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Home / Insights / Blog / The Definitive Process to Avoid a Failed ERP Implementation
January 2, 2020 - by Manoj Nair
Keeping up with the pace of digital transformation requires you to embrace tools and technologies that can simplify and modernize your operations. Implementing an ERP solution is a great way to make your processes smarter, improve flexibility and agility, enhance integration and collaboration and drive better profits. However, given how complex modern ERP systems are, knowing how to make the most of the various capabilities is not easy. Add to it the complexity of evaluating and selecting a vendor, building a robust project plan, creating an implementation team, training users, and carrying out post implementation support.
Without the right support, successful ERP implementation is nearly impossible. ERP implementation involves more than simply installing software and configuring systems, it requires training your technology users as well as ensuring the proper security measures have outcomes. This is why we’ve compiled a definitive guide to avoid failed ERP implementation.
Despite all the benefits of an ERP system, a majority of organizations take longer than expected to implement their ERP systems that results in substantial time and budget overruns. Unrealistic timelines, poor communication, and poor governance are all common causes of ERP implementation failure. Investing heavily in an ERP only to see it fail is not the best business endeavor. Let’s look at some of the top reasons why ERP implementations fail:
A poorly planned ERP implementation is one of the biggest reasons for failure. In the absence of initial business process assessment, organizations fail to understand the needs of the business, as well as the complexity of the technology stack. Without proper assessment, they end up choosing a product that just doesn’t fit their needs while spending way too much time in chalking out a detailed strategic plan.
ERP implementations are complex and require sufficient time (and patience) to deliver value. Having unrealistic timelines can put a lot on pressure on the implementation team, resulting in issues that take longer to resolve. With teams speeding through the implementation, challenges and bottlenecks often get overlooked – resulting in the system not operating as planned.
Most organizations looking to implement an ERP solution base their decision on budget; they choose a product that fits into their budget, without considering aspects such as complexity of business processes and size of the company. By choosing a choosing a product that does not cater to their vertical, is too simple (or complex) for their business process, the end result is heavy customization – which delays the implementation and greatly impacts adoption problem.
Communication is key to the success of ERP implementation: between team members, managers, vendors, users as well as stakeholders. A constructive communication plan ensures everyone in the implementation team is aware of his/her responsibilities while minimizing the chances of project derailment.
ERP implementations also often fail in absence of a strong governance model. Having properly-defined controls in place will ensure that customization requirements, scope expansions, and other risks don’t lead to decisions that can cause your project to derail.
Challenges and risks in the ERP implementation are normal; but if organizations do not have the right practices in place to manage these risks, the end result is a failed implementation. In addition to having a robust implementation strategy, make sure to have a proper risk management process in place to address infrastructure delays, data migration, customization efforts, integration bottlenecks and any other disruptions that can extend the cost/timeline.
Every organization is unique and requires an ERP system that is tailored to their needs. This usually leads to extreme customization of the ERP system that not only makes the implementation complex, but also costly and time-consuming. A highly-customized solution presents several implementation challenges and also makes it difficult for users to drive value from the system.
Any ERP implementation is a massive undertaking that can take your business to newer heights or send you down to the gallows. Often times, ERP implementations fail because organizations do not do enough research on choosing the right ERP implementation partner. Having a partner with poor experience or expertise of similar implementations in your industry is sure to bring your ERP efforts down.
Ensuring business productivity, efficiency, and effectiveness through an ERP solution is probably the most important task for any organization. That’s why, you need to have a robust ERP implementation process in place to ensure the implementation goes off smoothly – without any major hiccup or business disruption. Here’s what comprises a standard ERP implementation process:
The stepping stone of any ERP implementation is scope or requirements definition. Start your implementation process by creating a high-level requirements document that outlines the scope across the business. Also, make sure to prioritize each requirement and establish must-have functionality versus nice-to-have functionality.
There are countless ERP solutions in the market today and countless vendors who promise to take your business from zero to hero. But not every solution/vendor is right for you. It is important you make the right choice – based on your requirements, your business, and the capabilities of the system/vendor. Look for a solution that is modern and offers capabilities that are required in the digital era. Look for a vendor with relevant industry experience, flexible pricing/implementation models, expert resources and more.
Having a flexible and pragmatic project plan in place is the only way you can achieve success with your ERP implementation. A project plan enables you to create a timeline, establish milestones/deliverables and assess and track your project progress. It gives you the visibility you need into your implementation activities while aiding you in overcome challenges as they come.
Clear communication of the need for an ERP implementation, the benefits the system will bring, and the roles and responsibilities of those involved is also important to ensure the solution is well-received. Make sure the implementation team addresses apprehensions and resistance in time and ensures support of all those involved.
This phase requires you to have all the requisites in place for successful deployment. In the age of the cloud, most solutions are deployed in virtual infrastructures, eliminating the need to invest in on-premises data centers and removing the overhead costs of maintaining internal network and hardware. A modern cloud solution not only reduces the impact of unplanned outages but also provides real-time support as and when needed.
The ERP implementation process doesn’t end at deploying the solution. Successful implementation requires you to also train users to use the system and make the most of its features and capabilities. Make sure to provide proper documentation, classroom as well as hands-on training to every user in the organization and clear all their queries to ensure widespread adoption.
Providing post-implementation support is also a vital aspect of the implementation process. Make sure to monitor the new system; evaluate how it is functioning, how it is integrating with other systems in the organization and how users are using the system. Quickly address challenges to ensure you achieve maximum return on your ERP investment.
If you are looking to embark on the digital transformation journey, having an ERP in place is probably a great place to start. However, implementing an ERP is no cakewalk. Given how easily ERP implementations fail and given the repercussions of a failed implementation, it is important you establish the right processes to ensure your project is working as designed and gives the results you expect. Affiliating with an ERP implementation partner can give you the capabilities you need to successfully implement an ERP solution while allowing you to focus on your business objectives – without worrying about implementation challenges, timelines, resources or training.
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