The importance of implementing Enterprise Resource Planning (ERP) Software is well-known in the industrial world. However, most businesses fail to consider important points when successfully implementing an ERP system. In fact, Gartner notes that up to 75 per cent of ERP projects fail to meet their objectives due to this. A report by Deloitte further notes that 75 per cent of companies in the industry face ERP implementation failures. As a result, not only will it defeat the purpose of implementing an ERP system, but it could also worsen it if not implemented properly. The reasons for ERP implementation failure can be wide-ranging and can be the fault of the business, vendor or both. This includes poor planning, a lack of understanding of the implementation process, a lack of support by the management or leadership, inadequate testing, and inefficient master data management. This article will explain how companies can avoid ERP implementation failures or delays.
Six Tips To Avoid ERP Implementation Failures or Delays
Where an ERP is implemented inadequately, it results in significant project delays, waste of finances and produces waste. ERP implementation is a complex process requiring an expert level of understanding in incorporating it into business processes. Here are six best practices to implement so as to avoid the risk of ERP implementation failures or delays.
Customise, But Do Not Overdo It
One key feature companies often look for when finding the right ERP solution is whether it can be customised. While this is an important feature that allows companies to implement an ERP system most relevant to their business processes, companies are advised not to over-customise. This is because, unlike the older version of ERP software solutions, modern ERPs are far more standardised, suiting various applications. While companies may yet customise it to their needs, note that the more a business does it, the more customised coding needs to be inserted, which must be tested. Unique, customised solutions will not only make ERP a more costly investment, but since it is a feature not yet tested, there is a certain risk in adopting it. Moreover, certain customisations can be highly complicated, hindering software updates. Companies that over-customise may also have to spend an enormous amount of time when they require help. While any problem with a standardised ERP system with a few customisations can be fixed in a few hours, over-customised software may be more challenging.
Test It At Every Stage
It cannot be emphasised how complicated ERP implementation is, as that is one of the key reasons why organisations worldwide are facing failure rates at an increased rate. The best way to avoid it is to test the solution and ensure its quality remains consistent constantly. Identifying other ways the ERP solution can be improved is a good way to improve the efficiency of the software. By rigorously testing your solution, you can monitor the quality of the application and identify areas of improvement. By constantly testing it at every stage, companies can also note the progress of their company in terms of how the ERP solution is improving functionality, critical processes, and overall performance, all of which increases the odds of avoiding an ERP failure.
Provide Adequate Training to All Employees
The complexity of an ERP system, especially in its implementation phase, heightens the importance of educating your employees and providing the necessary training to know how to use the system. When employees comprehensively understand how to use the software solution, it also helps them to improve their business productivity. Moreover, since employees will not have to waste time “trying to figure it out”, they can finish their tasks more easily and much faster with the necessary training. Additionally, since employees will be told how to complete a specific task with the ERP system, it ensures that everyone will follow the same practices. As a result, the chances of risks occurring due to human error are minimised. A good ERP vendor generally offers training services, ensuring expert and professional training.
Make Sure That You Have Enough Finances
ERP solutions are often more than just a one-stop investment. It requires considerable knowledge, resources and finances to ensure it is implemented properly. Hence, companies are generally advised to have more than 25 per of their budget in implementing an ERP solution. Costs for testing, breakdowns, upgrades, infrastructure, maintenance and others should be reserved in case. While most companies will have a set time frame in mind, there should be space in the project plan to change this. A good way to understand how finances can be budgeted is by reaching out to an expert consultant. A good vendor may offer a consultation service, allowing potential businesses to communicate with a team of experts to identify the benefits they expect from an ERP solution and the best way to implement it to address such goals.
Insufficient Data Cleansing
For ERP systems to function properly, the data should be formatted correctly or in other words “cleaned”. Hence, system building and data cleansing are important aspects of ensuring ERP implementation is successful. Data cleaning refers to the removal of files that are no longer valuable or beneficial to your business. If not, the system will consider old data as part of the relevant data that is applicable to the company, thereby producing insights that are not accurate nor helpful. Since, decision makers however, often rely on ERP systems, by reading through the detailed reports produced, the chances of making the wrong decisions also become higher. System building and data cleansing are carried out simultaneously, requiring data to be separated as static and dynamic, which must be uploaded into the ERP system.
Communication is Key
As a team, it is important that the entire organisation communicates and find out what their core requirements or expectations are from an ERP solution. To do this, the team needs to organise and have its project details in order to assess potential risks that could occur. If this cannot be properly assessed talking to a professional is beneficial. They can assess the risk the project holds in different points of view. Forming a risk mitigation plan that would help with ERP implementation ensures that there are no failures. In other words, having a detailed plan before implementing the ERP is a great way to avoid implementation failures or delays.
Do Not Let A Hefty Investment Go To Waste
SMEs and large corporations both invest in ERP systems and also suffer from ERP implementation failures due to various reasons. Whether it is a problem with the leadership or management, or it is a technical issue, they all can be prevented if significant attention is put into organising and planning out the project. Think about what you and your team wants, whether you have the necessary resources and finances, and whether attention is put to the data integrated into the system. Take charge and experience the rewards of an ERP system!
