The implementation of an ERP is one of the major decisions in the lifecycle of an organisation. According to Gartner, approximately 75% of all ERP projects fail. 61.1% ERP implementation take longer than expected as per Panorama ERP study. And more than 74.1% implementations exceed budget. There is also an overwhelming percent of companies who don’t end up getting what was promised to them. For an organisation spending millions of dollar and almost two years in implementation of ERP, it’s vital to take care that sufficient measures are taken to ensure success of the project.A few mishaps along the process can ruin your ERP implementation. The following study analyzes the common failures to help you take action proactively & save your investments from an ERP failure.
The love for legacy system
Most companies have a historical IT system that has been used in the past. The users are inclined to continue with the same systems. They are very much used to the old systems, which are completely outdated. The organisations continue to use outdated systems fearing that they will find the ERP difficult to use and may require IT skills and knowledge.
The user resistance in adoption of new technology can be a bottleneck for the company. The organisations face a stiff resistance, especially from top executives when it comes to technology. ERP system introduces lot of automations and work flow refinements which can help users perform better.
Big brands Poor Products
A lot of big names in the industry are now delivering products, which are simply not up to date with what is required in the market. The old and legacy ERPs from the leading vendors are not in tune with the changing times. The implementation cycles are long and tedious. It is also not able to meet the user needs and requirements.
Most of the companies are experiencing hard times when it comes to the implementation of ERP system. Most of the employees are overwhelmed with the process. The organisations involve consultants. These consultants often lack real practical know how of the business. They suggest generic best practices and recommend well known vendors for ERP. Eventually the key business processes are missed in the process leading to implementations which don’t meet the needs.
Complex and Lack Flexibility
Any ERP implementation today should take care of dynamic and ever changing business needs. The technology is disrupting the world at a very fast pace, so tools which are slow, complex and lack flexibility add bottlenecks for business. An ERP that is fast and dynamic to handle shifting priorities, markets and enable ROI for the organisation is the right investment.
Customization of ERP
The existing products in the market are unable to meet the needs of the business. The products require extensive customizations and business process optimizations before it can be effectively used by companies. The implementation committee must oversee the gaps in advance to control what is being developed for their organisation. An ERP which cannot be translated according to the needs of the organisation doesn’t serve the purpose.
The top management and the implementation committee should work hand in hand in drafting the requirements from the ERP. The prioritization, key objectives and detailed requirements should be drafted clearly. Most of the ERP projects fail due to poor requirements. Once the project requirements are clear, the vendors can then be involved in the effort estimation & implementation exercise of the ERP.
Poor time management and planning
An ERP requires a clear roadmap from the outset. The requirements, objectives and planning for implementation is the key to effective results. ERP is not ready made software, but more of a collaborative process where key stakeholders should be involved from the vendor as well as the organisation. The key performance indicators should be benchmarked and timelines for implementation should be discussed to achieve the objectives of ERP.
Lack of participation from the management
The top management & key personnel should take the initiative and drive the ERP implementation. Lack of participation and interest from senior executives is one of the top reasons ERP projects fail. Irrespective of the size of an organisation, the management should be actively involved in deciding the guidelines and objectives for ERP implementation. ERP is not technology; it is an enabling tool for business.
One of the most crucial aspects of implementing an ERP is the selection of the vendor. Do a thorough research before finalizing the vendor. The legacy ERP providers are facing stiff challenges due to evolution of technology. You may choose on demand ERP providers who are nimble and can provide you tailor made softwares, within time and with latest technological features to meet your business needs.
The ERP implementation is a major investment for any organisation. A good ERP implementation will ensure that the organisation is able to streamline its business processes for efficiency and top results. It eliminates complexity, simplifies things and helps an organisation to deal with ever changing dynamics. The executives also get to see the realtime performance of their business with key performance indicators in realtime. A good ERP implementation is a great investment for business longevity and success.