Screen Shot 2016-02-18 at 2.05.07 PMImplementing ERP has a number of advantages for a company: streamlined processes, increased efficiency, and elimination of data errors and data redundancy. Yet, not every ERP implementation can be seen as successful and many do not fulfill their full potential.  If ERP is supposed to transform the business, then the business must be understood before the implementation. Too many times implementers of ERP assume what worked in one situation will work is all situations. A better viewpoint is determining how to obtain the greatest ROI for the current business environment without prejudice of past or theoretical knowledge.

1. Underestimating Time and Cost of Implementation

The result of poor planning, implementers can easily underestimate the resources required for implementing ERP, thus extending schedules and budgets needlessly. Many ERP implementations focus solely on installation of the ERP software and functional testing when much more must be considered.  If bad data already exists, simple migration into ERP makes no significant improvement if no effort is made to correct: the bad data is being accessed from another tool.  Organizational resistance is always a critical concern which is often ignored. ERP sales representatives understandably believe their ERP solution is the best thing possible, but that does not mean every consumer agrees. Proper change management is required to obtain sufficient buy-in among the stakeholders; not only for the ERP implementation but each individual phase of implementation.  Organizational resistance can be managed through pilot programs which also contribute valuable information for testing and decision making of particular features.

2. Lack of Company Engagement

Leadership must clarify desired change, enforce objectives and provide incentives for implementing ERP.  Buy-in should be established for all levels of the organization, not just the executive level. If people are unclear about what and why they are implementing ERP, they become resistant to the change.  System complexity, lack of training and not obtaining employee input are all symptoms of losing company engagement for ERP implementation.

3. Inadequate Focus on Compliance

ERP solutions have a rich set of features to ensure compliance to numerous standards, regulations and best practices the company is currently or expecting to adhere to as part of standard operating procedures. Implementation must consider what compliance issues a company is currently facing, particularly in the area of finance.  Determine how ERP will assist in audits and leverage those features.  Ensure appropriate departments understand how ERP works in relation to accounting, distribution, inventory and billing.  Identify what controls and configurations are pertinent to comply with governmental tax requirements.

4. Too Much Customization

The best path is not always the most direct route taken. Many ERP implementations fall short of meeting customer requirements because requirements are not properly understood in the beginning and the implementation team tries to customize the solution heavily for the customer.  Oftentimes this raises the cost of the implementation and impacts the schedule while drastically impacting the core functions of the original solution.  Selecting the right ERP solution is the best solution and requires significant research at the start; but the other consideration is tweaking the business process, not the ERP solution, to meet the desired outcome.

5. Lack of Quality Data

The issue of bad data goes beyond the actual data and reaches the underlying decisions made by executives on what data is important for the business.  If the company focuses on financial benefits, they may not have sufficient performance data to address their concerns properly.  ERP solutions often shed light on those areas of the business and databases which have been poorly maintained or ignored. Establish a series of regular internal audits to check information accuracy in material procurement, production planning, inventory management and billing.

6. Inadequate Workforce Training

Training will typically focus on getting users to start using the system as quickly as possible. This type of education covers how to get into the system, perform a few keystrokes and manipulate the data. Rarely is the training situational or role specific, nor is it ongoing.  ERP solutions have a number of rich features, many which are not fully understood during the initial training or properly applied when out of training.  Training needs to be as robust as the solution and continue for each person active within the system.

7. Poorly Crafted Implementation Teams

ERP implementations, as an enterprise solution, have the potential to impact every division in the business but in many cases, not every division is represented in the implementation team as an active participant or stakeholder. This creates resistance. Resistance also exists in assigned team members or stakeholders who are not fully committed to the ERP solution, but are going along because they are told it’s what the company wants.  Buy-in is critical for ERP solutions, at every level of the organization and across every division.  If a person is impacted even in the smallest way, ensure they understand and accept the benefits and risks.

8. Continued Use of Legacy Systems

Companies will use ERP to replace legacy systems, but they fail to phase those systems out after ERP is implemented. People have a tendency to return to older habits and if the legacy system still exists and is operational, the natural result is ERP has not replaced anything. ERP is an opportunity for process improvement. If treated as just a software install, most companies will miss the opportunity to revisit processes and cut waste and inefficiencies. There is no reason to automate a process which is not required or does little to meet business objectives.

9. Lack of Maintenance

Implementation planning must extend to maintaining and improving ERP after implementation.  A defined maintenance strategy will ensure all stakeholders understand what must be done on a regular basis and who has the responsibility for completion. As an enterprise tool, this does not, and should not, always fall onto the IT department.

10. Inadequate Active Load Testing

The durability of an enterprise solution cannot be properly tested by a small set of users. This requires active load testing based on real-world projections and simulations. Anything less will result in unnecessary downtime and greater resistance to change. Changes to the solution should be tested in similar fashion to determine impact and potential unknown issues. Simply providing the promised functionality does not guarantee adoption: much more needs to be considered during implementation.

 

Questions? Contact Us.

One of our experienced ERP consultants will contact you to answer any questions that you might have.

 

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