Implementing an ERP (Enterprise Resource Planning) system for your business can seem like a daunting task. In fact, statistics gathered from CIO magazine indicate that over 20% of ERP implementations fail for one reason or another. If you’re considering a new ERP implementation, be sure to avoid these five critical items to mitigate risks to your project.
1. Inadequate Planning
System selection and proper requirements planning are key areas that may seem obvious but can be grossly underestimated. With so many choices and a myriad of departments, technologies and processes to account for, many projects can be doomed from the beginning. To get started, take a hard look at the desired outcome based on your “current state”. Consider what and who is available for the project, and how large groups and teams will work together. Set a realistic timeline and budget based on your resources and organizational demands.
2. Miscalculated Expectations
Don’t rely on a snazzy ERP demo to make your system and partner team selection. Many companies find out the hard way that adequate due diligence upfront can make or break a rollout. Talk to an ERP integrators’ clients and be sure they have the know-how to get the job done. The complexities that arise from the implementation will require an experienced project team who can navigate a broad scope and identify issues early.
3. Over Customization
ERP implementation mistakes often take place in the category of overdoing customization of the ERP systems themselves. While customizations are typically necessary to some degree, too many can be costly, and introduce scope risks that jeopardize the project. Try to customize the solutions to fit your company, while making some of the changes to internal processes that better fit the system. This approach can improve the flow of your business without the added cost of over customizing the solution.
4. Poor Organization Change Management Policy
Strong change management and ERP implementations cannot be separated. Communicate the expectations to the organization early and often. Assume the ERP will disrupt the status quo, and plan accordingly. The level of discipline required to deploy an ERP is rigorous and will require a plan to compete with the daily organizational whirlwind that companies face. Also, develop an execution plan that can provide important indicators of success, while involving employees in every stage. If employees can clearly understand objectives and how they participate in the success, the easier employee adoption of the ERP can become.
5. “Big Bang” Rollout
Remember in the ERP implementation world, doing things in phases is key. Too much, too soon (i.e. “Big Bang”) rollouts can result in countless issues that can derail an otherwise solid plan. Even if things seem to be going smoothly, keep an objective eye on your phases and plan accordingly. The organization needs time to adapt to new systems and processes, so carefully select your department and module lineup that will evolve your system over time. The organization will need time to react to each iteration, so allow for that in your plan.
ERP Systems have a major positive organizational impact to every aspect of the business, but implementations are hard. They demand attention from the very early stages, and throughout the first years of deployment. Using some of the information provided here, it’s possible to mitigate a few major risks that have plagued many organizations who have gone through the process before you.