such business procedure that demands adequate amounts of time. However, rushing them with unrealistic time frames can create big problems in the procedure end resulting in not meeting the desired output. Many factors are to be considered in an ERP implementation and it should be adequately planned and organized. Rushing can result in missing the important segments resulting in great loss to the business in the future. In general, an ERP implementation process takes a timeframe of say six months to two years. The timeline can either go less than anticipated or more depending on the nature of the business workflow. All you need to do is trust your ERP implementation partner. The skilled experts will rightly guide you with the proper timeline to complete your project. Trying to finish off the project in an unrealistic time frame simply paves the way to ERP disasters.
Engage and involve your IT team.
There's a reason why you're in the management suite and your IT staff in the server room: You're best at maintaining a business, and they're best at managing your organization's IT needs. Therefore, respect their opinion with regard to the implementation of a new application at your business end. Consider their feedback and suggestions on various aspects of implementation say data migration or training. It can greatly contribute to the smooth running of the implementation project.
Know what you need
The foremost thing to do in an ERP implementation is listing your current business needs. Charting all your requirements for effective and efficient business management. Defining the key objectives and requirements, go for vendor assessment. Ensure your vendor is capable of providing the service you asked for. Usually, vendors may not mislead you with wrong listings. However, cannot take chances. Therefore, ensure you have a team that is self-sufficient to take care of the project. Ensure you have a team that cannot be misled in any circumstances with wrong statements or proposes.
Selecting the right partner
No matter you are well-equipped and literate on ERP implementation. To get the work done in neat order, you need to collaborate with the right partner. Choosing a reliable and experienced partner can top you with the right people making good changes in your business. However, going for cheap alternatives like freelancers for ERP implementation can bring big worries in the later run. Read Freelancers vs Official Partners.
Selecting the right choice
When it comes to ERP implementation, there are several running choices like on-premise or cloud-based application, custom-build application or off-the-shelf software. Understanding your key requirements choose the variables. For instance, cloud software can be good for a few groups, say a game-changing application for many industry types. However, it may not have all the functionalities an on-premise would offer. If a customer run behind the glitzy gimmicks of cloud software, after seeing many opting for this choice, there is least guarantee that the system performs every critical need you wanted it to perform.
Deploying Right Team
Normally, there is a trend followed in many organizations that appoint an inappropriate individual to execute the implementation project. For instance, the junior staff is often deployed to look after the work progress and make many important business decisions. This is simply fearing the time waste of senior staff. However, this has its own adversity and bad consequence as juniors may not succeed many times making the right business decisions. The lack of experience can influence their decision making resulting in pathetic business conditions. Lack of understanding of the company’s key objectives, the mission behind the implementation project jointly can lead to failure of ERP.
However, deploying the right team, a complete team comprising of the top-level manager to normal users can build a strong option and make the right choices for the business. While the managers can rightly supervise the progress, the users can rightly identify the need from the grass root. The perfect combo of junior and senior individuals in the team can collaboratively make business favorable decisions.
Going for a trial run during implementation helps to keep in control of the project. From testing the logistics to communications to stakeholder management plans, the trial run enables us to dig out the deficiencies in the project before the main rollout begins.
The trail run will help the business to bring changes in approach, or scope if demanded. Also, it can help in outlaying an accurate budget and plan to be produced for the main rollout. So one of the best practices to avoid ERP implementation failure is to go for a trial run before the main rollout.
Don’t Change Everything at Once
One of the most widely recognized mistakes is to attempt and drastically change your whole hierarchical culture and business procedures all of a sudden. At the point when you purchase software, you get along is a new technology that promises improved methods for working together. The new application may energize changing your strategic approaches that were not part of your organizational culture or not supported by your old application.
New procedure upgrades will undoubtedly push your business ahead, however, attempting to actualize each of its functionalities immediate may take a toll on employees and management. Therefore, to avoid this turbulence, adopt a progressively slow strategy by checking whether new functionalities will cause any kind of burdens. At times it is better to go-live with the new and later goes for the add-ons when you are prepared for them.