The decision to upgrade from legacy systems to an ERP is never an easy one. On the plus side there is little doubt about the obvious business benefits that will accrue from an ERP solution. But on the negative side is the cost, time and money involved in making the move. Add to that the stories of botched ERP implementations.
All these factors make it easy to understand why many businesses are caught in a decision paralysis on whether to take the big step and go for an ERP solution.
However, it is also relatively easy to avoid most of the pitfalls, provided you avoid these common implementation errors.
- Planning: Poor or lack of planning is the number one reason for ERP implementation errors or subsequent failures. The scope, size, complexity and change required for a successful ERP implementation requires that the change be led from the top. The top management needs to get involved in every aspect of the planning process, as this will ensure complete buy-in from the rest of the team as well. A well-planned ERP implementation is half the job done.
- Inadequate Research: Believe the vendor’s marketing team, but do your own research as well. If necessary, hire an independent ERP consultant to help with the research. Make sure you check and double check the vendors’ credentials. Ask the right questions. Ask for references. Verify the references. Make sure you are completely satisfied with your vendors’ ability to deliver.
- Align with Business Processes: Some of the biggest implementation failures occur due a mismatch between the needs, processes and structure of the organization with the implemented software. This can create significant problems such as loss of productivity and time. The first step to ERP implementation success is selecting the right system for the business. As easy as this seems, many ERP systems are selected based on emotional decision making, rather than the characteristics and application of the software in daily business processes.
- Collaborate: An ERP implementation impacts every aspect of the business. It is a good idea to get the team’s buy-in at the planning stage itself. It is critical to get them to understand how it will help them function more efficiently. The project implementation team should have members from different departments. This will ensure that inputs from diverse functions are included in the product features and also ensure buy-in from other members of the department when the solution is eventually rolled out.
- Implementation Time: ERPs are a significant investment and can have a lifespan of 5 to 15 years or longer. To address inefficiencies within an organization, the estimates about implementation time should be realistic. Part of a realistic implementation plan is including more tasks than just software installation and testing. In addition to allowing time to test and fix bugs, other elements should include:
a. Data migration. If an ERP implementation merely moves bad data from one system to another, there will be no substantive improvement.
b. Pilot programs. Running a pilot program with the key stakeholders not only tests the product in real time, it also achieves greater organizational buy-in.
c. Testing. Beyond testing for bugs, true testing should involve pilot programs and also a gradual roll-out throughout the implementation process.
- Training: Training has to go beyond getting users to start using the system as quickly as possible. This merely covers how to get into the system, perform a few keystrokes and manipulate data. Comprehensive training is situational or role specific. ERP solutions have a number of features, many which cannot be fully grasped during the initial training. Training needs to be continuous.
- Phase out Legacy Systems: Some companies fail to phase out legacy systems that have been replaced by the ERP solution. This tempts the employees to go back to the older systems as they are more familiar with them. To prevent this from happening, it is best to phase out the legacy systems completely.
- ERP implementation is NOT just an IT Project: Treating an ERP implementation as an IT project will be a big mistake. The ERP solution is going to impact every aspect of the Enterprise. Therefore it stands to reason that every department and every individual with access to the system has visibility of the implementation. Without proper inputs, the ERP system will not be engineered and aligned to work with the business processes and needs of all the employees.
- Accurate data: An ERP system is only as good as the data that is in it. So, for the ERP implementation to succeed, it is important that procedural parameters are put in place right from the start to minimize data errors.
- Maintenance strategy: The vendor must perform regular preventive maintenance to ensure the ERP solution is current from a technical and business perspective. Regular maintenance also ensures that the Organization stays up to date on regulatory compliance.
So there are plenty of ERP implementation horror stories if you look for them. But yours need not be one of them. Following a common sense approach to ERP implementation could ensure you have a system that propels your business forward.
Click here to find out how EPPS can help you with a smooth ERP implementation.