Blog: ERP

Failed Dynamics 365 Implementation? Here’s How to Turn It Around

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December 27, 2023 - by Synoptek

The business benefits of a successful Dynamics 365 implementation are numerous: smarter operations, improved flexibility and agility, enhanced integration, increased revenue, and a stronger market position. However, implementing an ERP is never easy. The process includes evaluating and selecting a competent vendor, building a robust project plan, training users, and offering post-implementation support. When done properly, it helps companies manage their business more efficiently. When not, it results in a failed implementation.

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How Long Does It Take to Implement Dynamics 365?

The timeframe for implementing Microsoft Dynamics 365 varies and depends on multiple factors. These factors include the intricacy of business operations, customization needs, and the organization’s size. In most cases, a simple implementation tailored to small to medium-sized enterprises may span several weeks to a couple of months. This phase typically involves tasks such as migrating data, configuring the system, training users, and conducting testing. Below is an overview of what you can expect.

1. Simple: Quick, ideal for small to medium-sized businesses with basic needs.

  • Timeline: A few weeks to a couple of months.
  • Focus: Basic setup, data migration, user training.

2. Advanced: For businesses with complex processes and customization needs.

  • Timeline: Three to six months.
  • Focus: Configuration, data migration, customization, integrations, and training.

3. Complex: Tailored for large enterprises with intricate operations.

  • Timeline: Over six months, up to a year or more.
  • Focus: System assessment, deep customization, extensive integrations, and ongoing support.

Why do Dynamics 365 Implementations Fail?

Transitioning to a new ERP system costs millions of dollars in investment; yet, many companies do not know how to approach the implementation process correctly, which leads to a failed state. Across many organizations, important processes such as risk assessment, change management, and cost-benefit analysis are typically ignored. Most focus is diverted towards reducing implementation expenditures, hoping that the new system will magically transform the operations and efficiency of the business. Because of this, expected benefits are not realized and the organization loses confidence in the system.

Let’s discuss the signs of a failing ERP implementation and why they fail in the first place:

1. No Clear Objectives or Timeline

Most organizations looking to implement an ERP start on the wrong foot. An ERP implementation is a major business decision that requires considering the type and size of your business and being aware of the benefits it can bring to your organization. Lack of clear goals or objectives and an unrealistic implementation timeline make it difficult to gauge the problems to be targeted and the benefits to be expected.

2. Lack of Implementation Experience

Very often, to quickly take the ERP plunge at a low cost, organizations hire partners that do not have sufficient implementation experience. Inadequate expertise in similar-sized projects, poor communication skills with key personnel, substandard project management skills, and a lack of experience in implementing projects in a similar industry are the most common reasons for a failed implementation.

3. Over-Customization

Because every organization is unique, implementing an out-of-the-box, generic solution might not be a feasible option. Ensuring the ERP system meets unique business requirements typically results in over-customization, significantly inflating costs and deployment time that can derail the implementation.

4. Poor Integration With Existing Systems

Organizations that don’t have a well-developed integration strategy may end up with data silos. It can also lead to an unintegrated post-deployment state that neither enables a seamless flow of data between various LOB and legacy systems nor provides visibility into business operations. Partially integrated application suites and in-house programs built on outdated technology restrict business growth.

5. Insufficient Testing and Training

Even if the implemented ERP meets all the business requirements and expectations, insufficient testing of the system can lead to critical issues being overlooked. Post implementation, these issues snowball into bigger ones that are impossible to rectify. Additionally, organizations that fail to provide in-depth training to all system users end up with the solution not being optimally used, resulting in demotivated and disinterested users.

6. Inadequate Post-implementation Support

Most organizations fail to realize that an ERP implementation is an investment that will be profitable in the long run. Choosing vendors who claim to implement the ERP in a short time frame and at a low cost fails to offer post-implementation support which is critical to the success of the solution.

7. Change Management

Another common reason for ERP implementation failure is the inability to manage change. With any ERP implementation, there are bound to be changes in technology, processes, teams, and user experience. In the absence of a robust change management strategy, changes end up being handled inefficiently resulting in poor ERP implementation results.

5 Steps to Ensure a Successful ERP Implementation

The reasons for ERP failure are many. But a failed ERP implementation does not mean your business cannot recover. While implementing systems like Microsoft Dynamics ERP, organizations should do everything possible to avoid implementation failure. Although budget overshoots, IT delays, and unforeseen roadblocks are inevitable, by following certain tips and best practices, you can successfully re-implement a modern and robust ERP solution like Microsoft Dynamics ERP and achieve the intended goals. Here’s what you can do:

1. Conduct a Diagnostic Study

For you to understand what went wrong in your first implementation attempt, it is important to begin by conducting a diagnostic study. Were your objectives not clear? Was your implementation partner inefficient? Did you overly customize your solution? Was poor integration an issue? Did you not sufficiently test and support the system? Were users trained adequately and satisfactorily? Identify the reason for the failed implementation and set out to build a remediation plan accordingly.

2. Set a Comprehensive Project Plan

To establish a stable ground with renewed confidence, having a comprehensive project plan in place is crucial. Build a robust project plan and carefully identify project leaders with decent time, communication, and management skills. Establish cross-functional teams (who enable specific process improvements and suggest recommendations), and assign project roles and responsibilities to stabilize your ERP. Choose the right implementation strategy, sufficiently plan for infrastructure requirements, and maintain focus on the original scope of the implementation.

3. Go for an Experienced Implementation Partner

Choosing a trustworthy partner with comprehensive experience and expertise in similar implementations is indispensable. The right partner can ensure a smooth transition from the failed state to the new one and can bring the solution back to life. An experienced implementation partner with strong knowledge of all aspects of Microsoft Dynamics ERP and deep domain experience in your industry can quickly study the existing implementation and connect with underlying uses and pain points.

4. Test and Train Thoroughly

Testing the new solution within each module and then together as an integrated solution ensures issues are identified and resolved early in the cycle. Build appropriate test cases, include a wide variety of business scenarios under the test coverage, and ensure comprehensive functional, performance, and user-acceptance testing. In addition, train users thoroughly; including multi-stage and multi-level training with business workshops, train the trainer courses, capacity requirements planning, and user acceptance testing.

5. Focus on Continuous Support

Because re-implementation will take a lot of time, make room for possible technology changes, industry fluctuations, and changing market trends. Develop a long-term plan that includes continuous support to enable users to meet the growing needs of the market and customers. Ensure support staff is sufficiently trained so that they can provide Level 1 support and implement a ticket management system to enable better SLAs.

Achieve What You Set Out For

Microsoft Dynamics ERP is helping organizations achieve enhanced productivity, seamless integration, anytime, anywhere accessibility, built-in intelligence, and superior automation. However, proper implementation is essential to get the most out of your investment and effort.

A failed ERP implementation is a worst-case scenario, but if you find yourself in a failed state, a proper re-implementation can help you achieve your original goals. Carefully diagnose your implementation and set a comprehensive project plan. Engage with an experienced implementation partner, test, and train thoroughly, and focus on continuous support – there’s always a way to turn around a failed ERP implementation!

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