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By: Cirin C Baby

How to Reduce the Risk of ERP Failure in Your Company?

Functional Odoo 14

Failures in the case of business operations are unacceptable and causing one will lead to catastrophic losses in the company operations both in the financial as well as productivity aspects. Therefore, the vitality of the operational requirements to maintain a hundred percent success rate in the company operations will reduce the risk of losses and damage to the company. Today Enterprise and resource planning software is widely used all over the world as complete business management solutions. The digitalization and the boost in the telecommunication facilities have rooted for this and allowed for the blooming of various ERP solutions offering various application-level services for business organizations.

An analysis created based on the survey conducted on ERP implementations depicted that more than 50 percent of them have failed and were not acceptable to operate for the company. It can be incurred for the survey that although the cost of ERP implementations are higher and would require a large investment from the companies financial aspects the chances of it getting failed are equal to a 50/50 chance. Moreover, numerous reasons would add up to the failure levels of an ERP in a company. In addition, this would be based on the internal conflicts or on the choices you make while preferring to implement an ERP, this may depend on the type of ERP, provider, technicians involved, and many more.

This blog will provide an insight into why ERP implementations are challenging? and how you can reduce the risk of ERP implementation failures?

Why are ERP implementation challenges?

Before moving on to how we can reduce the risk of failure of ERP implementation in your company let's assess why ERP implementations are challenging. It is vital because the development of ERP software is sophisticated and in today's world the need for customization is inevitable which has rooted the rise of challenges while implementing an ERP. 

Today ERPs are widely used and there has been a trend in both corporate as well as non-corporate establishments to move towards ERPs. This Is mainly because of the advanced features and capabilities which it provides to the users. Despite widespread knowledge of the system and its capabilities, the ERP implementation was considered a challenging and risky investment until its successful to be operational. Here are some of the aspects which add up the challenge in ERP implementation:

Implementation cost 

It is well known that the ERP implementation cost is high and is considered a large investment for the small and medium scale industries. The changes not only apply to the software but also form the implementation, customization, and integration of it to your businesses. Nowadays, there are numerous ERP solutions available in different price ranges, however, the best quality ones and the reputed ones have high prices.

Lack of flexibility and inability to operate

The ERP solutions can be customized but certain solutions do not allow the customization and they would lack the flexibility to manage the business operations. An ERP which is stubborn and intact will not last long in a real-time business environment as it would reduce manageability and diminish the user-friendly aspect of business management.

Lack of training

The use of ERP mainly depends on the ones operating the business daily. Hover, the lack of training them to run the company's operations and use it would lead to the unmanageability of the platforms. Moreover, the generation of errors and the requirement for maintenance will be required frequently. Although, the ERP usage training for your employees will cost you without it the loose for the company will be catastrophic

These are a certain list of things that will contribute to the ERP implementation challenges but are not limited to. In the next section, we will be discussing certain aspects that will help you to rectify the ERP implementation failures before even happening to them. The below image depicts the major contributors to the aspects of ERP implementation failures in a company. Please do review the statistics which would be helpful to you in rectifying them.


If you need to know further on the aspects of why ERP implementations fail in your business read the following blog:

Reduce the risk of ERP implementation failure.

As we have discussed certain aspects that will contribute to the ERP implementation failure, let's now move on to the solution and ways to reduce the risk of it before even happening.

Set your requirements and priorities straight

The ERP implementation can be conducting and catastrophic if you don't know the business requirements of your company. Firstly, a study center corporation would help you to choose the right ERP. Moreover, a demo with an implementation consultant will do more good for you. Secondly, choose the right implementation partner and set the terms and conditions straight. Finally, describe your needs and understand the capabilities of the ERP, if not configurable to your business move on and choose another one.

Risk mitigation

The implementation can be a lengthy process considering ERPs, therefore you should prioritize your needs, set goals to be achieved for the entire duration. In addition, weekly analysis and review of the process with the implementation term of external service providers should be conducted to ensure that you are on the right track.

Check the reliability

The ERP developed should undergo serious real-time testing to understand the functioning of your company. Moreover, both the functional as well as technical aspects of the software should be tested for compatibility, reliability, and efficiency in operations. In addition, the employees of your company and the users of the platform should be trained to function according to the requirement. Moreover, training by the implementation partner or resource person would allow them to understand the operational aspects of the platform.

In conclusion, the ERP implementation can be a challenging process and would be creating more demerits to your organization without performing it in a standardized way. Furthermore, although the chances of ERP implementation failures are so high by following the above-mentioned risk-reducing facts it can be well executed to be operational in your company.

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