What are the ERP implementation failures in business?
Technology is designed for humans, to make our work easier and faster and a technology should always work in accordance with the human demand. You might be thinking why? If it happens the other way round, that a human working in accordance with software, what will happen? All your efforts will go in vain. There won’t be any use of implementing that particular technical innovation in your business or another work circle. A human will never get succeeded in getting his work done or completed within the time frame as the software doesn’t understand the immediacy or desirability in business.
In similar, if ERP is perfectly implemented, a business is sure to flourish. On the other hand, if it is not implemented in proper, a business is left to suffer in terms of resource and profit. Any ERP software is like a backbone to business success. No matter how big or small your businesses are, if an ERP is rightly implemented, it sufficiently provides all necessary inputs and information to the management. It helps the business to properly establish the communication channel between the customers, suppliers, and employees. It helps management via coordinating different resources like Human Resource, Customer Relations Management, Inventory and Sales, Accounting, supply chain to win customers, battle competitors, and reduce cost.
We all live in the era of “Survival of the Fittest. If anything goes wrong, all our efforts will turn futile. We all know how an ERP works wonders and magic in the successful run of a business, how efficiently it manages the business workflows and how they improve the work culture among business by making the internal communication actions, faster, cheaper and smarter. So it’s well-understood the fact that, right implementation of ERP comes along with a great number of cheers and the same time a wrong ERP implementation, add on more number of negatives like a business loss, dropping the market price, losing both market share and competitive advantage.
This article points out few reasons for ERP implementation failure, the common things you need to take care of while implementing an ERP software to your business.
Common causes of ERP
1. Poor consultation
An ERP software tailored in accordance to customer needs can only bring positive results. And to bring the right ERP software into action, you need the help of the best consultant who can understand the client requirement, plan, implement the resource and execute the necessary. Many ERP implementation failures are on account of the wrong choice in selecting the best ERP consultants. One has to understand that only a good consultant can get you with the right software suiting your business needs. A consultant plays the role of an architect giving you the right directions and measurements to process your ERP implementation request. Often due to lack of knowledge about business verticals or ineffective communication, the consultant results in ERP implementation failures. A poor ERP consultant often fails in delivering the professional advice on EPR implementation.
2. Poor quality BPR( Business Process Re-engineering)
Firstly before the implementation of an ERP, you yourself or the company should have a clear-cut understanding of your business needs and requirements. Often due to poor quality BPR, the ERP implementation causes configuration problems often resulting in ERP implementation failures. Here the business processes don’t get benefitted with the newly implemented ERP systems, making it inefficient to meet the latest business trends and desires. Often consultants fail to conduct mapping analysis for verifying the software functionalities. It is very important to carry the mapping process in order to chart the complete business requirement.
3. Poor project management
Often the lack of ERP knowledge creates inefficiencies in the completion of a project. It is highly important for the business people to find the best consultants. Only the best consultant can evaluate the project communication and their respective training performance while conducting BPR. For an efficient project management, the top officials including the management and project manager should have an exquisite knowledge of ERP implementation. They need to make sure of this before the start of ERP implementation project.
4. Doing it in the first place.
The word right implementation of an ERP guides you with many requisites. Whenever a company demands new changes in their structure, the implementation should be done right there. But in many cases, the company is the dilemma whether they really require new changes or not, whether the need to go for implementation or not as per the new need. Often a company fails to understand that, the need is mandatory and a simple tune-up of their current software can bring a great level of improvisations and work efficiency.
5. No clear destination.
Often, lack of knowledge over the business goals, the outcome manifestations, or the specific financial budget of the project leads to problems and challenges in controlling the ERP implementation. Therefore a clear understanding of the destination is needed for the right implementation of an ERP to derive the best results.
6. Failure in resources allocation.
One should have a solid understanding of the internal and external resources needed for completing a product. For example, with respect to internal resources, resources, both internal and external requisites for the project. For example, the internal resources are Finance, Accounting, or Human Resources departments. If the resources are not allocated at the right time for the right person it often leads to misleads on account of failed commands. Especially in Trading Industry and manufacturing, resource allocation plays a vital role as they determine the real-time movement of stock and on time delivery goods. If communication fails on their end it will directly affect the business.
Over-dependence on consultants.
Too much dependability on consultant can make the project diffuse. Yes its true that ERP implementation needs expert advice, vision, and planning. But if the company over reliably depend on the consultants for minute alteration, it may lead to different route rather than achieving the real business goal. A company should never get surpassed by the consultants. The reason is that company holds the key business and key decisions. If you make the consultants the chief decision maker, it will end up with a shift over in the business objectives, as the ERP consultant goes in his own way rather than following the company protocols.
A tremendous amount of customizations often breaks down an ERP tool. Most companies fear upon customizing their software for several reasons. They fear over the risk, time, and investment shed upon the project. The most challenging part in customizations is the data conversion, often quoted technical risk in the ERP implementations. At times customizations start with a minimal or small amount but may grow gradually in the name of overcoming challenges within the projects. If you are successful in finding the right ERP implementation partner all the unnecessary resources can be curtailed.
9. On the job training.
It is a human behavior that we take time to get adjusted to new. Especially when it comes to a software or any ERP implementation often a training upon the new software serves mandatory. Because an inexperienced person may not be able to accomplish the desired outputs if he remains illiterate. Therefore whoever is the end user they must be trained on the functionalities and technicalities of new software to accomplish more result. On the other hand, the ERP implementation will be a total failure as nothing can be achieved after so much investment.
10. Insufficient testing.
Testing an ERP tool to be considered as a rectifying stage. The purpose of testing should not only get confined to ensure whether the project works or not, but also to make sure if that particular tool fits your business needs and produces the output you need. Reducing the number of testing not only leaves you with defects undiscovered but also increases the risk of missing important functions in the ERP system.
11. Not enough user training.
The management shouldn’t hurry to start using the tool without adequate training to users. It increases the complexity of working nature and also fails to accomplish the desired outputs. Therefore a sufficient training on the basics should be delivered or structured so that the users understand the system in whole with full potentialities and have a positive impression at the rollout.