The promises of an integrated ERP (Enterprise Resource Planning) solution can inspire any business owner to approve a costly, time-consuming planning and execution process. However, not all ERP implementations are successful; many end in frustration, failure and wasted resources.
To prevent a disaster with your implementation, arm yourself with the right resources to avoid failure, including this article from Software ThinkTank.
Thinking through the Top 5 Mistakes made when implementing an ERP system, we can identify the common problem areas most customers face and take the proper steps to avoid them.
Mistake #1: Poor Planning with Low Executive Buy-in & Support
Without the proper planning and buy-in from key stakeholders your ERP implementation is doomed. The scope, size, complexity and change required for a successful ERP implementation requires all hands on deck, especially the captain.
Minimizing the planning process as a trivial task or delegating it down can lead to an improper commitment of time and resources. Without major decision makers involved from the beginning, critical steps and activities can be easily overlooked.
Lacking experience in ERP implementation projects, a common mistake is cutting critical events such as documentation, process integration or testing in order to reach the ‘go live’ date on time. One can imagine the failure rates without these.
Mistake #2: Change Management & Inadequate Training
Changing the corporate culture, business processes and employee training can be a long-term, uphill climb. Understanding change management and training are essential components to a successful ERP implementation. Assigning resources accordingly is a step in the right direction.
The resources required are commonly miscalculated and are more commonly a failure point. Employee training should begin before implementation, educating all employees of the benefits of using this new tool; making their jobs easier and the organization more efficient as a whole. It can be argued that employee buy-in and training are the most critical success factors in any ERP implementation.
Mistake #3: Poor Selection & Misalignment with Business Processes
Some of the biggest ERP implementation failures occur due a mismatch between the needs, processes and structure of your organization with the implemented software. This can create significant problems such as loss of productivity and time along with many of the new system’s benefits.
The first step to ERP implementation success is selecting the right system for your business. As easy as this seems, many ERP systems are selected based on emotional decision making, rather than the characteristics and application of the software in daily activities. Poor selection actually makes work tasks and business processes take longer, rather than optimizing efficiency and increasing productivity.
Mistake #4: Underestimating & Inadequately Assigning Resources
Without a complete understanding of the complexity of an ERP implementation, many companies assume that the contracted software provider will supply all the resources required for implementation. However, as you know now from mistakes #1 thru 3, project management, buy-in, education and training are all necessary resources your business must supply to experience a successful implementation.
Many companies will try to save money when they are running over budget on their ERP project by requiring their IT department to work overtime to complete the implementation, with inadequate skills and directives from the contracted software provider. Not only will your IT department reach the burnout threshold, but it will likely tie more knots in your ERP implementation than make any progress. Ultimately this will lead to more delays and money lost.
Mistake #5: Viewing ERP as a Simple IT Project
Assigning your ERP system as a simple IT project can be the most costly mistake one can make. After all the time and resources allocated to this project, you will end up isolating your ERP system in a vacuum. Without proper input company-wide, your ERP system will not be engineered and aligned to work with the business processes and needs of your employees.
To realize the full potential of your ERP system, everyone should be engaged in the transformation. Executives should lead the charge, making the ERP implementation project a broad program and major initiative in every department. This will ensure business process alignment, employee ownership/buy-in and ultimately employee utilization.
Adequate Planning & Employee Ownership
In conclusion, adequate planning and proper support from the executive team to lead change management and employee training can be the difference between a successful implementation and failure. Taking the time to plan and detail the functionality required for your ERP system can eliminate many common mistakes, including selecting the wrong system and misaligning business processes.
Instituting the ERP project as a company-wide program ensures that the proper time and resources will be dedicated to this business transformation and provide the foundation for high employee adoption rates, making your investment worth every penny.