We’ve all heard horror stories when it comes to implementing a new ERP system. There have been countless examples of companies incurring catastrophic costs, failing to meet their objectives, losing visibility into their key business processes, and much more. However, with the right planning, change management, and support, the risk of an ERP implementation can be minimized and the advantages of the new system can be fully realized. In this blog post, we’ll share some common roadblocks in the ERP implementation journey and how one can navigate through them. Following these guidelines and keeping these tips in mind will set your organization up for a successful ERP implementation.
Top Causes of an ERP Implementation Failure
1. Lack of Internal Buy-in
Change, especially a massive shift such as an ERP implementation, is difficult. This is why decision-makers must communicate why the change is necessary. Team members may be facing challenges already with the existing software, especially if the company has outgrown it. Therefore, some may be pushing for the next step to enable future business growth. However, to get everyone on board, you must outline the reasons for change, explain the future goals you have for the company, and set clear expectations on the investments required and the involvement needed from project members.
2. Lack of Commitment and Support From Project Sponsor and Leadership
For a smooth ERP implementation and fewer hurdles down the road, it is necessary that leadership is not only properly assigned but is also willing to devote adequate time and energy to the project. Proper delineation of roles and responsibilities is also helpful for the implementation team to assign action items. Presenting the purpose and expected benefits of the project to leadership will facilitate an easier implementation journey, because they will work with you to remove any barriers to success.
3. Poor Timing & Misaligned Prioritization of Initiatives
A large difficulty is balancing deliverables for your ERP implementation with day-to-day business operations. While this challenge cannot be completely eliminated, it can be minimized by choosing a period of low demand and allotting sufficient time to see the project through. For example, Hershey’s attempted an SAP ERP implementation, timing its cutover during peak Halloween candy season. This, compounded by trying to squeeze a complex ERP implementation in an extremely short timeline, led to a colossal loss. Therefore, while not everything can be anticipated, it is in everyone’s best interest to purposefully time an ERP implementation. Along the same lines, it is important to clearly define priorities. When there are multiple projects going on simultaneously and business gets busy, try to define where the ERP implementation fits in the organization’s list of priorities. It should fall higher to the top, but if this shifts, it should be communicated.
4. Weakly Developed Project Structure
As mentioned above, clarity around structure, tasks, and roles and responsibilities is necessary for project execution. Without these defined, inefficiencies increase as team members repeat efforts or leave key action items unfinished. To combat this, project managers and the implementation team typically hold kickoff meetings to set and align expectations. Furthermore, it is a good idea to develop a risk management and escalation process, in the event of issues that may arise throughout the project. It’s important to regularly revisit roles and hold those accountable for deliverables, keeping tabs on any roles that may shift or evolve over time. Having a developed structure for the project with transparency and accountability sets you up for success.
5. Poor Internal Communication and Support
It is much easier to be on board with change when key influencers in your organization are in-the-know and are engaged. By holding regular meetings to keep key influences informed on the project, the end users will be more likely to welcome the change rather than be resistant to it. It is also important to empower these end users to take ownership and have a vested interest in the success of the project.
6. Lack of Effective Training Program
To utilize an ERP system to its fullest potential, it is important to establish a training program that first assesses current skills and then works to address gaps in knowledge. Once the new ERP system is up and running, a large part of continued success is dependent on how quickly employees can get accustomed to the new environment. Ensure that critical roles receive the training they need prior to go-live and that the training is geared towards their unique needs.
7. Weak or Absent Post Go-live Support
End-user training does not stop after the go-live date. Oftentimes, more training is needed for users to feel comfortable and confident using the new software solution. To help members with the learning curve of shifting to a new ERP, strong post go-live support is necessary. At this point, it is beneficial to schedule regular meetings between the project management team and the implementation team so that issues can be addressed, questions can be answered, and processes can be optimized.
8. Misuse or Non-utilization of the New ERP system
A frequent barrier to reaping the benefits of a new ERP system is end users that are misusing or not utilizing the new system at all. To avoid the discomfort that comes with change, it can be effective to offer positive reinforcements whenever employees achieve a result, or a “win,” with the new solution. These can be simple rewards or recognition. Additionally, to encourage members to utilize the new system, the old system should be decommissioned as soon as possible (often available as a view-only access). If the legacy system is still available, employees may fall back on it, instead of using the new ERP. Lastly, keep on reiterating the benefits of the new system and how devoting the time and effort into engaging with it will pay off down the road.
9. Unintended Consequences Undermining Success
Despite all of the analysis and planning, every major project will come with unintended impacts. The first way to mitigate these is to explain the nature of ERP implementations to your organization, especially the fact that issues will inevitably arise. With that said, reassure employees that the project team is ready to handle these challenges. Along the same thread, clear communication is required between the end users and the project management team, so that any discrepancies can be voiced and solutions can be found in a timely manner. Having a streamlined way for end users to submit feedback and for the project team to address it paves the way for a successful ERP journey.
Sources:
https://www.thirdstage-consulting.com/the-biggest-erp-failures-of-all-time/
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Whether you need a partner to guide you through a successful ERP implementation, or need a team to get you back on track, let us know how we can help. Through Paapri’s ERP Evaluation services and expert consulting, we can offer an ERP solution that best fits your long-term process needs. If you need help utilizing your existing ERP system or customizing it for your business, Paapri’s ERP Support has you covered. Talk to a Solutions Consultant today on how we can set you on the path to success.